Delay in NOFN Roll Out-As Expected

The Economic Times today reports yet another delay in roll out of NOFN by BBNL as the PSUs are unable to award contracts worth Rs 6 billion for cable laying and trenching. 

I would invite readers to review my post titled, “National Broadband Plans-The Largely Unexamined Competition Debate” under the label NOFN. I have already covered in previous posts, my reasoning as to why  India should have hesitated before venturing to roll out a country wide network using the nomination route involving Public Sector Incumbents. When various option were being examined as to which methodology to choose for NOFN, there was an explicit impatience with the usual USOF method of first arriving at subsidy benchmarks and then bidding out a scheme on a regional/sub-regional basis to all eligible operators. This was frowned upon as too tedious and a source of delay. 

It was decided that creating an SPV of PSUs would be the better way forward especially as BSNL already owns the chunk of rural OFC networks.

I have examined this debate in my post “Broadband Networks through Infrastructure Sharing Route”  (also placed under the label NOFN). An alternative model has been presented to readers. One that is based on bidding.

 The right way in  my view would have been to encourage/mandate  BSNL to share its OFC capacity with the region wise winning bidder and to include the leasing plus incentive cost in the subsidy benchmarks. With this arrangement the network could have been rolled out by multiple USPs thereby creating the required  non-discriminatory open access  OFC backbone in rural blocks  with no adverse impact on competition. The facilitation extended by USOF (Central Government) by way of coordination with state governments for right of way clearances could have been done in this model too. This would probably have gone faster and ensured that at least  a good proportion  if not all villages would be reaping the benefits of high capacity OFC backbones connectivity by now.