Broadband survey 2007 - PTS-ER-2008:5
21/02/2008
This report describes a survey of areas where people live and work and having or lacking basic prerequisites for access to IT infrastructure with a high transmission capacity, commonly known as broadband. The report also includes an assessment of developments until the year 2010. In this context, 'broadband' refers to connections that, at least at an access-line level, can be upgraded to transmission rates of a minimum of 2 Mbits per second downstream. However, having basic prerequisites for access to broadband infrastructure is not the same as actually having access to broadband. The latter means that a user must have a connection to a network with high transmission capacity (which may require initiatives such as excavation work or the installation of equipment) and can obtain a subscription from a service provider (which assumes that the service provider has the capacity to take on another customer). Thus, it is important to emphasise that people living or working in an area that currently has broadband infrastructure nevertheless cannot always be offered a broadband subscription.
According to the National Post and Telecom Agency (PTS) report entitled 'Proposed broadband strategy for Sweden', it was estimated in January 2007 that 136 000 households and businesses did not have access to established or planned wired broadband infrastructure. Today, the corresponding figure – estimated with the same method used in the broadband strategy – is approximately 106 000 households and businesses; in other words, 30 000 fewer lacking such infrastructure.
However, this report takes into account a number of barriers in the wired networks that impede access to broadband access lines and which were not taken into account in the broadband strategy. Given these barriers, we observed that approximately 146 000 households and workplaces are located in areas without the basic prerequisites needed for access to wired broadband. An estimated 16 000 of these are located in areas which, according to the geographical survey, indeed appear to have basic prerequisites for broadband via wired networks, but which in practice do not have it due to a barrier known as 'carrier frequency'.9 Areas without basic prerequisites for access to wired broadband are usually located outside urban areas and small communities, and are more or less evenly distributed across the country. A total of just under two million households and workplaces lack the basic prerequisites for receiving wired broadband via an access technology other than xDSL.
Limitations associated with wired networks include, for example, technical barriers such as pair gain equipment, and long wires may prevent individuals from having access to wired broadband. Other barriers include the high cost of fibre connections to properties and the fact that new copper and coaxial cables are hardly being rolled out.
In total, approximately 144 000 households and workplaces only have basic prerequisites for access to wireless broadband. Just under 36 000 of these have basic prerequisites for access to both HSPA and CDMA 2000; others may have to settle for CDMA 2000.
Wireless networks are also associated with a number of limitations; for example, reduced capacity when there are large volumes of traffic or great distances between base stations and users, and problems with propagation shadow and limited frequency space.
In this context, it is important to emphasise the consequences of these limitations in both wired and wireless infrastructure for every person whose household is located outside urban areas and small communities. Broadband is now a service that is just as important as telephony and postal services, and the above-mentioned limitations prevent people from having access to broadband. In many cases, we cannot expect the market to resolve these limitations; here, there is a need for a government initiative.
In light of the results of the survey, PTS estimates that approximately 2 300 households and workplaces are located in areas that completely lack basic prerequisites for access to both wired and wireless broadband. An estimated 200 of these are located in areas which, according to the geographical survey, are indeed deemed to have basic prerequisites for access to broadband, but which in practice do not, mainly as a result of carrier frequency but also due to propagation shadow. Most people who do not have basic prerequisites for broadband live and work outside urban areas and small communities in the municipalities of Krokom, Vilhelmina and Åre.
The analysis of the survey also shows that an estimated 108 000 households and workplaces only have basic prerequisites for access to broadband via the wireless access technology CDMA 2000. These are also mainly located outside urban areas and small communities. The coverage of the CDMA 2000 network in areas where there is a lack of other established IT infrastructure clearly illustrates the importance of the present rollout of a well-functioning network in the 450 MHz band in order to achieve the objective of access to broadband in all parts of the country.
Besides the problems generally associated with wireless networks, the CDMA 2000 network is also associated with market uncertainty as well as uncertainty in conjunction with a lawsuit concerning frequency allocation.
Once again, a government initiative is needed in order to effectively deal with the challenge of providing everyone with access to broadband. The areas being considered for a government initiative should not only encompass those households and businesses that in reality have insufficient prerequisites to receive broadband due to different types of barriers and limitations, but also the households and businesses that completely lack basic prerequisites for access to broadband. The areas that should primarily be considered for a government initiative are locations outside urban areas and small communities. A government initiative that entails solutions adapted to local conditions should be deemed fit for purpose, among other things since the need for different types of solution, and the problems preventing access to broadband, often vary and are local in nature. One possibility that can be emphasised in this connection is that 'functional access' to the Internet could be redefined and 'upgraded' to a capacity which is more in line with the current capacity possessed by the majority of the Swedish population. This also connects to what is stated about citizens being able to reach important functions in society in the Governments recent actionplan about egovernance. 10 The Swedish Government takes decisions about functional access to the Internet, which involves giving consumers a connection that enables data transmission at a rate permitting access to the Internet. Currently, the above-mentioned rate is 20 kbits per second. Official Government Report SOU 2002:60 (p.623) establishes that a new assessment of the meaning of functional access should be carried out on a regular basis in light of technological progress in the area.
It is also important in this connection to emphasise the need for a new model for the equal treatment of service providers requiring access to TeliaSonera's fixed access networks so that they are able to offer broadband services. On 19 April, PTS was assigned by the Government to, among other things, investigate the prerequisites for and propose the wording of legislation for the separation of a vertically integrated service provider. The final report was presented on 15 June.11 The problems in terms of access described by PTS in both of the reports 'Proposed broadband strategy for Sweden'12 and 'Better broadband competition through functional separation'13 still remain. The new tool is thus an important addition to the toolbox needed by PTS to establish an improved broadband market that functions more independently.
Besides the basic prerequisites for access to broadband, our report also discusses areas having the basic prerequisites for being offered various access technologies.14 The survey shows that 80 per cent of the population have the basic prerequisites for access to at least three access technologies, and just over 20 per cent to xDSL, cable television and fibre LAN as well as HSPA and CDMA 2000. Most of these people live in urban areas. Nearly 1.5 per cent of the population only have the basic prerequisites for access to one access technology. Ninety-five per cent of this group live outside urban areas, and in most cases CDMA 2000 is the only access technology that matches their basic prerequisites for broadband access. The introduction of Turbo 3G has resulted in improved basic prerequisites so that access technologies and services providers can be offered both within and outside urban areas. However, the basic prerequisites for being offered access technologies are limited for many people living in areas without HSPA and where xDSL is only offered by one service provider. These areas are often located outside urban areas. Up until 2010 a large proportion of the Swedish population is likely to have access to several types of broadband access line and it is probable that these networks will have greater demands placed on them. At the same time, however, it is very likely that it will be difficult for service providers to roll out and upgrade IT infrastructure with a high transmission capacity in areas with few users purely on commercial terms. For this reason, there is a risk that urban areas and locations outside urban areas will experience an even greater disparity between access and the level of quality. For example, during this period, access to high definition IPTV will probably increase more in urban areas as it requires high transmission capacity. Certain categories of user outside urban areas and small communities, such as small businesses, may also depend on high capacity both upand downstream in order to run their operations, which places greater demands on infrastructure. Good coverage and high bandwidth outside urban areas at a relatively reasonable investment cost could, for example, be achieved if the 800 MHz band can start to be used for wireless data communications. According to a Government decision in December 2007, this is to be released from being used for terrestrial television. Good capacity in core and regional networks are also fundamental to meet the excpected rise in demand for higher bandwidths and to ensure a future-proof IT infrastructure. In some parts of the country the development of these fiber networks may occur on commercial terms, on the other hand they are not likely to be developed by the market in other parts of the country.