IDEAS home Printed from https://ideas.repec.org/a/eee/telpol/v40y2016i8p755-773.html
   My bibliography  Save this article

A cost study of fixed broadband access networks for rural areas

Author

Listed:
  • Rendon Schneir, Juan
  • Xiong, Yupeng

Abstract

The deployment of high-capacity broadband access networks in rural areas in Europe lags behind that in urban and suburban areas. This study assesses the cost implications for the rollout of fixed access networks capable of providing citizens with downstream broadband capacities of 30Mbps or 100Mbps, which have been defined in the European Digital Agenda as targets that should be met by 2020. A cost model was employed to determine the cost of a home passed and the cost of a home connected for various fibre- and copper-based networks in rural areas. It was found that the cost of deploying a network outside a town or village in a rural area is on average 80% higher than the cost of deploying the network in the town or village. This situation may lead to a digital divide within the same rural area. For all the geotypes analysed, the following order of costs (in descending order) was identified: FTTH, FTTdp-Building, FTTdp-Street, FTTRN, FTTC and CO-VDSL. Given the long lengths of distribution, feeder and drop segments required, some network architectures will not be able to provide all households in some areas with the minimum bandwidth of 30Mbps as defined in the European Digital Agenda. Overall, it is possible that operators will need to create a combination of various broadband access networks, due to the significant cost differences between networks. Policymakers will need to address several topics to promote the rollout of broadband networks in rural areas: how the digital divide within a rural area can be avoided; a National Broadband Plan that clearly addresses the provisioning of broadband in rural areas; elaboration of studies on broadband demand in rural areas; and the assessment of costs and technical capacity of wireless networks in rural areas.

Suggested Citation

  • Rendon Schneir, Juan & Xiong, Yupeng, 2016. "A cost study of fixed broadband access networks for rural areas," Telecommunications Policy, Elsevier, vol. 40(8), pages 755-773.
    • Handle: RePEc:eee:telpol:v:40:y:2016:i:8:p:755-773
    DOI: 10.1016/j.telpol.2016.04.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0308596116300283
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.telpol.2016.04.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Prieger, James E., 2013. "The broadband digital divide and the economic benefits of mobile broadband for rural areas," Telecommunications Policy, Elsevier, vol. 37(6), pages 483-502.
    2. Götz, Georg, 2013. "Competition, regulation, and broadband access to the internet," Telecommunications Policy, Elsevier, vol. 37(11), pages 1095-1109.
    3. Grzybowski, Lukasz, 2014. "Fixed-to-mobile substitution in the European Union," Telecommunications Policy, Elsevier, vol. 38(7), pages 601-612.
    4. Puschita, Emanuel & Constantinescu-Dobra, Anca & Colda, Rebeca & Vermesan, Irina & Moldovan, Ancuta & Palade, Tudor, 2014. "Challenges for a broadband service strategy in rural areas: A Romanian case study," Telecommunications Policy, Elsevier, vol. 38(2), pages 147-156.
    5. Haller, Stefanie A. & Lyons, Seán, 2015. "Broadband adoption and firm productivity: Evidence from Irish manufacturing firms," Telecommunications Policy, Elsevier, vol. 39(1), pages 1-13.
    6. Dauvin, Magali & Grzybowski, Lukasz, 2014. "Estimating broadband diffusion in the EU using NUTS 1 regional data," Telecommunications Policy, Elsevier, vol. 38(1), pages 96-104.
    7. Ovando, Catalina & Pérez, Jorge & Moral, Antolín, 2015. "LTE techno-economic assessment: The case of rural areas in Spain," Telecommunications Policy, Elsevier, vol. 39(3), pages 269-283.
    8. Amendola, Giovanni Battista, 2015. "Ultra-Broadband For All In Europe: Can Access Regulation Hinder Innovation And Welfare Maximisation?," 26th European Regional ITS Conference, Madrid 2015 127120, International Telecommunications Society (ITS).
    9. Rendon Schneir, Juan & Xiong, Yupeng, 2013. "Economic implications of a co-investment scheme for FTTH/PON architectures," Telecommunications Policy, Elsevier, vol. 37(10), pages 849-860.
    10. Bourreau, Marc & Cambini, Carlo & Hoernig, Steffen, 2012. "Ex ante regulation and co-investment in the transition to next generation access," Telecommunications Policy, Elsevier, vol. 36(5), pages 399-406.
    11. Oecd, 2011. "National Broadband Plans," OECD Digital Economy Papers 181, OECD Publishing.
    12. Belloc, Filippo & Nicita, Antonio & Alessandra Rossi, Maria, 2012. "Whither policy design for broadband penetration? Evidence from 30 OECD countries," Telecommunications Policy, Elsevier, vol. 36(5), pages 382-398.
    13. Nucciarelli, Alberto & Castaldo, Angelo & Conte, Elisabetta & Sadowski, Bert, 2013. "Unlocking the potential of Italian broadband: Case studies and policy lessons," Telecommunications Policy, Elsevier, vol. 37(10), pages 955-969.
    14. Balmer, Roberto E., 2015. "Geographic regulation of next generation broadband networks: A review of practical cases and recent literature," 26th European Regional ITS Conference, Madrid 2015 127125, International Telecommunications Society (ITS).
    15. Briglauer, Wolfgang & Gugler, Klaus, 2013. "The deployment and penetration of high-speed fiber networks and services: Why are EU member states lagging behind?," Telecommunications Policy, Elsevier, vol. 37(10), pages 819-835.
    16. Hallahan, Ryan & Peha, Jon M., 2010. "Quantifying the costs of a nationwide public safety wireless network," Telecommunications Policy, Elsevier, vol. 34(4), pages 200-220, May.
    17. Rendon Schneir, Juan & Xiong, Yupeng, 2015. "Economic aspects of fibre to the distribution point with G.fast," Telecommunications Policy, Elsevier, vol. 39(6), pages 450-462.
    18. Cave, Martin, 2014. "The ladder of investment in Europe, in retrospect and prospect," Telecommunications Policy, Elsevier, vol. 38(8), pages 674-683.
    19. Frías, Zoraida & González-Valderrama, Carlos & Martínez, Jorge Pérez, 2015. "Keys And Challenges To Close The Rural Broadband Gap. The Role Of LTE Networks In Spain," 26th European Regional ITS Conference, Madrid 2015 127137, International Telecommunications Society (ITS).
    20. Sundquist, Mårten & Markendahl, Jan, 2015. "A case study cost modelling of regulatory alternatives to mitigate the mobile network coverage and capacity problems in rural areas," 26th European Regional ITS Conference, Madrid 2015 127181, International Telecommunications Society (ITS).
    21. Tahon, Mathieu & Van Ooteghem, Jan & Casier, Koen & Verbrugge, Sofie & Colle, Didier & Pickavet, Mario & Demeester, Piet, 2014. "Improving the FTTH business case–A joint telco-utility network rollout model," Telecommunications Policy, Elsevier, vol. 38(5), pages 426-437.
    22. Flacher, David & Jennequin, Hugues, 2014. "Access regulation and geographic deployment of a new generation infrastructure," Telecommunications Policy, Elsevier, vol. 38(8), pages 741-759.
    23. Ruhle, Ernst-Olav & Brusic, Igor & Kittl, Jörg & Ehrler, Matthias, 2011. "Next Generation Access (NGA) supply side interventions—An international comparison," Telecommunications Policy, Elsevier, vol. 35(9), pages 794-803.
    24. Lin, Mao-Shong & Wu, Feng-Shang, 2013. "Identifying the determinants of broadband adoption by diffusion stage in OECD countries," Telecommunications Policy, Elsevier, vol. 37(4), pages 241-251.
    25. Beltrán, Fernando, 2014. "Fibre-to-the-home, high-speed and national broadband plans: Tales from Down Under," Telecommunications Policy, Elsevier, vol. 38(8), pages 715-729.
    26. Kongaut, Chatchai & Bohlin, Erik, 2014. "Unbundling and infrastructure competition for broadband adoption: Implications for NGA regulation," Telecommunications Policy, Elsevier, vol. 38(8), pages 760-770.
    27. Balmer, Roberto E., 2015. "Cooperative investment in next generation broadband networks: A review of recent practical cases and literature," 26th European Regional ITS Conference, Madrid 2015 127124, International Telecommunications Society (ITS).
    28. Grubesic, Tony H., 2010. "Efficiency in broadband service provision: A spatial analysis," Telecommunications Policy, Elsevier, vol. 34(3), pages 117-131, April.
    29. David Flacher & Hugues Jennequin, 2014. "Access regulation and geographic deployment of a new generation infrastructure," Post-Print hal-02391280, HAL.
    30. Reggi, Luigi & Scicchitano, Sergio, 2014. "Are EU regional digital strategies evidence-based? An analysis of the allocation of 2007–13 Structural Funds," Telecommunications Policy, Elsevier, vol. 38(5), pages 530-538.
    31. Gerpott, Torsten J. & Ahmadi, Nima, 2015. "Advancement of indices assessing a nation׳s telecommunications development status: A PLS structural equation analysis of over 100 countries," Telecommunications Policy, Elsevier, vol. 39(2), pages 93-111.
    32. Holt, Lynne & Galligan, Mary, 2013. "Mapping the field: Retrospective of the federal universal service programs," Telecommunications Policy, Elsevier, vol. 37(9), pages 773-793.
    33. Ragoobar, Tricia & Whalley, Jason & Harle, David, 2011. "Public and private intervention for next-generation access deployment: Possibilities for three European countries," Telecommunications Policy, Elsevier, vol. 35(9), pages 827-841.
    34. Alleman, James & Rappoport, Paul & Banerjee, Aniruddha, 0. "Universal service: A new definition?," Telecommunications Policy, Elsevier, vol. 34(1-2), pages 86-91, February.
    35. Orada TEPPAYAYON & Erik BOHLIN, 2010. "Broadband universal service in Europe:A review of policy consultations 2005-2010," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(80), pages 21-42, 4th quart.
    36. Clarke, Richard N., 2014. "Expanding mobile wireless capacity: The challenges presented by technology and economics," Telecommunications Policy, Elsevier, vol. 38(8), pages 693-708.
    37. Peronard, Jean-Paul & Just, Flemming, 2011. "User motivation for broadband: A rural Danish study," Telecommunications Policy, Elsevier, vol. 35(8), pages 691-701, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Feijóo, Claudio & Ramos, Sergio & Armuña, Cristina & Arenal, Alberto & Gómez-Barroso, José-Luis, 2018. "A study on the deployment of high-speed broadband networks in NUTS3 regions within the framework of digital agenda for Europe," Telecommunications Policy, Elsevier, vol. 42(9), pages 682-699.
    2. Ioannou, Nikos & Katsianis, Dimitris & Varoutas, Dimitris, 2020. "Comparative techno-economic evaluation of LTE fixed wireless access, FTTdp G.fast and FTTC VDSL network deployment for providing 30 Mbps broadband services in rural areas," Telecommunications Policy, Elsevier, vol. 44(3).
    3. Chiha, Asma & Van der Wee, Marlies & Colle, Didier & Verbrugge, Sofie, 2020. "Techno-economic viability of integrating satellite communication in 4G networks to bridge the broadband digital divide," Telecommunications Policy, Elsevier, vol. 44(3).
    4. Ioannou, Nikos & Katsianis, Dimitris & Varoutas, Dimitris, 2018. "Comparative Techno-Economic Evaluation of LTE Fixed Wireless Access and FTTdp G.fast network deployment for providing broadband services of at least 30Mbps in rural areas," 29th European Regional ITS Conference, Trento 2018 184946, International Telecommunications Society (ITS).
    5. Ferrandis, Jesús & Feijóo, Claudio & Ramos, Sergio, 2020. "The investment gap for the deployment of high-speed broadband in NUTS3 regions," ITS Conference, Online Event 2020 224854, International Telecommunications Society (ITS).
    6. Lee, Hyeongjik & Jeong, Seonkoo & Lee, Kwanghee, 2023. "The South Korean case of deploying rural broadband via fiber networks by implementing universal service obligation and public-private partnership based project," Telecommunications Policy, Elsevier, vol. 47(3).
    7. Oughton, Edward J. & Amaglobeli, David & Moszoro, Marian, 2023. "What would it cost to connect the unconnected? Estimating global universal broadband infrastructure investment," Telecommunications Policy, Elsevier, vol. 47(10).
    8. Zhang, Qian & Webster, Natasha A. & Han, Shengnan & Ayele, Workneh Yilma, 2023. "Contextualizing the rural in digital studies: A computational literature review of rural-digital relations," Technology in Society, Elsevier, vol. 75(C).
    9. Gerli, Paolo & Whalley, Jason, 2021. "Fibre to the countryside: A comparison of public and community initiatives tackling the rural digital divide in the UK," Telecommunications Policy, Elsevier, vol. 45(10).
    10. Whitacre, Brian & Biedny, Christina, 2022. "A preview of the broadband fabric: Opportunities and issues for researchers and policymakers," Telecommunications Policy, Elsevier, vol. 46(3).
    11. Lee, Hyeongjik & Jeong, Seonkoo & Lee, Kwanghee, 2020. "Developing the Method for Estimating the Costs of Providing Broadband Universal Service: Korean Case," ITS Conference, Online Event 2020 224865, International Telecommunications Society (ITS).
    12. Ferrandis, Jesús & Ramos, Sergio & Feijóo, Claudio, 2021. "An assessment of estimation models and investment gaps for the deployment of high-speed broadband networks in NUTS3 regions to meet the objectives of the European Gigabit Society," Telecommunications Policy, Elsevier, vol. 45(7).
    13. Schmit, Todd M. & Severson, Roberta M., 2021. "Exploring the feasibility of rural broadband cooperatives in the United States: The new New Deal?," Telecommunications Policy, Elsevier, vol. 45(4).
    14. Quaglione, Davide & Matteucci, Nicola & Furia, Donatella & Marra, Alessandro & Pozzi, Cesare, 2020. "Are mobile and fixed broadband substitutes or complements? New empirical evidence from Italy and implications for the digital divide policies," Socio-Economic Planning Sciences, Elsevier, vol. 71(C).
    15. Lelie, T. & Sadowski, B. & Brennenreadts, R. & Smits, J., 2017. "Government involvement and learning in business model experimentation: NGA deployment in rural areas in the Netherlands," 28th European Regional ITS Conference, Passau 2017 169479, International Telecommunications Society (ITS).
    16. Baischew, Dajan & Schrade-Grytsenko, Lisa & Sörries, Bernd & Stronzik, Marcus & Wissner, Matthias, 2022. "Ausgewählte Informations- und Kommunikationstechnologien und ihre Auswirkungen auf umweltpolitische Ziele," WIK Discussion Papers 492, WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH.
    17. Gerli, Paolo & Wainwright, David & Whalley, Jason, 2017. "Infrastructure investment on the margins of the market: The role of niche infrastructure providers in the UK," Telecommunications Policy, Elsevier, vol. 41(9), pages 743-756.
    18. Kubata, K. & Šimek, P., 2016. "Identification of Business Informatics Specifics in Agricultural Enterprises," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 8(3), pages 1-8, September.
    19. Gerli, Paolo & Whalley, Jason, 2016. "Infrastructure investment on the margins of the market: The role of niche infrastructure providers in the UK," 27th European Regional ITS Conference, Cambridge (UK) 2016 148671, International Telecommunications Society (ITS).
    20. Lee, Hyeongjik & Jeong, Seonkoo & Lee, Kwanghee, 2021. "Estimating the deployment costs of broadband universal service via fiber networks in Korea," Telecommunications Policy, Elsevier, vol. 45(4).
    21. Gerli, Paolo & Whalley, Jason, 2018. "Fibre to the countryside: A comparison of public and community initiatives in the UK," 29th European Regional ITS Conference, Trento 2018 184941, International Telecommunications Society (ITS).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Briglauer Wolfgang & Frübing Stefan & Vogelsang Ingo, 2014. "The Impact of Alternative Public Policies on the Deployment of New Communications Infrastructure – A Survey," Review of Network Economics, De Gruyter, vol. 13(3), pages 227-270, September.
    2. Abrardi, Laura & Cambini, Carlo, 2019. "Ultra-fast broadband investment and adoption: A survey," Telecommunications Policy, Elsevier, vol. 43(3), pages 183-198.
    3. Levin, Stanford L. & Schmidt, Stephen, 2015. "Policies to Facilitate FTTP Deployment," 26th European Regional ITS Conference, Madrid 2015 127158, International Telecommunications Society (ITS).
    4. Jaume Benseny & Juuso Toyli & Heikki Hammainen & Andr'es Arcia-Moret, 2019. "The mitigating role of regulation on the concentric patterns of broadband diffusion. The case of Finland," Papers 1905.03002, arXiv.org, revised Oct 2020.
    5. Francisco José García Paramio & Isabel Torre Díez & Beatriz Sainz de Abajo & Miguel López-Coronado Sánchez-Fortún & Joel J. P. C. Rodrigues, 2017. "How does the Spanish regulation of NGN affect to final users? Effects on the deployment of new FTTH infrastructures," Telecommunication Systems: Modelling, Analysis, Design and Management, Springer, vol. 64(2), pages 391-415, February.
    6. Francisco José García Paramio & Beatriz Sainz de Abajo & Isabel Torre Díez & Manuel Pérez Maluenda & Camino Fernández Llamas & Miguel López-Coronado Sánchez-Fortún & Joel J. P. C. Rodrigues, 2018. "Implications of the regulation in the implantation process of next generation networks in Spain: analysis in rural versus urban regions," Telecommunication Systems: Modelling, Analysis, Design and Management, Springer, vol. 69(1), pages 39-50, September.
    7. Tselekounis, Markos & Varoutas, Dimitris & Martakos, Drakoulis, 2014. "A CDS approach to induce facilities-based competition over NGA networks," Telecommunications Policy, Elsevier, vol. 38(3), pages 311-331.
    8. Liu, Chun, 2017. "An evaluation of China's evolving broadband policy: An ecosystem’s perspective," Telecommunications Policy, Elsevier, vol. 41(1), pages 1-11.
    9. Matteucci, Nicola, 2019. "The EU State aid policy for broadband: An evaluation of the Italian experience with first generation networks," Telecommunications Policy, Elsevier, vol. 43(9).
    10. Gerli, Paolo & Van der Wee, Marlies & Verbrugge, Sofie & Whalley, Jason, 2018. "The involvement of utilities in the development of broadband infrastructure: A comparison of EU case studies," Telecommunications Policy, Elsevier, vol. 42(9), pages 726-743.
    11. Rana, Md Sohel & Prasad, Rohit & Yoon, Hyenyoung & Hwang, Junseok, 2020. "Opportunity cost of spectrum for mobile communications: Evaluation of spectrum prices in Bangladesh," Telecommunications Policy, Elsevier, vol. 44(3).
    12. Lee, Hyeongjik & Jeong, Seonkoo & Lee, Kwanghee, 2021. "Estimating the deployment costs of broadband universal service via fiber networks in Korea," Telecommunications Policy, Elsevier, vol. 45(4).
    13. Binsfeld, Nico & Whalley, Jason & Pugalis, Lee, 2016. "Competing against yourself: State duopoly in the Luxembourg telecommunications industry," Telecommunications Policy, Elsevier, vol. 40(8), pages 791-803.
    14. Feijóo, Claudio & Ramos, Sergio & Armuña, Cristina & Arenal, Alberto & Gómez-Barroso, José-Luis, 2018. "A study on the deployment of high-speed broadband networks in NUTS3 regions within the framework of digital agenda for Europe," Telecommunications Policy, Elsevier, vol. 42(9), pages 682-699.
    15. Quaglione, Davide & Matteucci, Nicola & Furia, Donatella & Marra, Alessandro & Pozzi, Cesare, 2020. "Are mobile and fixed broadband substitutes or complements? New empirical evidence from Italy and implications for the digital divide policies," Socio-Economic Planning Sciences, Elsevier, vol. 71(C).
    16. Mirjam R. J. Lange, 2017. "Tariff diversity and competition policy: drivers for broadband adoption in the European Union," Journal of Regulatory Economics, Springer, vol. 52(3), pages 285-312, December.
    17. Idongesit WILLIAMS & Daniel M. O. ADJIN & Kenneth K. TSIVOR, 2013. "The Impact of PPIs in the Development of Broadband and the Way Forward: Ghana's Case," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(91), pages 81-102, 3rd quart.
    18. Brito, Duarte & Tselekounis, Markos, 2016. "Access regulation and the entrant's mode of entry under multi-product competition in telecoms," Information Economics and Policy, Elsevier, vol. 37(C), pages 20-33.
    19. Gerli, Paolo & Whalley, Jason, 2016. "Infrastructure investment on the margins of the market: The role of niche infrastructure providers in the UK," 27th European Regional ITS Conference, Cambridge (UK) 2016 148671, International Telecommunications Society (ITS).
    20. Neokosmidis, Ioannis & Avaritsiotis, Nikolaos & Ventoura, Zoe & Varoutas, Dimitris, 2015. "Assessment of the gap and (non-)Internet users evolution based on population biology dynamics," Telecommunications Policy, Elsevier, vol. 39(1), pages 14-37.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:telpol:v:40:y:2016:i:8:p:755-773. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/30471/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.