innovative broadband project in India

All of the 21,000 villages in the Indian state of Andhra Pradesh will soon have 100 Mbps Internet service. The state government sought private-sector bids for the project, contributed about 14% of project equity, provided free right-of-way permissions, and signed on as an anchor customer (40,000 government buildings connected for a fixed annual fee). The total cost of the network: about US$90 million.

Connections within villages to residences and business are left to competing local cable companies. Such cable companies have brought cable TV to about 40% of residences in Andhra Pradesh. The state-wide network is required to make available at the village points-of-presence (POPs) wholesale video distribution, telephony, and internet services at agreed prices. This makes the business plan for village networks simple: bring the services available at the village POPs to individual customers for a mark-up. This seems like a practical implementation of decentralizing local connectivity while standardizing wide-area service distribution (pdf).

Competition among network service provides can have large costs (pdf) relative to the cost of the network infrastructure itself. Government initiatives that promote a good structure for competition can help to make broadband services widely accessible at low cost. The Andhra Pradesh Broadband Project promises to do just that. Other innovative broadband projects, such the Singapore National Broadband Network and municipal broadband projects, have different institutional structures. More comparative institutional analysis would be helpful for informing communications policy.

Randeep Sudan, now at the World Bank, helped put together the Andhra Pradesh Broadband Project. He described the project in a recent presentation at the FCC. With his permission, I have posted his slides here.

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