OECD says rural broadband can be better than urban

Rural broadband is not lagging behind its urban equivalent, says the OECD. In fact in some instances rural customers get better service at less cost.

Rural broadband is not lagging behind its urban equivalent, says the OECD. In fact in some instances rural customers get better service at less cost.

The OECD has released a new report looking into broadband development in rural and remote regions that says governments need to beware of the urge to subsidise rural infrastructure development as there is no real need for it.

"If rural broadband is not developing apace, in a particular country, this signals the need for a review of the competitiveness of market settings rather than the need for subsidies that are likely to further distort competitive outcomes" says the report, entitled The development of access in rural and remote areas.

The report singles out the improvements seen in the wireless broadband sector over the past year as being of great benefit to the rural and remote broadband user around the developed world. New Zealand's own situation, with the government's subsidy programme Project Probe and developments in the wireless sector, gets a mention as well.

"Telecom New Zealand is beginning to experience competition in the provision of broadband access from fixed wireless development. Wireless ISPs are aiming to either compete head on with DSL, in those areas where it is available, or to provide service where the only option may be satellite".

Both BCL and Woosh initiatives are discussed as competitors to Telecom's DSL offering JetStream. However it is Wired Country's fixed wireless network in Franklin district which draws most attention for its recent promotion that increased customers' speed 10-fold for the same price.

"If the new levels of service, with the existing prices, are sustained in New Zealand, they are not only significantly better than those available via DSL in urban areas of the country but are also competitive by international standards".

Other wireless ISPs are also discussed positively, including ThePacific.Net in Nelson, Rural Networks in South Waikato and Airnet in the Hawke's Bay.

The report highlights the incredible speed at which broadband is being taken up by users in both business and residential sectors across the developed world, saying broadband figures worldwide have reached 80 million, up from 3 million in 1999.

"That is one of fastest take-ups of any new communication service experienced

in the OECD. It took, for example, less than half the time for broadband to grow from three million to 80 million subscribers than it took for mobile cellular services to achieve the same result".

The report puts the growth rate down to one thing: competition.

"The development of broadband access has developed at a much faster pace than the mobile market because it is taking place in a liberalised market".

The report claims the first decade of cellular growth was slow because the market was dominated by "monopolies and duopolies" and that it was only once the market was sufficiently opened up that higher levels of penetration were achieved.

The report will be made available on the OECD website in coming weeks.

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