open networks: strong and weak points

During this week I have found several news about FTTH and the deployment of open access networks.

The first one of CMT (Spanish regulator)  requests public funds to deploy NGNs. Yo can read more following the next link:

CMT requests public funding to deploy fibre networks

We have already one example of open access infrastructure here in Spain, and more specifically in Asturias.

FTTH network in Asturias

This network is under expansion at present, to cover all the municipalities with more than 1,000 inhabitants by 2010.

I think open networks is the road to follow and I always support this statement comparing a fibre network with a motorway. Motorways are deployed by public entities and some of them, the high speed ones, (too many in Catalonia, by the way) are operated by the private sector and users pay a toll. We do not think in deploying two motorways one next to the other to encourage competition and reduce the price of the toll, right?

For FTTH and NGNs I think this example quite good and offers a viable business model. Private companies can not think about ROIs of 20 years and therefore do not find a business case for FTTH, however, public bodies can and also should, in order to offer infrastructures to their citizens and increase the services that a region offers.

I see, however, two difficult points for the deployment of open networks:

  • money: in Spain, municipalities are not in a good financial position and they do not have money to invest. Therefore, I believe money should come from the Regions (Catalonia has just released a 1M EUR funding plan for the deployment of fibre networks, which is currently open) and credits should be long term to allow municipalities to be able to find a viable business case.
  • operators: vertical operators have difficulties to understand that FTTH networks require new business models and they are not happy to offer just services and do not own the infrastructure. In the past, the competition model was to compete with different technologies: xDSL against CATV… However, the only right future-proof technology is FTTH and this means that the technological competition will be over quite soon.

Anyway, we are moving, slowly, but we are moving. Much slowlier than in Singapur

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