This week, I attended the International Telecom Society’s regional meeting (0) for Europe at the European University Institute School of Regulation (1) in Fiesole, just outside Florence, Italy. While few would turn down the opportunity to enjoy the Tuscan countryside in autumn, there were other things on the minds of the academics, regulators, providers, and policymakers in attendance than “dulce far niente,” the sweetness of doing nothing. Indeed, some 30 percent of Italians do not use the Internet at all; they don’t have the digital literacy skills. In Italy, broadband is even more of an issue of education than deployment.
A recently published map (2) of Europe highlights some of the challenges of broadband in Europe. It reviews the main broadband technologies (DSL, VDSL, FTTP, Cable, LTE) and their coverage for over 3,000 urban, semi-rural and rural areas across 31 European countries. The data shows that that the continent varies widely in broadband availability. While basic DSL is available to over 90 percent of Europeans, much of Ireland, France, Italy, Greece, former Eastern bloc countries, and even parts of Germany don’t have access to high speed internet of at least 24 Mbps or an LTE service.
To be sure, there are standouts such as Portugal, the Benelux, the Baltics, and the Nordics, but these regions have the lesser part of the population in Europe. Connecting the continent, including the largest countries, is one of the primary goals of the EU Commission.
It is interesting to compare the EU map to the US. See the following generated from from the National Broadband Map (3) (with apologies for not including Alaska and Hawaii). Some 95 percent of Americans have access to high speed broadband from multiple networks, and for the mountainous areas of the Sierras, Rockies, and Appalachia, satellite broadband is available (not shown), as it is to 99 percent of Americans. For a comprehensive list, see the report on providers by speed tiers (4). Furthermore four American carriers are in progress with nationwide LTE networks. This is the envy of Europe.
After seeing many fiber to the premises (FttP) projects as not cost effective and failing to meet the accessibility and usability needs of users (many users value mobility above speed), many Europeans are looking to LTE as the high speed broadband solution for Europe.
Denmark, which perennially finds itself among the top countries of OECD rankings when it comes to broadband speed, adoption, performance, and price, provides a valuable example for policy makers. Professors at my institute, the Center for Communication, Media and Information Studies at Aalborg University (6), have studied this issue in depth, and presented at the ITS Florence conference. They conclude that some 65 percent of Denmark’s population has access to ultra-fast broadband, but less than 0.7 percent subscribe to the 100 Mbps service. In 2005, some 14 utility companies in Denmark brought fiber to the homes of their customers, but only a fraction subscribe to the highest speed.
Today, these utility companies have only 250,000 broadband customers combined, and most subscribe to the tier below because it satisfies their needs and budget. Meanwhile LTE networks have been rolled out by operators Telia and Telenor. Already 7 percent (350,000) of Danes use 3G/4G as their primary broadband connection, surpassing fiber customers by 100,000.
These findings are detailed in a report called Broadband Bandwidths in a 2020 Perspective (7), sponsored by TDC. Based upon current and project applications, speeds, and capacities, my colleagues (an engineer, an economist and a policy expert) built models for what kind bandwidth households and small-medium businesses will need in 2020. Given a strongly held belief by some that FttP is essential for the future, it is a good idea to review the numbers. Key uses are file transfer, streaming video and tele-work.
For residential uses, the model suggests that 40-130 Mbps down/10 Mbps up can satisfy a family of 4 heavy users. For a family with medium needs, 30-70 Mbps/10 Mbps is sufficient. A typical senior couple would be served by 20 – 100 Mbps/10 Mbps. As for small and medium businesses, for example an E-learning provider would need 100 Mbps symmetrical while an architectural firm would need over 100 Mbps. The point is that today’s technologies and their availability more than satisfy today’s uses. As long as operators deliver the speeds that are needed just in time, customers are served. There is little social or business benefit to build capacity for more or before than it is needed.
The second part of the analysis was to look at the evolution and projection of data compression technologies. This provides insight for how today’s networks may be able to deliver even more data across slower speeds because of improvements in data compression. The following diagram shows how limited bandwidth can accommodate even more data with technological improvement.
Essentially data that needed 30 Mbps before can now be delivered with less than 5 Mbps. This is one of the reasons why subscribers with 5 – 10 Mbps are adequately covered (9) for today’s most popular application, Netflix in high definition. Indeed over time Netflix will continue to improve its service making it ever more efficient even for lower bandwidth connections.
It is interesting to note that all of Denmark’s telecommunication infrastructure is provided by private investment. Unlike next door Sweden where municipalities made the investment in fiber and citizens are on the hook when fiber projects don’t work out, in Denmark only investors bear the risk.
Americans, just 4% of the world’s population, are well served by carriers that invest in broadband deployment at an annual rate equal to one-fourth of the world’s entire broadband investment. The EU has a population more than twice that of the USA but has broadband investments of less than 25 cents for every dollar invested in America. This is one one of many reasons the EU has a broadband challenge.
Read the other parts of this series here (10) .