The South Korean case of deploying rural broadband via fiber networks through universal service and public-private partnerships

Despite broadband being an essential infrastructure for conducting basic socio-economic activities and reducing inequality and the digital divide, expanding broadband coverage in rural areas remains a significant challenge in many countries due to high deployment costs. South Korea, a developed country in terms of fixed broadband penetration, implemented two policies for rural broadband via fiber access networks simultaneously during the COVID-19 pandemic. One is the universal broadband service at 100 Mbps speed introduced in 2020, and the other is the rural broadband project in terms of a public-private partnership (PPP) that proceeded from August 2020 to 2022. While both policies contribute to reducing the broadband gap between the urban and the rural in the country, it is still important to find the optimal cost-effective combination of the plural rural policies as much as possible from the cost perspective. Accordingly, this study proposes an investment cost estimation model for deploying rural broadband via fiber networks in South Korea and evaluates whether implementing two rural broadband policies in the country is cost-effective. The study finds the following:

• Choosing the superior broadband policy for deploying rural broadband in terms of cost is still challenging;
• The PPP-based project was still inferior to universal service in terms of average investment cost (AIC);
• Universal service had significant constraints in providing broadband because of the end-users' cost burden, resulting in low broadband adoption;
• Regardless of technology, the investment cost can be recovered from monthly subscriptions;
•  The South Korean government needs to consider monitoring the potential of new access technologies to develop rural broadband more cost-effectively and solve terrain constraints.
• Rural broadband project is an effective measure to deploy rural broadband, in addition to the introduction of universal service.

Therefore, the government needs to consider some measures to increase broadband availability and broadband adoption, such as widening the rural areas under the jurisdiction of participating broadband providers, decreasing the proportion of participating broadband providers bearing the investment cost of deploying broadband, and improving the cost burden of the end-users of universal service in some limited areas.