The Broadband Opportunity

For some people, accessing the Internet and all the benefits it offers—finding information in seconds, accessing entertainment, communicating—is a daily part of life that they often take for granted. But for the vast majority of the world’s population, Internet access is far removed from reality.

The benefits of broadband access extend beyond everyday convenience. It can impact the way individuals use social services and gain employment, and it can affect a country’s overall GDP. According to a World Bank report, every 10 percent increase in broadband penetration corresponds to a 1.38 percent increase in economic growth in low- and middle-income countries. In Latin America and the Caribbean, the report links a 10 percent rise in the market penetration of broadband services to a 3.2 percent average increase in GDP and a 2.6 percent boost in productivity.

Broadband service is essential to economic development because it connects people to each other and to vital information services. To add to existing efforts to provide affordable broadband access for all, Intel recently partnered with NetHope and several other global organizations (UNDP, Inveneo, GSMA, and USAID) to produce a paper for government agencies on best practices for accelerating broadband adoption.

The paper explores elements of policies and programs that accelerate broadband deployment and adoption, including competition, radio frequency spectrum, funding, public-private partnerships, and innovation. Here are a few highlights for leaders working on proliferation of broadband and related issues.

Encourage competition

In emerging markets, new service providers are important to establishing broadband infrastructure. Policymakers should help eliminate legal barriers to new entry and governments should aim to create policies that foster competition. Regulators in emerging market economies must strike a balance between encouraging incumbents to invest, and facilitating new entry and robust competition among service providers. The benefits of a competitive approach can be seen from the enormous success of cellular telephony, where competitive markets have enabled global mobile-cellular subscriptions to reach 6.8 billion.

Ensure that universal service funds work well

Governments need to drive further broadband penetration by creating national plans and using universal service funds. More than 100 countries have established national broadband plans, which include specific time-bound objectives for broadband deployment and adoption, and have a positive impact on broadband growth. Universal service funds, created to enable connectivity for the underserved, are now distributed in a competitive manner to encourage deployment and adoption, not only for infrastructure, but also for services, content, devices, and training—all of the elements needed to meet their mandates. Take Vietnam’s Program 74, an initiative approved by Prime Minister Phan Van Khai to extend basic telecomm services to extremely poor rural areas. Specifically, the program aimed to equip 70 percent of the villages from Vietnam’s 62 poorest districts with a public Internet access point. The Vietnam Public Utility Telecommunication Service Fund supported the project, offering grant assistance and loans for the initial infrastructure and network development, as well as reduced service charges and VAT exemption. In four years, the necessary financial support and field capacity were in place, and by June 2010, 22 million people (about 26 percent of the national population) benefited from the policy, and telecomm providers gained 75,623 new Internet subscribers from the rural market. The program faced challenging geographic and socio-economic conditions, but not enough to stop progress. The Vietnamese government identified additional goals through 2020 to continue to build upon this work.

Implement demand-side programs

Countries around the world are recognizing the importance of encouraging and establishing demand-side programs to unlock broadband benefits. Even if they can connect, many people don’t, due to cost, or lack of interest or ability. These programs, supported directly by the government and public-private partnerships, can highlight the importance of broadband and information and communication technology (ICT), address digital literacy problems, and expedite network and broadband service expansion. Studies conducted by the PEW Research Center found that a significant number of non-adopters do not see the importance of broadband and Internet access, nor do they know how to use the technology. Similar studies conducted in Colombia found similar results, and also discovered that a large majority of small and medium enterprises (SMEs) in the country did not understand how broadband access could help their business. Governments can help by establishing e-learning initiatives for ICT skills development among the general population and underserved groups. The Indian government’s national ICT plan includes a goal for each household to have at least one digitally literate person, and Intel and the broader private sector are now collaborating with the government through a national digital literacy initiative to make this a reality. Countries can also establish low-interest financing, subsidy programs, and reduced tax rates to support ICT and broadband purchases.

Each country is unique, but collaboration between government, technology providers, and advisors is essential. Long-term success comes when all involved parties can see the greater good and are willing to get there with some give-and-take. We believe it is possible to reach a point where no person is left out of access to expansive knowledge, e-learning, secure healthcare, online banking, and the many other innovative services broadband can deliver.

Read more stories by William A. Brindley & Shelly Esque.