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The Digital Divide: transforming lives for the

better or worse!

FITCE Congress 2008Michael Browne (23rd September 2008)

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Contents

• Why broadband matters - National, Enterprise & Individual

• Broadband Availability, Adoption and Affordability

• Next Generation Broadband Applications

• Next Generation Access Network Roadblocks

• Next Generation Access Network Evolution

• Encouraging Wider Deployment of Next Generation Access Networks

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Why Broadband Matters!

National

• Positive impact on GNP • Early broadband access accelerates economic growth, • Where to locate a business

Enterprise

• Higher labour productivity. Increases profits. • Wider market.• Increases the number of business

Individual

• Easier to join the workforce.• Removes the geographic constraints from social interaction. • Supports any scale of social group • Improves educational performance • Enables more non-verbal communication

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Broadband Availability, Adoption and Affordability

Available 92%

DSL coverage in the EU-15 was 91.9% in Dec 2006

The average availability for rural areas was 76%.

Cable modem broadband availability was 37% in Dec 2006

Adoption 20%

Average take up rate is 20%, (Range from 35.6% to 7.6%).

Dominated by males, young, more educated and higher income

Affordable <1% of monthly GDP per capita

The lowest-priced broadband is less than 1% of monthly GDP per capita.

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Next Generation Broadband Applications

• E-health Applications

• Lifelong Learning

• General High Definition TV (HDTV) Next Generation Video

(3D) Remote Computing Home Surveillance 3D Gaming

Source: Analysys for Broadband Stakeholders Group

Maximum Downstream Requirements

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Next Generation Broadband Applications : E-Health Ageing Population – Rising Health Costs

85+

65-74yrs

15-44yrs

45-64yrs

75-84yrs

5-14yrs

0 - 4yrs

Relative Healthcare Costs per Capita (Mayhew, 2000)

1.0

0.4

0.53

1.70

0.82

3.2

5.52

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Next Generation Broadband Applications : Lifelong Learning

21st century technologist —

• expert in a range of subjects, versatile, experienced, and articulate.

• Broadband and distance education help to improve life-long learning

• Use of basic applications (word processing) are learned in school.

• General use of computers (surf the internet) is learned outside the school

setting.

Broadband access results in significant improvements in pupils’

performance

• 25% use internet for education (broadband)

• 14% use internet for education (non-broadband)

Minimise the Social Divide by smoothing out the Digital Divide.

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Next Generation Access Networks Roadblocks: Capital Cost and Take Rate

• Capital Cost

Fibre Network Layout and Capital Expenditure Source: OECD (2007)

FTTH Take-Up Rates Source: Yankee Group Research (2008)

Project Country Homes Passed Take up

Years since roll out

Orange France 146,000 ~ 5% 1 Pau BC France 43,000 15% 2 Verizon FiOS USA 10,000,000 23% 2 ViaEuropa Sweden 10,000 25% 1 Lyse Tele Norway 192,000 60% 4 MalarEnergi Sweden 37,000 75% 8

NTT Japan 42,630,000 21% 6

• Take Rate

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0

10

20

30

40

50

60

70

80

90

100

0 1 10 100 1,000 10,000 100,000

Next Generation Access Network Roadblocks: Relative Costs of Broadband Platform

UrbanRural

Population Density per km2

Rel

ativ

e C

ost

/Co

mp

lexi

ty

(%)

Satellite

ExistingWireless

PotentialWireless DSL

CableModems

OpticFibre

Suburban

0.1

Adapted from Gérald Chouinard - ITU News magazine http://www.iiasa.ac.at

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100 Mb/s 50Mb/s 15Mb/s 5Mb/s 1Mb/s 0.5Mb/s Population Density

FTTH

FTTCab

HFC Co-ax

Twisted Pair

Wireless

Satellite

Broadband Platform

Next Generation Access Network Evolution

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Next Generation Access Network Evolution

• Urban area: population density > 500/km²

• Suburban area: population density between 100/km² and 500/km²,

• Rural area: population density < 100/km²

TI's network evolution is estimated to result in

• 16% Fibre to the Home

• 49% Fibre to the Cabinet

• 35% Fibre to the Exchange

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Next Generation Access Network Evolution: Digital Slices

Laissez-faire approach to fixed network Unable to get broadband 1-5 Mb/s, 5-10Mb/s, up to 25Mbs up to 50Mb/s and up to 100Mb/s

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Recommendations: Encouraging Wider Deployment of Next Generation Access Networks (NGAN)

Individual• Focus on specific hard-to-reach groups (poor, limited education ,etc.) • Financial incentives/ Tax breaks to purchase a PC and broadband.• Offer public broadband access points

Businesses• Focus on SMEs and start-ups. (financial incentives, tax credits) • Creating business areas with very fast broadband access • Adapting laws to make teleworking more feasible.

Expected Results• Overcome the "pump head" resistance to NGANs. • Generate significant construction activity.• Reduce the risk associated with the high capital expenditure.

SMEs: tax relief €5,000, 100Mb/s connection Rural farm families: tax relief of €2,000, for a PC and 20Mb/s connection Elderly: €2,000 grant for an e-health solution,