Today’s post is about the necessity to offer an open access layer 0 and layer 1 infrastructure… does it has sense to offer dark fiber so all the operators deploy their own networks?
In Switzerland they are following this approach, but… is this level of unbundling necessary?
My personal opinion is that it is not necessary from the cost point of view, although I will not enter into regulatory issues.
Swiss multi fiber approach is a good solution in a market where all the operators want to keep with their existing business models, but… are those business models future-proof? Is this the best business model for the end user?
We all know that incumbents are not happy sharing infrastructure, but now, all operators are private companies so they have their boards that dictate the deployment strategies based on business profitability. This means that what used to work in the past, it is unlikely to work now, as the copper networks that where deployed in the 20th century were built by public telecom companies that later on where privatized, most of them keeping the copper that was paid by all the taxpayers.
Now, the picture is quite different. In most of the countries we have the incumbent operator, which was the former telecom public company, and new operators that deploy their own CATV network or resell incumbent’s services. Others deploy fiber, but this is just a minority.
The cost of deploying a new access infrastructure is huge, so just very big operators can afford to deploy NGNs. Thus, regulatory bodies believe that it is good to deploy dark-fiber-based operators so other operators can hire their infrastructure and deploy their active equipment. This is the approach that will be followed in New Zealand, for instance.
Although this is a intermediate approach, I do not believe it is the best approach, because it is not optimal from the cost perspective point of view.
Following this operation model, each operator will have to deploy their own active equipment in every single home, take care of the maintenance… and this increase the cost, thus, the price of the service.
So… what would be my recommendation?
Keep things simple and deploy one single network, operated by a public or regulated company, offering ubiquitous and identical services to all of the network (layer 2 and above) operators. Following this model, we will reduce
- deployment costs,
- operational costs and
- will be able to offer universal services.
So, in a single strategic decision, we would be able to sort out all the limitations that are stopping next generation networks to be developed. Also, this would be the cheapest way to deploy NGNs, which means that potentially, service costs would also be reduced.
We can summarize this concept in a single sentence: telecom infrastructures should be considered a utility.
We would not understand to deploy parallel power networks, right? Why then we want telecom operators to compete at the infrastructure layer? I think this has no sense…