Costs - but also revenues
The costs of high-speed broadband connections are substantial and therefore clearly require attention. On the other hand, let us not forget about the revenue side of high-speed connections. Traditional thinking is that the network operators installing the connections should also be able to recover their costs by selling their services to consumers. In practice, this leads to operator revenues dominated by triple play services (TV, fast Internet and good old telephony). But high-speed broadband has much more value to offer to society than just triple play! Think of all the useful and necessary applications in health, education, security, etc. Other sectors can provide additional revenue and even share some of the costs of broadband. If this is to work, both network operators and the other stakeholders need to seriously take into account the requirements of other sectors, as it is not obvious that the crucial services from other sectors can be properly served by best-effort internet (even if it is high-speed). There will be other important requirements, for example for quality and reliability of the connections. But, if network operators take these requirements into account, they can widen the business case for broadband, to their own benefit and to the benefit of society as a whole. Thus, “my business case transforms into our (trans-sector) value case’. It is not surprising that this type of trans-sector innovation is studied and developed further in research initiatives like TRANS (http://www.trans-research.nl/).
In the Netherlands we see the interesting example of the Reggefiber fiber roll-out in the city of Amersfoort. In parallel to the standard high-speed connectivity for triple play, Reggefiber has introduced other, guaranteed quality connections aimed at health, education and other services that are created and consumed locally (http://www.slideshare.net/panooren/broadband-is-more-than-just-bandwidth). Since many of these services are local in nature anyway, it turns out that bottom-up initiatives driven by local communities (varying from schools to churches) are the best way to promote these services, and the high-speed connections that they need. Local roll-out, local services, local communities – a very natural fit…
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Comments
That is a very good post
That is a very good post Pieter, and an essential point of new Altnets, working on the fat pipe theory. Give people the pipes, and let them choose what they bring down them. Its working on an abundance model, which can only be to the benefit of the network operators and the end users. It will also bring enormous benefit to the countries who grasp it now instead of using patch up technology and having to do the job again to try to catch up with the rest of the world. Thanks for the links, the slideshare showed it well.
What is the cost to the
What is the cost to the country if we don't build the infrastructure we need? I can understand that rural areas don't give the telcos the returns they expect to keep high earners and shareholders happy, but its the people, businesses and government who will see the ROI. Has anyone got the figures for the savings that could be made with eGov and cutting out all the paperwork and phone calls? There must be someone on this forum good at stats?
http://blandinonbroadband.org
http://blandinonbroadband.org/2012/06/03/communities-need-to-get-creativ...
A case can be made for a
A case can be made for a horizontal approach where each layer scales across physical and market boundaries satisfying the marginal user. The problem with vertically integrated monopolies is that a) the layers don't scale overtime retarding rapid deployment, scaling, and efficiencies; and b) pricing reflects average usage and consumption, not marginal. Hence everyone is stuffed into a one size fits all, or 20 flavors of vanilla, consumption model. The current vertical model does not handle rapid technological change (supply) nor infinite bifurcation of demand.
It's a very good post, but
It's a very good post, but the problem for Latvia is that non local communities, non government doesn't have money for participating in such projects, but also (and it's more painful) they don't have understanding why do they need invest money in fibers. They are not willing to accept yet that high-speed broadband has much more value to offer to society than just triple play, offered by ISP. And if they do- well, then goes argumentation of money problem.
In the furtherance of Nooren
In the furtherance of Nooren's comment, I agree that the deployment of high-speed networks should be considered as a matter of modernisation, not just a market-based matter. if a market based approach had to be chosen for railways and motorways at the beginning, no infrastructure would haveve been build. The same for high-speed networks: we can't assess their values on the basis of revenue which are currently predictable, or on the basis of current consumers demand. We need such infrastructures, that's all, it is a matter of modernisation
Too right! well said. The
Too right! well said. The cost is what it will cost a country if they DON'T invest now...
http://news.cnet.com/8301
http://news.cnet.com/8301-1009_3-57449640-83/european-telcoms-defend-lea... Could this be true?
I think it is what is going
I think it is what is going to happen if we are all tied to the legacy networks designed for phones. It is already happening in the UK to some degree, the FUP has very low data transfer limits, and if people don't want throttling or capping they have to move on to much higher tarifs - whereas if they had fibre connections this wouldn't be a problem.
Replacing the copper local
Replacing the copper local loop will not change the already fibre backhaul networks.
Thus if the majority of the public are paying around the same price as now, and firms have spent money on the new fibre local loop. Usage allowances, traffic management and fair use policies will remain.
It is these backhaul costs that mean a 1:1 contention business service is a lot more than a consumer service, even if both are using the copper local loop.
Please explain why fibre
Please explain why fibre removes any limits. It's important to ensure anything quoted here is backed up with facts and explanations.
http://techcrunch.com/2012/06
http://techcrunch.com/2012/06/09/the-re-imagination-of-everything-im-pis...
"addressable market of over $36 trillion" says KPCB analyst Mary Meeker
This is the future. It just isn't here yet.
I'm always amazed at how
I'm always amazed at how public policymakers neglect the economic benefits that high-speed connections offer. Perhaps this is because they're harder to model or predict than the benefits of traditional infrastructure (rail, airports, roads). But just because they're harder to model doesn't mean they're smaller - on the contrary, the economic possibilities of much higher speed connectivity are vast.
Or maybe it's because there aren't enough businesses to lobby for it. I was recently at a meeting where a CEO argued that a new runway at LHR would help his business. I'm sure he was telling the truth as far as his company was concerned. But we didn't hear from the CEO of the company whose business relied on superfast broadband - because this company doesn't exist yet.
As a wise man once said, in Washington (and Brussels?), the future has no lobbyists.
I think we are finding there
I think we are finding there are quite a few lobbyists on here for a future that is digital! Welcome to the club...
This is not a digital
This is not a digital revolution, this is a bitstream revolution.
Modernization for Europe now!
Modernization for Europe now!
Everyone agrees on the importance of modernization for Europe. It’s our future. And I feel the need to remind this post that it is already happening today! The cable industry is spending heavily on its networks to continually boost performance.
Modernization costs money. Money is in short demand these days so let’s spend it wisely.
The good news is that there IS a business case for modernization. Look at cable’s networks – the industry I work in – where we are putting 20-25% of revenues back into the networks each year to stay ahead of consumer demand. Our technology is 100% about evolution. The performance on our networks has to evolve or we lose customers. It’s as simple as that.
We know that cable is not everywhere. It’s in the more populated areas of Europe. But Europe is fortunate to have a good mix of technologies working on the Digital Agenda in areas where we do not reach. 2020 is in a long, long time in technology terms. Who knows what other technologies will develop in the meantime?
But whatever happens, it would only seem logical and fair that we get rural citizens connected. The cities will look after themselves, from the market perspective. We’ll be there competing with the telco incumbents, and I can assure you that when we upgrade, they respond.
Public policy discussions really need to focus more tightly on rural areas. To do otherwise is to further a rural/urban divide. Funny how there is always a social element to things.
Agree Caroline, the focus has
Agree Caroline, the focus has to be on rural. Market forces can cope in the cities, well done for spurring them on!
You still have to persuade
You still have to persuade the people to sign up and pay for higher speed connections. In the UK over 50% have access to ~80M and above, but where are the applications that need it?