How to resolve the rural broadband dilemma

21 Feb 2012

It is ideal, even necessary, that the bulk of rural dwellers and businesses have access to a reasonable broadband service (Analysis: Is the government’s fast broadband delivery strategy starting to fall apart?). The inescapable problem is the long-term operational financing should users decide the cost is too high, albeit that when broadband becomes available in a rural area it is probable that dial-up service will be discontinued.

While it may be acceptable that some funding from taxpayers is provided to support the installation of fibre, much of the cost must be from the operating company who will, if successful, recoup their capital expenditure through charges.

But will the recouped income be sufficient to cover the outlay and repay the banks who fund it without pricing the service out of reach? That is the dilemma we face.

Here is where the government funding should be better used to provide a low interest loan to back the fibre installation. Meanwhile, there will always be isolated individuals and groups that will be beyond the economic reach of fibre services, and who will therefore need to fund their own satellite service.

At no time should any public funding, from national or local sources, be used to subsidise or support operating costs.


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