Broadband is reaching rural areas, claims OECD report
A new report by the Organisation for Economic Cooperation and Development (OECD) reveals 'unprecedented' levels of broadband entry in rural and remote areas, which it argues governments should take into account before embarking on plans to subsidise infrastructure. 'The development of broadband access in rural and remote areas', builds on earlier studies on the availability of high speed Internet access in OECD member countries. These also concluded that governments should act with caution before providing financial assistance for the rollout of broadband. 'The economic and social case for developing broadband access is very strong and takes on added significance for rural and remote communities, where improved communications can address a variety of challenges posed by distance,' states the report. '[T]raditional paradigms for thinking about communications policy are being stood on their head,' it continues. 'One such paradigm that is being challenged is that rural areas are unlikely to attract new entrants because they are high cost areas to serve and characterised by insufficient demand.' Instead, the report points out that 'there is a rapidly increasing amount of new private sector entry occurring in the provision of broadband access in rural areas', particularly by wireless Internet service providers (WISPs). Another misconception that the report seeks to dispel is the notion that the prices charged for broadband access in rural areas must necessarily be higher, and the levels of service lower. It argues that the prices on offer are in some cases lower than those available in urban areas, and performance sometimes superior, although just how widespread these examples are is unclear. According to the OECD, in relation to communications policy making, these findings will serve to strengthen principles such as the promotion of open and competitive markets and technology neutrality. 'While there may be a place for government funding under some circumstances, the market should be given time to work. Broadband is, in fact, rolling out apace and has one of the fastest take up rates for all new communication services,' the report states. 'If rural broadband is not developing apace in a particular country, this could signal the need for a review of the competitiveness of market settings before considering the need for subsidies that are likely to further distort competitive outcomes.' Additionally, the report provides country-by-country updates on broadband development, which show that the number of subscribers in OECD countries is expected to reach 100 million by mid 2004, compared with 82 million at the end of 2003. Access to high speed Internet is now available in 75 per cent of households within these countries, and one in four of these have now signed up. A significant degree of disparity between OECD member countries remains, however. While over 90 per cent of homes have access to broadband in Belgium, Denmark, Japan, Korea, Luxembourg, Spain, Switzerland and the UK, countries such as the Czech Republic, Greece, Hungary and Ireland have only just launched broadband services.