Broadband access is already widely available in the OECD area, yet not everyone is biting. Why?
Everyone has read about the benefits of broadband technology and if you have just opened this article online with a slow speed modem, perhaps you will want to read more. For the transition from traditional phone-internet communications to broadband is rather like the shift from propeller planes to the jumbo jet.
Broadband enables businesses to transmit more data faster from one location to another, thus helping them stay on top of their competition. Teenagers can download their favourite music or video, and rugby fans can watch their favourite try from the recent world cup finals. It is not just for entertainment, of course; doctors use broadband to send X-rays for rapid consultation, for instance. And for most of these users, broadband represents the first “always on” connectivity to the Internet.
With all these benefits of faster transmission speed of larger information volumes, there must be something we’re missing. Too many homes and businesses remain mired in the slow download age of first-generation connectivity, unwilling or unable to access broadband.
True, with growth of 53% over the past year alone, translating into 75 million broadband subscribers in OECD countries by the end of September 2003 and an estimated annual US$30 billion in access revenue, the significance of broadband is growing. Moreover, access is now available to three quarters of households across the OECD area.
On the other hand, with an average OECD penetration rate of only 6.6 subscribers per 100 inhabitants, the potential for growth is still large. It is true that Korea has reached a mature market with over 70% of households being connected. But some countries have barely started service. The demand may be there, but often not the supply. Availability is uneven within countries too, particularly in rural areas. Yet the cost of upgrading networks to provide broadband is falling and a variety of new platforms are being deployed, such as in fixed wireless technology. In short, the general consensus is that while broadband is a rapidly growing technology, it has much more room to expand.
Such is the concern that not enough is being done to seize the opportunities broadband presents for economic and social development, that the OECD’s Committee on Information, Computer and Communications Policy (ICCP) recently issued a statement calling for faster progress. It highlights the need for more competition in communication markets, for instance, and continued market liberalisation.
Government can only do so much to expand broadband use. The real lead has to come from the private sector, since a competitive marketplace is the best way to facilitate its growth and to maximise its capacity, the OECD statement stresses. This depends upon regulatory frameworks, like establishing safeguards against one firm controlling most readily available access, and a heightened culture of security to prevent fraud and strengthen networks against threats or breakdown (see article by Anne Carblanc).
The market for new systems is vibrant enough. New technological developments, in fixed wireless, mobile wireless, fibre to the home, satellite and even broadband through electric cables, are competing with more established DSL and cable technologies, which are themselves evolving rapidly. The capabilities of broadband and the demand for broadband services will no doubt continue to surprise us.
See the broadband statement at www.oecd.org/sti
For more on broadband, contact Sam.Paltridge@oecd.org
©OECD Observer No 240/241, December 2003