Examples from around the world demonstrate that letting the market work can go a long way toward achieving widespread broadband access. Most countries rely primarily on private sector initiatives and investment to achieve broadband access and use throughout their territories. Yet even in well-working market environments, some gaps typically remain, between and within countries. Despite declining costs, some locations will not be commercially viable in the foreseeable future. In places with broadband service, some users will not be able to afford it. Persons with disabilities may have difficulty using standard equipment. These are some of the situations where market forces alone are not likely to ensure access to broadband. When government steps in to fill these gaps, it goes ahead of or beyond the market. Achieving broadband access ahead of or beyond the market can be understood as achieving “universal broadband access.”

An important question for the achievement of universal broadband access relates to the role of governments when market mechanisms alone do not meet the goals set for broadband access and use. Some degree of government intervention may be required to complement the market and overcome impediments to universal broadband. However, a distinction should be made between enabling, facilitating, and complementing market developments versus substituting government decisions for market forces and public sector investment for private investment. There is also the question of whether and to what extent scarce public sector resources, for which there are many competing demands from other sectors, should be used to extend broadband ahead of or beyond the market.

Governments have a range of instruments at their disposal to narrow gaps or accelerate rollout of broadband (see chapters 1 and 3). The choice of instrument depends on the specific obstacles that the government is trying to overcome. These obstacles may involve the following:

• A proposed investment may not be commercially viable.
• The cost of doing business in the country may be too high.
• Laws and regulations may not be well suited to facilitate the adoption of new technologies and business models.
• There may be a lack or shortage of long-term financing (especially in local currency) commensurate with long economic lives and payback times of the investments.
• Regulatory and political risk may undermine what otherwise would be an attractive business proposition.
• Uncertain prospects for market development may pose excessive commercial risk.

This chapter seeks to provide an overview of what policy makers can do to address perceived shortfalls, to define a broadband development strategy capable of addressing market failures, and to work toward achieving universal broadband service. It discusses the different levels of access that a government strategy may pursue, the role of private-led competitive markets in achieving these objectives, the role of the government in narrowing or eliminating any gaps between markets and the country’s development needs, and the design of effective government strategies to meet this challenge. This chapter then examines the use of fiscal resources to support private supply of broadband, including choice of instruments, use of subsidies, and mechanisms to collect and disburse funds for subsidy.