A wireless technology known as Wimax could bring broadband to rural areas, says a report by the Organisation for Economic Co-operation and Development.
Wimax could be a boon to rural areas without broadband
The OECD report looked at the prospects for Wimax, a technology widely touted as one to beat both wi-fi and third-generation mobile networks.
But, says the report, regulatory, security and spectrum problems may limit the widespread use of Wimax.
Instead, Wimax may find niche uses such as in remote areas.
Wimax (Worldwide Interoperability for Microwave Access) is a technology designed to give people high speed access to the net over relatively long distances.
A typical installation of a Wimax system could give users in an area three to 10 kilometres wide a 40 megabits per second (Mbps) connection to the net.
Said the report: "one cell could theoretically allow hundreds of business connections at 1.5 mbps and thousands of residential connections at 256 kbps".
Because of this ability to provide broadband speeds to a relatively large population of users, Wimax has been widely promoted as the "proper" replacement for wi-fi which offers higher speeds but typically only over a few tens of metres.
In particular, said the report, chip giant Intel described Wimax as a "disruptive" technology that has the potential to upset the business models of both mobile phone firms and traditional net suppliers.
However, the authors of the OECD report took a more cautious line and said there were numerous uncertainties that meant Wimax was not guaranteed a rosy future.
"Despite all the excitement over Wimax, the ultimate role of Wimax in the wireless market is debatable," it said.
Wimax is unlikely to replace wi-fi networks, says the report
The report cited the early promise of wireless local loop services in the late 1990s that were supposed to sound the death knell for traditional telephone operators.
High operating costs and technical problems forced the failure of most wireless local loop operators. The OECD pointed out that although the Wimax Forum, which oversees standards for the technology, is maintaining tight specifications to keep a cap on costs there were other issues that could still dent its success.
Setting up a nationwide Wimax network in the US was likely to cost in excess of $3 billion (£1.74 billion), said the report.
"Third-generation mobile operators have incurred great expense to roll out new networks and the prospect of starting again with a new Wimax network is not appealing," wrote the authors.
By contrast, it said, mobile operators were more likely to upgrade their existing networks with technologies such as High Speed Downlink Packet Access.
The report also stressed that Wimax should not be seen as a replacement for wi-fi which does a good job of giving high speed access in tight locations. The two technologies were likely to be complementary, said the report with Wimax used to link islands of wi-fi together.
Alternatively, Wimax may find a role as a service that can reach rural and remote areas where it is too expensive to run cables or upgrade exchanges to support broadband.
The OECD report pointed out that access to the radio spectrum Wimax uses is not universal across all nations and some parts of the spectrum it seeks to use are reserved in some countries or place restrictions on how they can be used.
Also some countries have run or are considering auctions for the spectrum that Wimax is supposed to use.
There were also issues to confront on security and on how Wimax networks should be managed to ensure that rivals do not try to prioritise their traffic over others.