Friday, 6 August 2010

Gov’t may pursue broadband infra project via public-private partnership

Manila Bulletin

The Aquino government can pursue the construction of a broadband infrastructure through a public-private partnership that will ensure ownership by a private company while government provides subsidy to guarantee its viability.

The construction of a broadband facility is as essential to economic development as much constructing roads and bridges is and should be pushed by the new government amid past controversies faced by the broadband project.

"The private sector should own it, but the government should provide subsidies for its viability," according to a key official of the Commission on Information and Communications Technology (CICT).

One of the greatest challenges in broadband infrastructure is how to provide broadband service to rural areas where population density is low which makes the facility non-financially viable. However, such facility will play an important part in rural development as it provides limitless information supply to agricultural activities, mining, rural government, and other industries contributing to economic development.

Because of the threat of financial failure, government needs to provide subsidies for the operation of the facility. And yet private sector ownership of the infrastructure will guarantee operational efficiency and long term sustainability.

The presence of broadband infrastructure has already become an economic indicator on how progressive an economy is even as the facility is believed to empower citizens and consumers.

Broadband connection speed is also an important factor in this infrastructure where even the United States has been left behind by Japan, France, and nine other countries in speed terms. According to the Organization for Economic Cooperation and Development (OECD), Japan posted as of October 2007 the highest broadband download speed at 93.7 megabits per second (MBPS), followed by France, 44.2 MBPS; Korea, 43.3 MPBS while the US only had 8.9 MBPS.

According to an Educause report, a government policy of unbundling costs in broadband service is a key to reducing prices a “countries without unbundling policies exceed prices in countries with unbundling policies.”

There has been an increased use of Wireless Internet Service Provider (WISP) to provide for broadband service in rural areas. One such successful wireless project is found in Scotland under the Tegola project. However, WISPs have the disadvantage of non-continuous connection in mountainous and heavily-foliated areas. Other related disadvantages of WISPs are security threats, lower speeds of up to 50 times slower, less stable network due to interference, and weather problems.

Similarly, satellite internet is an alternative in broadband data transmission. However, it has been known to be the most expensive option.

Prior to its cancellation on corruption charges, the government has committed to putting up the National Broadband Network in partnership with China’s ZTE for the original cost of $329.5 million.

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