Mobile operators are short term cure, long term cause of broadband divide

by Steve Blum • , , , , , , ,

Wireline upgrades get low priority on the wrong side of the divide.

Mobile broadband networks are increasingly ubiquitous throughout the world, and are the most widely used way of accessing the Internet in developing countries. But that’s despite high costs and stingy caps on data transfer. As a solution for increasing primary household access to broadband and encouraging people to use it, mobile networks have limited potential, according to a South African broadband policy study

Of the access mechanisms, mobile coverage is the most extensive, but mobile broadband access is limited to lucrative urban areas and data costs are relatively high. Extending broadband access is dependent on allocation of high demand spectrum. It is also dependant on higher tower density, which requires additional investments by mobile operators.

The problem isn’t limited to the developing world. The California Public Utilities Commission has put itself in a similar box by, on the one hand, recognising that it’s economically difficult, if not impossible, to rely on mobile operators for household or business Internet access but, on the other, giving mobile coverage claims equal standing with wireline networks in determining which communities lack minimum service and are eligible for infrastructure subsidies.

One company – Comcast – is tightening its grip on Californian cable customers and the two biggest telephone companies – AT&T and Verizon – are cutting off wireline support for less affluent communities and pushing subscribers toward more costly mobile data. All three are spending big money lobbying California legislators and policy makers in largely successful efforts to protect their turf. If you allow incumbents to write the rules for subsidising competitive infrastructure construction – rules that relegate low income areas to high cost mobile service – you will only increase the digital divide. Whether you’re in California or South Africa.