Does FTTH really worth a subsidy?

Posted on December 5, 2010 / 1 Comments

Governments are subsidizing millions and billions of dollars for the deployment of fiber up to the home, aka, FTTH. Such subsidies are based on the premise that fiber to the home brings substantial externalities. But Charles Kenny and his brother Robert Kenny claim that basic broadband has contributed significantly to economic growth is decidedly mixed, and points to low returns for (expensive) superfast upgrades. They think fiber to the businesses and government outfits make more sense than FTTH. The Kenny brothers accuse that the benefits of fiber have been considerably overstated while the other infrastructure remains ignored. Therefore, they have urged the governments to strongly reconsider subsidizing the FTTH initiatives. Read the report and the debate here.

1 Comment

Raqueeb Hassan
December 6, 2010, 9:33 am
Thank you for heating up the debate.

Well, why not?

Paying for transit shouldn’t be business anymore. The government should blow up the connectivity, put all service delivery(s) on net. Paying for connectivity will extinct as charging mechanism on contents is in place and there the net neutrality comes in.

As Macquarie Telecom reported,

Asked whether they expected the NBN to enable them to do business differently, responses varied
markedly by vertical; 80% of respondents from the utilities sector said yes, as opposed to less than 40% in
the transport, postal and warehousing vertical, and around 50% in mining and financial services.

Governments dealing with NBNs will be credited for drawing up the big picture. It’s long drawn process, true! Connect homes, cost will be reduced drastically when citizens will know – for every problem, where to turn to?

A single citizen portal, with a reliable connectivity of fiber.