Broadband expansion: a funding model

First, it was “regulatory holiday”, then the broadband AG and now enters the renowned Institute for Infrastructure and Communication Services in Bonn with a funding model for the expansion of broadband to the public. Every cell phone and landline customer should according to the proposal, shell out 1 euro more, as a sort of special levy broadband“broadband deployment.”

So shall the highly politically ambitious goals of universal coverage with fast 50-Megabitt connections are achieved. The reasons for the lack of private investment in broadband expansion are simple. It simply lack the willingness to pay of consumers, especially outside the major population centres. After the simple multiplication of the economy needed to be given for political intervention reasons for market failure.

This may be based on economically relevant positive externalities, i.e. benefits of telecommunications structure, beyond the private benefit. There are robust evidence for this it is not implemented.With the privatization of the telecommunications sector, we have adopted from the state pension plan for good reasons. Just as the market quickly became clear that the user desires more than four colours for his phone is now clear that (yet), there is no demand for a broadband Internet coverage.

Before flowing scarce tax dollars in a big way in the realization of “Turbo Dreams”, the citizens should be asked for self-initiative.Here is another post on this issue.broadband The demand anyway. However, the offer price is too high. That is the problem. Satellite as an alternative? Surely not. Probably the state must intervene; otherwise, the rural exodus is encouraged.

This applies to local companies, self-employed and of course for the attractiveness of a community in construction areas, etc. The market will not regulate itself here because there are too few players! The cost of basic research were enormous and were supported by States. Perhaps creating a state intervention is not the optimal allocation of resources. This creates a market.

Therefore, in the end the question is whether it is beneficial to the company, or not. The quality of these links is a bit questionable. However, by introducing many new markets can talk about opportunities increase.