broadband strategies handbook.pdf - Khazar University

public sector investment for private investment. There is also the questionof whether and to what extent scarce public sector resources, for whichthere are many competing demands from other sectors, should be used toextend broadband ahead of or beyond the market.Governments have a range of instruments at their disposal to narrowgaps or accelerate rollout of broadband (see chapters 1 and 3). The choice ofinstrument depends on the specific obstacles that the government is tryingto overcome. These obstacles may involve the following:• A proposed investment may not be commercially viable.• The cost of doing business in the country may be too high.• Laws and regulations may not be well suited to facilitate the adoption ofnew technologies and business models.• There may be a lack or shortage of long-term financing (especially inlocal currency) commensurate with long economic lives and paybacktimes of the investments.• Regulatory and political risk may undermine what otherwise would bean attractive business proposition.• Uncertain prospects for market development may pose excessive commercialrisk.This chapter seeks to provide an overview of what policy makers can doto address perceived shortfalls, to define a broadband development strategycapable of addressing market failures, and to work toward achieving universalbroadband service. It discusses the different levels of access that a governmentstrategy may pursue, the role of private-led competitive markets inachieving these objectives, the role of the government in narrowing or eliminatingany gaps between markets and the country’s development needs,and the design of effective government strategies to meet this challenge.This chapter then examines the use of fiscal resources to support privatesupply of broadband, including choice of instruments, use of subsidies, anduse of mechanisms to collect and disburse funds for subsidy.Universal Access Strategyand Broadband DevelopmentThe history of information and communication technology (ICT) developmentin low- and middle-income countries shows that private-led, increasinglycompetitive markets are highly effective at extending new networks156 Broadband Strategies Handbook