2010/TEL41/DSG/WKSP1/002 Broadband and Spectrum Policy - Next Steps for the Digital Prosperity Checklist Submitted by: New Zealand Enabling Information Communications Technology Investment for Growth and Recovery Workshop Chinese Taipei 6 May 2010
Broadband d and Spectrum Policy Next Steps for the Digital Prosperity Checklist John E. Matheson Director of Legal Policy -Asia Pacific May 2010 1 INTRODUCTION The Digital Prosperity Check List ( DPCL ) identifies important action steps and resulting benefits from enhancing communications infrastructure Efficient, flexible use of spectrum is critical to achieving the benefits identified in the DPCL The adoption of performance metrics will enable Economies to assess their performance The benefits of enhancing connectivity are huge 2 1
Connectivity Matters 1B$+ GDP Impact for Every 10M Connected* Users are captivated by the freedom, security, and enhanced productivity that mobile phones make possible..* Access to telecom helps improve productivity & efficiency and enables benefits of economic growth to be shared 3 *McKinsey & Company Global Institute s research GDP increase due to 10 percentage-point increase in telecommunications penetration Source: World Bank, based on an analysis of 120 economies, 1980-2006. http://siteresources.worldbank.org/extinformationandcommunicati ONANDTECHNOLOGIES/Resources/282822-1208273252769/Building_broadband.pdf 4 2
1.4 Billion Internet Users >150 Million Websites 1.5B Web Searches Daily Traffic doubling every 2 years The Internet is BIG & GROWING 10 Hours of New Video Uploaded to YouTube Every Minute 1 Billion IM Users 100,000 Blogs Created Daily ¾ of a Trillion Dollars Online Sales Worldwide 3 Million Twitter Messages Sent Every Day 5 Source: Forrester & ABI National Broadband Plans Unlock Benefits The key elements should include; Minimum initial definition of Broadband: Ex for emerging markets: depending on local circumstances, countries should ensure that most citizens are able to get at least 1-2 Mbps initially, at high quality and affordable rates, and as expeditiously as possible Time bound goals established for deployment (coverage) as well as adoption (service and devices for access) (ex: cover 80% HH with BB by 2011, 50% of HH subscribe to BB by 2011) Establishment of globally recognized metrics and yearly reporting on progress to goals (ITU, UNCTAD) http://www.itu.int/itu-d/ict/partnership/ QOS performance recommendations Defined Subsidies (ex: Universal Service Funds), elimination of taxes on ICT 6 Spectrum assignment in a technology and service neutral manner for BWA 3
Broadband/ICT Plan examples Australia: connect 90% of homes to 100 mbps fiber network New Zealand: Connect all schools to high speed BB by 2012 Malaysia: 50% HH BB penetration by end 2010 Bangladesh: 1 million BWA subs by 2014 India: 100 million BB subs by 2014 Vietnam: Mobile BB coverage to 70% of population by 2015 7 Spectrum Policies for Wireless Broadband Wireless broadband is important to addressing the digital divide Strongly support technology and service neutrality Expeditious release of ample spectrum Avoid take backs Market- based approach to spectrum allocation Auctions where appropriate Include flexible duplex methods Secondary trading Aggregation subject to competition review 4
Mada Communications Summa Telecom Aspan Telecom Ducat/Arna Nursat Obit Telecommunications KCell AccessKenya Instaconnect KDN UUNet Wananchi One Communication KT SKT Kujtesa Asia-Pacific Arab Telecom 61 Service Providers Millicom Lao Co Ltd 18 Countries SKY Telecom Balticum TV Lattlecom Norby Telecom Telecentrs Comium Vodacom Comium Agathon Systems Libya Telecom Balticum TV Source: Informa Norby Telecom SC Lithuanian Radio & WiMAX: Open Your World 518+ Deployments in 146 Countries North America 46 Service Providers 2 Countries CALA 95 Service Providers 29 Countries 9 430+ Million POPs Covered Globally Europe 145 Service Providers 40 Countries Middle East 16 Service Providers 9 Countries Africa 92 Service Providers 37 Countries Estimated 300 Devices Available Today 180 More Under Development 10 Source: ORR Technology, July 2009 5
U.S. Spectrum Policy History Historical command & control Cumbersome, politicized Locked in old tech & services Technology & Service Neutrality Aggregate subject to antitrust review Technical flexibility if no interference to Neighbors Geographic Frequency Global Spectrum Policy Economic Implications 11 The Value of a Flexible Policy Approach ALL WRONG Analog standard mandated Fragmented, non contiguous licenses 2 licenses only 25 MHz each Heavy technical regulation Flexible Approach: Improved consumer value 20 year delay in US value at ~USD70Billion Global Spectrum Policy Economic Implications David Horne, Market-Oriented Spectrum Policy Evolution in the U.S.: Regulatory History from Cellular to PCS, February 2009 12 6
Flexible Policy Approach Situation: 190 MHz given flexibility to move from high power 1- way video to low power 2/way data. Attracted 3.2 billion in new capital FCC approach: Changed service parameters Rebanded to create contiguous licenses Didn t take back spectrum, charge fees Permitted long leases with non profit neighbors Enabled new BWA (hi-speed) competition Available to 120 million Americans EOY 2010 Global Spectrum Policy Economic Implications 13 Assignments Size Matters Cumulative CapEx/Km² time Global Spectrum Policy Economic Implications 14 7
The Cost of Delay Spectrum License Assumptions: Annual consumer benefits = $X Time value of money (discount factor) = 10% Then the spectrum s NPV for all time = $10X And NPV of benefits of first 3 years = $2.5X Spectrum Value Consumer Surplus Value Global Spectrum Policy Economic Implications (NPV Formula = Annual benefit/discount factor) 15 DPCL- Next Steps Benefits of BB/ICT are great Establishing market based policies And SMART (specific, measureable, Attainable, relevant, and time bound) BB/ICT objectives Accompanied by globally accepted mechanisms for tracking and reporting progress on a regular basis Will unlock these benefits to countries and citizens It is time to develop the next level of specificity to enable economies to set targets and effectively benchmark their performance 16 8
17 Appendix UNCTAD Core List of ICT Indicators 18 9
DPCL- Select Metrics from UNCTAD Infrastructure and Access: Fixed & Mobile BB subs A4,A5 International BW per pop - A6. Fixed BB tariffs A8 PIACs (public internet access centers) per localities by pop. A10 Education Student t to computer ratio ED4bis. % of schools with BB Internet ED5 % of ICT qualified teachers ED8 19http://new.unctad.org/default 575.aspx DPCL- Select Metrics from UNCTAD Business % of biz using computers ( type of connectivity) B1, B3 % of persons employed routinely using computers and internet B2, B4 % of biz with web presence B5. % of biz placing and receiving orders over internet B7, B8 % of Biz using Internet (type of connectivity) B9 Households % of HH with computer, internet access HH4. HH6 % of HH w/ BB access (type of connectivity) HH11 20 10