As many countries seek to introduce greater competition there may be valuable lessons to be drawn from applying open access policies to next generation broadband infrastructure with partial public ownership or financed by utilities (e.g. backbone fibre associated with transport or electricity grids). Therefore, governments and regulators need to consider such policies – especially where there is insufficient competition – along with a public-private partnership to enhance capacity; speed, QoS and decrease costs so that the entire economy can continue to fully leverage its potential.

1. Mohamed Bouanane– Director – Strategic Management Consulting
August 20, 2014
The ICT sector plays a vital role in economic and social development and its contribution is critical to enhancing productivity and economic efficiency, creating employment opportunities, and achieving more balanced regional development. In a globalized world, the economy in general and the digital economy in particular cannot deliver its benefits without a world-class communication infrastructure (Next Generation National Broadband Network NG NBN). By providing ubiquitous superfast broadband connectivity to all, new opportunities will be offered for new communication styles (between individuals and enterprises), improve quality and accessibility of innovative services (e.g. education and healthcare), increase economic productivity, and connect small business to new customers and markets. However, what would be the best approach to achieve a cost-effective super-fast broadband infrastructure in a reasonable time- frame?
NG NBN Development – A PPP for an Open Access Model

2. NG NBN Development: A Public Private Partnership for an Open Access Model
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The digital economy cannot deliver its benefits without a world-class ICT infrastructure. Thus, the ICT sector, and in particular the high speed (and now superfast) broadband networks play a vital role in economic and social development. The ICT sector contribution to productivity enhancement (contributing between 25% and 50% of productivity growth) and economic efficiency, creation of employment opportunities is critical. Furthermore, it can help achieve more balanced regional development1. Indeed, over the last decade, a number of developed and emergent economies have drawn up broadband strategies to bridge the gap in supply in this domain. However, despite many reforms in the telecommunications sector conducted in a majority of countries and despite the impressive development of the Telco industry, much of the developed countries’ population don’t have access to super-fast and ultra-fast broadband infrastructure and few of the population in the emergent countries have access to high speed broadband services.
Addressing issues of capacity, speed, QoS and cost
Broadband is more than number of subscriptions and penetration rates: Higher speeds, better availability and quality of service, and reasonable prices are important factors to boost the uptake and create a rapid and important impact on the socio-economic outputs. Superfast broadband is a prerequisite for the Internet of Things and thus ubiquity and high speed of mobile networks is necessary in order to be able to carry out the big amount of information and traffic. Broadband has become a key development enabler and has the potential to contribute to economic growth, human development social well-being; it should become part of national policies and strategies. Broadband is as well critical to achieving Millennium Development Goals and high-capacity networks are seen as a national cause and strategic assets in developed countries to enhance competitiveness and ensure a sustainable development.
Most of emergent economies need to impulse the FTTH/B market to increase competition and lower process, to develop the mobile backhaul which requires high capacity, to enhance competitiveness and fair access, as well as to support the provision of innovative services at affordable prices such as TV and video that require high quality networks. Moreover, the business sector is increasing its ICT usage and will be in need for super fast and high quality of broadband services in order to be able to benefit from sophisticated services, such as cloud computing.
Economic impact of broadband
World Bank study2 found that low-income and middle-income countries experienced “Every 10 percent increase in broadband penetration improves the GDP growth by 1.38 percentage points” between 2000 and 2006, more than in high-income countries (1.21 percentage point). The study also demonstrates that broadband has a potentially higher growth effect than other ICTs (Internet, mobile telephony, fixed telephony). Other independent (Katz et al., McKinsey & Company, Analysys Mason, Czernich et al.) studies have estimated an impact on the GDP growth
1 Caveat: It should be noted that badly planned and uncoordinated ad hoc ICT infrastructure developments can have the reverse affect – creating imbalances through digital islands and digital divides.
2 Christine Zhen-Wei Qiang and Carlo M. Rossotto, IC4D: Extending Reach and Increasing Impact, Chapter 3: Economic Impacts of Broadband, GICT Dept. World Bank, p. 45 (2009).

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between 0.2 and 1.5 percentage points, and 1.5% greater labor productivity (Booz & Company, 20093) for 10% increase in broadband penetration.
Numerous studies have estimated the impact of broadband on job creation for specific developed countries (e.g. USA, UK, Switzerland, Germany) between 2.5 and 3 additional jobs per direct job created to deploy the broadband infrastructure (Katz, Crandall el al., Atkinson et al., Libenau et al.). Katz4 estimated that an increase of about 8 percentage points of broadband penetration in 12 Latin American countries could result in almost 8% increase on average over their employment rate.
Another study5 found that a 10 percentage-point increase in high-speed broadband penetration raises annual GDP per-capita growth by 0.9 to 1.5 percentage points for a panel of OECD countries .In other terms, after a country has introduced broadband, GDP per capita is 2.7 to 3.9 percent higher on average than before its introduction.
Even though the results of these studies are country or region specific and cannot be applied directly to other economies, they provide an estimate of the potential growth benefit – additional growth of GDP and improvement of employment rate – that could result from broadband development.
Public-private-partnership and open access stimulate competition in the digital economy
Development of fiber infrastructure to the home / building (FTTx) has encountered major barriers since the high level of required investment – in particular in remote areas – faces competition of legacy technologies (mostly DSL), lack of national coordination especially in emergent markets, and low public incentives. Fast broadband adoption – particularly in wireless and fibre – remains crucial for overall economic development. The Internet is now established as a key tool – fourth utility – that supports every sector of the economy and is a fundamental driver of innovation, productivity gains and economic growth.
Governments – realizing the importance of enabling the development of such infrastructures on the long term – particularly in emergent markets should consider different tools to promote the delivery of superfast broadband infrastructure, enhance customer’s experience with multimedia and next generation services, and increase the usage and penetration rates. Regulators around the globe are trying to build the right framework to address issues related to capacity, speed, quality of service and cost: How to roll out fast and super-fast broadband networks and to make access widely available and affordable.
Open access6 refers to wholesale access to network infrastructure or capacity that is provided to all market participants on fair and reasonable terms, and on transparent and non-
3 Booz & Company, Digital Highways: The Role of Government in 21st-Century Infrastructure, 2009.
4 Prof. Raul L. Katz, Broadband demand and its economic impact in Latin America. Proceedings of the 3rd ACORN- REDECOM Conference Mexico City May 22-23rd 2009.
5 Nina Czernich, Oliver Falck, Tobias Kretschmer & Ludger Woessmann, Broadband Infrastructure and Economic Growth, CESifo Working Paper No. 2861, December 2009.
6 Open Access means the creation of competition in all layers of the network allowing a wide variety of physical networks and applications to interact in an open architecture. Simply put, anyone can connect to anyone in a technology-neutral framework that encourages innovative, low-cost delivery to users. It encourages market entry

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discriminatory basis. Allowing new entrants to connect and use existing infrastructure, is more affordable and less risky than building their own networks from scratch. Thus why open access agreements are crucial for promoting competition, increasing consumer choice and lowering prices. However, open access agreements have rarely been built voluntarily. Most open access policies have been the result of direct or indirect regulatory authority intervention. For instance, wireless open access policies have contributed to the emergence of MVNOs, which in turn contributed to enhancing innovation and increasing services competition.
The high costs, cash intensive and long time-frame of new public-funded deployment of access infrastructure are the main reasons why governments and regulators – especially in developing countries – should seek a close cooperation with the private sector for the delivery of such high- capacity broadband infrastructure. Moreover, having a Government funded / operated infrastructure company competing with the private sector would false the competition and prevent the private facility-based companies from obtaining a reasonable return on investment. By extending rather than duplicating the existing infrastructure, such public-private partnership PPP will decrease the deployment timeframe and focus will be directed into areas where the private sector cannot primarily address.
The PPP for an open access is a combination of both infrastructure sharing and partial government funding. Such partnership will significantly reduce the investment expenditure for both the communication service providers and the government, and accelerate the deployment of broadband infrastructure. In general, the PPP is expected to encourage all facility-based owners to take part in the partnership. Therefore, incorporating part or the entire existing infrastructure (Telecom incumbent and utilities companies) will ensure an efficient delivery of the broadband strategy. Also, PPP for open access projects will help introducing at a large scale the service-based competition which drives the telecommunications sector development especially in the emergent markets, thus improving customers’ experience and ensuring affordable fast broadband access to the whole community. In that regard, the Singapore and Australia initiatives are good examples for a best practice of PPP in telecommunications.
In 2009, the Australian Federal Government committed to build the key enabling infrastructure for the digital economy, the National Broadband Network (NBN), through a public private partnership initiative to bring fast broadband to the entire population within 10 years (93% through fibre optic and 7% through fixed wireless and satellite). The Government established the NBN Co to design, build and operate the fast broadband network and ensure all Australians have access at affordable prices and at least cost to taxpayers (total Capex US$ 37.4 billion with government initial investment of US$ 3.4 billion). The NBN, based on an ‘optimized multi- technology mix’ model, is intended to be an open wholesale-only access network, available to all operators on equivalent terms.
The Singapore’s Next Generation Broadband Network NGBN is all-fibre ultra-high-speed broadband network, a key project under the Intelligent National 2015 (iN2015) master plan, to transform the country into an intelligent city powered by ICT. Singapore has adopted an open access model to allow the provision of wholesale services (dark passive fibre infrastructure and active services) nationwide to retail providers on a non-discriminatory basis and at attractive prices that can stimulate a vibrant and competitive retail market in the ultra-high speed
from smaller, local companies and seeks to prevent any single entity from becoming dominant. Open access requires transparency to ensure fair trading within and between the layers based on clear, comparative information on market prices and services. Source: Infodev, 2005.

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broadband sector (to deliver speeds of 1 Gbps and beyond). Such open access model (public fund of around US$ 650 million) was established to catalyze development and deployment of innovative interactive digital services to homes, schools, hospitals, government and businesses.
Possible approaches and models to build the PPP for an open access to broadband infrastructure project have to be carefully assessed by the regulator, including financial, governance, and stakeholders contribution aspects – in particular with regards to the implication of the incumbent in such project. Also, potential concerns with PPP open access such as market distortion, anti-competition should be addressed at the earliest stage of the project definition. Particular regulatory provisions should be introduced to ensure the open access nature of the network as well as the wholesale model, thus preventing the owner from competing at the retail level.
Conclusion
While it is clear that wireless will be the main component of broadband access expansion in most developing countries, there is a case to be made for faster and more stable fixed access to be deployed, especially if legacy market players haven't adequately addressed the fixed market. ICT for development is moving from Mobile “miracle” to the need for broadband access. Fast broadband adoption – especially in wireless and fibre – remains crucial for overall economic development. It is a fundamental driver of innovation, productivity gains, economic and GDP growth.
Developed countries and most of emergent economies are embarked(ing) in open access policies to stimulate competition in the digital age. Open next generation broadband access is of high importance and play a great role in developing effective competition dynamics. The role of local loop unbundling in developing competition in numerous OECD countries has been significant. Successful next generation national broadband developments such as Germany and the United Kingdom in Europe or Japan, Korea and Singapore in Asia are (partly, if not mostly) the outcome of well implemented open access policies.
As many countries seek to introduce greater competition there may be valuable lessons to be drawn from applying open access policies to next generation broadband infrastructure with partial public ownership or financed by utilities (e.g. backbone fibre associated with transport or electricity grids). Therefore, governments and regulators need to consider such policies – especially where there is insufficient competition – along with a public-private partnership to enhance capacity; speed, QoS and decrease costs so that the entire economy can continue to fully leverage its potential.
Author: A dedicated professional with over 20 years of consulting experience across Europe and the Middle East. Have high expertise in the field of strategic management consulting with an in-depth experience and a particular focus on TMT, digital and knowledge economy sectors (government and public policy, telecom operator, regulator, market). He is a leader in designing unified policies and convergent planning across multi-sectors and involving multiple private and public stakeholders. He brings his strategic thinking and his balanced management approach with the ability to recommend pragmatic and innovative policies, viable business cases and action plans that enable the creation of greater and sustainable value.