Only 2 percent of the world lives in a country where broadband penetration has exceeded 80 percent, according to a report out today from TeleGeography. The report noted that worries over broadband saturation are really only appropriate in 10 countries out of the 127 the firm tracks, and the U.S. isn’t even one of those saturated markets. There are 36 countries where broadband providers serve less than 5 percent of the population.
So while there’s concern in the U.S. cable and telecommunications industries over growth in their fixed line businesses, what we really should be pondering is whether or not the low-hanging fruit of fixed-broadband access has been plucked, and if so, how do we get broadband to the rest of the world? TeleGeography defines broadband as a fixed network service having a downlink speed of 256kbps or greater. It includes services provided via DSL, cable, fiber and fixed wireless broadband/WiMAX technologies. It excludes 3G/mobile services.
I suspect it’s not cost-effective to build out a wired infrastructure in some parts of the world, either because equipment is stolen or because the rates customers might pay don’t justify the investment required. But given its importance in the 21st Century economy, giving up on broadband access would be wrong. There are two solutions I can see, but I welcome our readers’ thoughts.
The government can subsidize a wired infrastructure much like Australia’s government is doing today with its $31 billion investment in fiber, or providers can focus on wireless if it’s not cost-effective to build out wired broadband. In that case, their governments should consider policies that provide for available spectrum and understand how the current wired infrastructure needs to provide backhaul for wireless access. Actually, we have a similar issue in rural areas of our country, where wireless Internet service providers pay through the nose for access lines back to the Internet backbone — making it expensive to provide wireless broadband.