Sustainable Broadband: A Monitoring Framework for Broadband Policy in Rural Areas in the Netherlands

Abstract

As General Purpose Technologies (GPTs) (Bresnahan & Trajtenberg, 1995), information and communication technologies (ICT) have been applied in different ways across companies and regions. The differences in ICT adoption across regions have been approached from a variety of perspectives, e.g. from the business users (Forman, 2005) and residential users point of view (Goldfarb & Prince, 2008) showing that regional differences are key characteristics of ICT growth. But these spatial disparities have to be approached with caution as technological characteristics of broadband are important to define rural areas (Grubesic & Murray, 2002). Even if rural areas in the European Union are defined according to technological and geographical dimensions (CEU, 2012), there is ample of room for a variety of interpretations by market parties and local governments. In case of (local) government intervention in broadband markets, there is a need to evaluate broadband initiatives with respect to their economic benefits in rural areas. In order to evaluate the economic impact of broadband, numerous studies in particular in the United States have been conducted to examine the link between broadband availability and a number of economic characteristics of rural regions (Connected Nation, 2008; Gilllett, Lehr, Osorio, & Sirbu, 2006; Whitacre, Gallardo, & Strover, 2013). Just recently the literature has focused on elements which will put broadband on a sustainable path, i.e. taking environmental implications of ICT into account (Ropke, 2012). A number of evaluation exercises of broadband programs have been conducted showing that “encouraging broadband adoption is only part of a larger digital literacy effort, and programs work when they make non-users want to connect, make the Internet cheaper and easier to use, and adjust to users’ preferences” (Hauge & Prieger, 2010). However, there currently there is no generally accepted monitoring framework that can be used to evaluate and monitor the (social) costs and benefits of broadband programs in rural areas. The paper contributes to the discussion in providing a monitoring framework for sustainable broadband in rural areas. This framework is developed by using the (social) cost-benefit analysis (SCBA) methodology applied to (all) large infrastructure programs in the Netherlands since 2003 (Eijgenraam, Koopmans, Tang, & Verster, 2000). This methodology is applied to investigate the implementation of broadband technologies in rural areas. In this context, a DPSIR scheme (originally developed as a framework for environmental indicators) is applied to monitor and a SCBA to evaluate the choice between the different alternatives (Eijgenraam, et al., 2000). As proposed by Ramirez (2007), such alternative monitoring framework is needed to evaluate economic progress in rural areas (Ramirez, 2007). As part of NGA networks (CEU, 2009, 2012), fiber technologies are increasingly considered by provincial governments in the Netherlands as the most future-proof technology of broadband infrastructure in rural areas. Different provinces in the Netherlands have set up large infrastructural broadband funds aimed at stimulating local economic development and bridging the digital divide between rural and urban areas (Provincie Noord-Brabant/ Dialogic, 2012; Provincie Overijssel, 2010). It is expected that fiber technologies will provide higher value-added to society (compared to traditional broadband technologies such as DSL or cable modem technologies) over the long term. For rural areas, these benefits have, in particular, been related to the arrival of e-health services, teleworking and the renewal of rural areas. For residential users, benefits from e-health services are emerging due to smart homes solution supporting greater self-reliance of the elderly which allow people to stay longer at home. For business users, benefits from teleworking are related to the reduction of travel time (Van der Wee et al., 2012). New NGA technologies can also support the renewal of rural areas (McGranahan & Wojan, 2007; Stephens & Partridge, 2011). To complicate matters, provincial governments are facing a number of options with respect to evaluating different project proposals for rural broadband. For example, to what extent do these proposals reflect the goals of provincial plans for rural areas (e.g. do they support renewal of rural areas; do they improve or enhance self-reliance of inhabitants?); to what extent do these proposal opt for the “right” NGA network technology?; do they support a competitive supply structure and new trans-sectoral services? In this context, a monitoring framework for broadband policy in rural areas in the Netherlands will provide more certainty with respect to interventions by provincial government, a better evaluation of the emerging (social) benefits and their allocation with respect to the different stakeholders in provincial programs.