Introduction

Early developments in universal access and service policies targeted public and private access to copper based telephony services. By the start of the 21st century, fixed-line residential and fixed public payphone were included within most existing universal access and service definitions.

National programs promoting expansion of copper line networks and telephony services were reflected through measures such as the establishment of public telephone access centres and provision of private telephone connections to homes and businesses. The development of cellular mobile services was also a key means of expanding the reach of telephony services. As universal coverage of basic voice telephony services became close to reality in many countries and with the growing recognition of internet, particularly broadband services, as a key means of achieving economic and social goals, governments have in recent years turned their focus towards securing affordable high speed broadband access.

Initially using spare capacity in the telephone network, the internet is now the main driver of demand for network capacity. Growing innovation and technological advancements, especially with wireless and mobile products and their application, have enabled the rapid dispersion of broadband-capable services in areas that were previously inaccessible. These advancements, combined with market forces and a well-designed legislative framework, make broadband proliferation and penetration possible.

Private sector initiatives and investment are, and have proven to be, crucial to achieving widespread broadband access and use. But when market mechanisms alone do not meet the goals set for broadband access and use the important question that arises is what role should government play?

Although policy makers generally aim to expand broadband service coverage as much as possible with minimal government intervention, some degree of intervention may be required to complement the market and overcome impediments to universal broadband. It is important for policymakers to remember that universal access policies should not be a policy substitute for regulatory reforms to make markets operate more efficiently.* 

The objective of universality policies is to provide or maintain service to those who would not normally be served by market forces alone. In the context of broadband access, unserved or underserved groups include people living in rural areas or other high cost service areas, low income populations, and people with physical disabilities who may have difficulty using standard equipment. Gaps in availability, accessibility and affordability of broadband will typically remain between and within countries where government intervention is absent.Countries have varied in the boldness of their goals and methods to secure universal access to broadband. National broadband plans and strategies often provide targets for broadband rollout to populations or priority groups and communities, and indicate a clear commitment by governments to support the establishment of advanced infrastructure. A number of countries have already moved to include broadband as a universal service, as in Australia and the United Kingdom, and some countries go even further – Finland made broadband a legal right for its citizens in 2010. Yet in 2010, of the 99 developing countries with a universal access or service definition only 49 included internet dial-up and only 36 included broadband within their definition.* A table of data identifying the number of internet users per 100 people in countries with population over 50 million is can be found at the World Bank, Internet Users (per 100 people) database.* As Next Generation Access (NGA) and national backhaul networks are rolled out across developed and developing nations there is a growing momentum towards ensuring access to these networks. This is being driven by the social and economic concerns of both policymakers and populations. This creates opportunities and challenges for governments. How can governments help facilitate access to networks, doing so in partnership with private enterprises? How can fair access to networks be balanced against the need for the networks to deliver a return on investment to those who build them?

As a starting point, many governments have already adopted broadband plans setting out policy goals. Although the official definition of broadband is contentious, national governments have set their own target minimum speeds, typically reflecting expected future rates of usage. In Australia, the National Broadband Network Company (NBN Co) will provide superfast access at bit rates of up to 100 Mbps in order to meet anticipated future demand. A terraced approach also exists in a number of countries, such as in Malaysia where, under its High Speed Broadband (HSBB) service, designated high economic impact areas will receive access at 10 Mbps, with businesses receiving up to 1,000 Mbps (1 Gbps).* 

This chapter will provide an overview of the policy mechanisms being utilised by governments to ensure that populations have access to broadband products and services, and outline what policymakers can do to define a broadband development strategy capable of addressing market failures, work towards achieving universal broadband service and address potential policy challenges.

This chapter will discuss the different levels of intervention that a government strategy may pursue, the role of private-led competitive markets in achieving these objectives, the role of the government in narrowing or eliminating gaps between markets and a country’s development needs, and the design of effective government strategies to meet this challenge. Finally, this chapter will examine the use of fiscal resources to support private supply of broadband, including choice of policy instruments, the use of subsidies, and mechanisms to collect and disburse funds for subsidy.