Nomadicity and the evolution of applications, networks and policy

2017-05-01T03:48:39Z (GMT) by Williamson, Brian
A number of behavioural observations point to a preference and willingness to pay for communications technologies that support mobile and nomadic use. This paper considers these observations and the implications for the evolution of mobile and fixed networks. It then considers whether there are wider external social benefits and the possible implications for public policy.Mobile and fixed are both substitutes and complements. Consumers with low bandwidth and, in particular, low capacity (gigabytes per month) requirements may opt for mobile broadband only. Consumers with low bandwidth and high capacity requirements might choose to meet their need for capacity with copper, complemented by wireless. Demand for fibre may be more limited. To meet demand for mobile bandwidth and capacity, fibre can be run to mobile base stations, but this only requires a network of around 1/2000th the density in terms of points of connection of a fibre to the home network. Demand for fibre to the home is limited to those who are willing to pay for high bandwidth and capacity.Some key questions addressed in this paper include whether external social benefits arise from mobile and fixed network access, whether the incremental external social gains from a move from current to next generation networks are material and whether they are likely to differ between mobile and fixed networks. We conclude that such gains are likely to be significantly larger for mobile than for fixed networks since wide area coverage and smart mobile devices can support applications that fixed cannot, mobile is likely to contribute more to getting the final third of the population online and spectrum reallocation would result in gains from trade that are not privately appropriable since spectrum utilised for broadcasting is generally non-tradable. These questions have a direct implication for policy decisions: priority should be given to spectrum reallocation for mobile use (including public expenditure as required) and removal of barriers to commercial investment in fibre, including possible regulatory barriers to copper network retirement and price differentiation for wholesale fibre access. Copyright 2010 Brian Williamson. No part of this article may be reproduced by any means without the written consent of the publisher.