“The consumers will pay for data plans but not content. The aggregators, content providers and search engines say it’s up to the network providers to pay. And network providers won’t innovate if there’s no reward for providing capacity.”
Thomas Jones, partner with Corrs Chambers Westgarth, remarked that government-driven NBN rollouts “need transparency, investment certainty and retail and wholesale competition” to succeed.
Jones added that the NBN Co plan is still plagued by political uncertainties, from NBN-related legislation languishing in parliament to the prospect of the opposition party dissolving the company if it wins the pending national election.
Meek of BSG pointed out that national broadband plans in general tend to vary widely in terms of mandating coverage and speeds, which also affects projections on take-up rates.
“There’s no systematic way of determining just how much government intervention is needed to enable ubiquitous broadband and balance the tradeoffs between coverage, speed and take-up,” he said.
A model from BSG that assesses the incremental benefits of broadband investment indicates that most markets are not likely to roll out fiber-level broadband beyond 20% penetration without government intervention, but that the UK broadband plan – which has set its universal broadband goals at a modest 2Mbps minimum – will yield a much higher rate of return than if it were to require FTTH to the majority of homes.