Increasing Broadband Internet Penetration
In the OIC Member Countries
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Assuming that governments of these countries have limited resources to inject investment in
universal broadband reach, it might be necessary to rely on incumbents and provide them with
the right incentives to deploy broadband networks. Infrastructure investment stimulation
policies should be put in place simultaneously with demand promotion mechanisms that drive
uptake to commercialize the supply availability.
VI.3.1. Tackling the broadband affordability challenge in low-income countries
Beyond the competitive stimuli mentioned above, the reduction of broadband service prices
can be achieved through several public policy initiatives.
The first one relies on state-owned telecommunications operators to offer, under their public
service imperative, a low-priced broadband service. Obviously, this option is only viable in
those countries that have not completely privatized their telecommunications industry. Under
this option, a state-owned broadband provider assumes responsibility, as a public service
entity, for providing a low-price broadband service. The advantage of this option is that, in
addition to fulfilling the objective of tackling the economic barrier, the offering can act as an
incentive for other private operators to launch their own more affordable service.
The second option entails a negotiation between the government and private operators for
them to offer a low-priced broadband service targeted for disadvantaged segments of the
population. In this case, government policy makers negotiate with private broadband
providers the offering of a low-priced plan. This can be achieved in the context of the
formulation of a national broadband plan. Such has been the case of the Brazilian National
Broadband Plan, which triggered a negotiation leading to the launch of the “Banda Larga
Popular”, offered by several operators. Another option to reach such an agreement could be to
attach the offering of a low-priced plan as a sine qua non condition for providing regulatory
approval of an incumbent plan. Such was the case in the United States, where the government
determined that Comcast should offer a low-priced broadband service if it were to receive
approval for acquiring NBC Universal. This triggered a process that led all other major cable TV
operators to join in the initiative. A slight variance of this option entails a move by an
incumbent wireline operator to offer a low priced plan and create good will in order to pre-
empt a threatening government regulatory move. Under this option, the critical success factor
is the determination of quid por quo conditions. In other words, what will the government offer
in exchange for gaining an agreement from the broadband operators (e.g. Tax reduction?
Regulatory holidays on fiber investment? Authorization to complete an acquisition?)
The third option comprises offering a subsidy for broadband purchase. Under service
subsidization policies, the government offers a refund on the cost of broadband access. This
option is being increasingly examined as a complement to some income redistribution policies.
Three types of programs have been implemented to overcome the personal computer
ownership barrier. The first one focuses on the provision of subsidies to reduce the acquisition
price of devices. The target in this case could be households at the lower end of the socio-
demographic pyramid, primary school to university students, and SMEs (especially micro-