NETWORK DEVELOPMENTS IN SUPPORT OF INNOVATION AND USER NEEDS

This report makes a case for investment in a competitive, open-access national fibre-to-the-home network rollout based on potential spillovers in four key sectors of the economy: electricity, health, transportation and education. 

This research offers a new approach to evaluating the costs of building the most forward-looking network possible by evaluating what short-term cost savings (benefits) would have to be achieved in other key economic sectors to justify the investment. On average, a cost savings of between 0.5% and 1.5% in each of the four sectors over ten years resulting directly from the new broadband network platform could justify the cost of building a national point-to-point, fibre-to-the-home network.

If the cost savings in these and other industries are potentially large enough to justify the investments then governments have an incentive to find ways to encourage rollouts to capture the social gains. While the calculations in the paper are rough estimations they clearly highlight the fact that investments in fibre networks can be justified relatively easily through minimal cost savings in other sectors even when the savings are often discounted in investment calculations by private firms.