Page 46 - Trends in Telecommunication Reform 2016

Box 1.12: Key lessons: Facebook/Asia–Pacific Gateway (APG)
• Facebook’s investment was the key enabler from a financing perspective. Notably, a
number of high-profile global operators (and co-investors) will use the undersea cable
and, as a result, are likely to direct international traffic onto it, contributing to its growth.

• The APG will use an open-access model to ensure all end users are able to utilize the
asset without discrimination. This will be difficult to regulate, due to the multiple
jurisdictions that the cable will run through. Success of the “self-regulated” system will
depend on cooperation among the operators themselves.

• Although governments and regulators in Asian countries did not play a prominent role in
the formation of the APG, they will still play an essential role within countries to extend
broadband penetration and to drive user demand.

Time dotCom (Global Transit), Viettel, and Vietnam mortgaged to make it more affordable. Another
Posts and Telecommunications Group (VNPT). alternative is to use crowdfunding (discussed
The total investment from the 12 members of in more detail in Section 6) to raise funds. This
the consortium was USD 450 million (Facebook’s approach is more common in markets with
investment amount has not been disclosed). high disposable incomes. According to a report
published by the Plunkett Foundation, the cost
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The APG cable is expected to be completed in of rolling out fibre can be GBP 2 000 (USD 3 138)
2016 . The intervention of regulators is unlikely, per property, using overhead cables, and higher if
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but consortium members likely will have equal it requires digging trenches.
access to broadband capacity.
Self-build community broadband networks
normally are based on FTTH technology.
1.5.4 Not-for-profit investors Communities can build these networks at a much
lower cost than commercial operators can, as they
In this context, the term not-for-profit investors do not charge commercial rates for undertaking
refers to socially responsible entities (for example, the work or may offer to do it free of charge.
a cooperative) that invest in the construction and Depending on the size of the community, a self-
operation of broadband networks that are – for build network can be small in scale, and it may
the most part – separate from the networks of need to overcome a couple of challenges:
commercial service providers.
• it may be run by volunteers, creating an
Commercial operators are more likely to require unsustainable situation in the long term; or
greater returns on their investment. By contrast,
a not-for-profit investor is more likely to invest its • it may not be vertically integrated and
profits (clearly depending on the agreement of therefore may not be able to offer consumers
the legal entity) back into the construction and the choice of services that larger commercial
operation of the broadband network. For this operators may be able to offer.
reason, not-for-profit broadband investments can
be more commercially feasible in areas where the Some governments have supported these
returns are too low (or too slow) for commercial community initiatives. The Scottish government’s
operators. Community Broadband Scotland (CBS) scheme,
for example, provides financial support to
Community broadband networks, for example, communities for this purpose . So far, the CBS has
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tend to be "self-build" projects located in remote invested in at least nine projects in rural Scottish
geographical areas, where there is typically a communities. Eligible communities can receive
lower commercial incentive for operators to
roll out their networks. Project funding can be

28 Trends in Telecommunication Reform 2016