Who wins digs – VisionConsult’s analysis of the planned wireless broadband provision to rural areas

DSLAM is the future

An analysis by VisionConsult international has revealed that the expansion of the nationwide high-speed data highways could be the third big economic stimulus package, as an entirely new industry would emerge. In the 1980’s, the Cable TV deployment in Germany meant the country’s birth of a private broadcasting and a large media economy, in the 1990’s the telecommunications market liberalization was at the origin of a mobile industry and a prosperous telecommunications economy. It is foreseeable that a nationwide broadband infrastructure creates a momentum catapulting German media and Internet companies to the bleeding edge of the development worldwide; thousands of jobs could be created.

Obligate the beneficiaries of the broadband upgrade.

However, to reach this objective, VisionConsult sees the need for a technical upgrade with closely targeted investments, together with an asymmetric regulation. It also requires obligating cities and municipalities, as well as private households: “Why should the beneficiaries of the upgrade not be obligated? Although the connection to e.g. the natural gas network is partially subsidized, it nevertheless is not free for the homeowner,” said Jean-Claude Bisenius, spokesman for VisionConsult. “I can still remember well, a TV cable connection in the 80s costing a one-time setup fee from DM 600 to DM 1,200 (from US $690 to $1,380 in today’s money). The solution lies in public-private partnerships and individual initiatives.”

High-speed Internet coverage of households is via wirebound networks.

The analysis of VisionConsult also came to the conclusion that a supply of households, i.e. stationary access points with Wi-Fi, WiMAX, UMTS, or satellite represents only a basic access to the broadband network, and thus achieves only the first stage the objective. VisionConsult estimates the development of truly broadband networks with up to 50 Mbit/s for the masses to be only possible wirebound.

The battle for the “Digital Dividend” leads into the wrong direction.

Above all, the current discussion about the “Digital Dividend”, i.e. the fight for a portion of the UHF frequencies available for DSL service area leads into the wrong direction, according to the analysis. Since only a relatively small frequency range is available, and the bandwidth requirements of households are growing, the supply for stationary broadband applications via UMTS (3G) standard and its successor LTE (4G) would only be the famous “drop in the ocean.” In each village a wideband radio transmitting infrastructure would have to be deployed; building instead new landline routes would be cheaper! Moreover, the use of wireless technology for stationary broadband would also mean wasting scarce radio spectrum immensely valuable to mobile applications.

The future of DSL: DSLAM.

Today the broadband penetration of metropolitan areas is solved technically and economically. A regulatory framework is being found. The supply outside of metropolitan areas will only be possible if the long subscriber lines to the local exchange will be bridged, e.g. by using the DSLAM technology. In simple terms DSLAM brings the DSL modem of the local exchange closer to the subscriber and thus enable substantially higher speeds on the subscriber line.

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