Sir, – Kevin O’Sullivan (August 3rd) says that broadband is the modern equivalent of the Victorian postal service. The two are quite different, as the cost of broadband is primarily infrastructural and up-front, while the cost of a postal service is mostly operational and can be modulated according to the circumstances.
A better Victorian analogy for broadband would be canal or rail. Developers of these services had to be confident that the high up-front cost would give a sufficient return, meaning that they focused initially on large towns and cities that would guarantee demand, and then gradually extended spur-lines to other profitable commercial centres or tourist destinations. People outside of these networks were no doubt envious, but there was no expectation that the state would fund the expansion of services to every village in the nation.
A warning from history is that investors in Ireland’s canal network suffered significant losses when rail appeared and stole their business, and that rail investors took a similar hit when the motor car arrived a few years later.
The risk of a rival service, such as high-quality mobile broadband, becoming available during the long period over which investment would be recouped is one of the serious concerns that has deterred private investors from the national broadband plan.
Instead of subsidising a white elephant fibre network, perhaps mobile service providers could be incentivised to upgrade and expand their cell networks in otherwise non-profitable locations? – Yours, etc,