The Cost of Ubiquity: Universal Service Does not Have to be Universal
Forced Evolution Is Not the Answer
The perceived necessity of network connectivity means that communications infrastructure will likely become more – not less – regulated in the future. The plus side of regulation is that coverage becomes ubiquitous and everyone has access to the same services at the same cost. The downside is that ubiquity dictates a “lowest common denominator” approach. If service offered on a remote island or mountaintop is, by law, the same as mid-town; the result is that the service in mid-town won’t be very good. Innovations that could be profitably installed in mid-town are cost prohibitive everywhere else and so nobody gets an upgrade. That’s not what we want either and that’s why most nations ended the reign of monopoly network operators.
Nationalized networks present the same risk. National broadband networks deliver ubiquitous coverage, but that approach could also stifle innovation. What is empowering today – 10G everywhere, mobile broadband, fiber – might not be enough tomorrow and then what? If the infrastructure is amortized over 20 years and is antiquated in 10, will countries reinvest or will they wait? There is no incentive or business argument to upgrade and no competition to force the issue. The alternative is evolution. Early adoption of innovation is expensive so population density is important to realize even a break-even return on investment. Once proven, however; innovation becomes best practice, widely available, and costs go down. At that point, a business case can be made to deliver any feature, function, product, or service profitably anywhere.
Local providers can and are innovating to profitably meet demand for higher capacity, higher speeds, and greater access to products and services from remote or rural locations. Innovation in densely populated markets leads to evolution in small and remote markets. Customers everywhere are demanding connectivity and capacity and capability is being delivered consistent with the unique needs and constraints of each locale. It might cost more or take longer to deploy, but it will happen. When the only demand is regulatory, there is no incentive to innovate or push your vendors to come up with alternatives to large, public network architectures. Subsidizing the cost to build the network and regulating tariffs lead to immediate gains, but in the end, evolution is the only way to profitably move forward.
Universal service is intended to deliver the same types of innovation to everybody, everywhere. The unintended consequences are that innovation is either stifled or bypassed completely and those best suited to develop local innovation don’t. Demand will drive remote access and businesses that operate in remote locations will always look for more cost-effective ways to operate which continues to drive demand for better solutions in remote areas. Forcing the issue won’t get the job done. For now, users in really remote locations will pay more and most don’t expect any special treatment.
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