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Open Networks Delivering the Goods for All

The City of Amsterdam announcement to now move to the next stage of their FttH (fibre to the home) project—with another roll out covering 100,000 connections—is a clear indication that the concept of open access FttH networks is a valid one. This will have large scale implications for countries around the world who are looking at using open network based telecoms infrastructure projects to stimulate their economies.

BuddeComm has been involved in industry policy discussions with experts on three continents about the future of telecoms.

We have developed a scenario. The vision naturally has a range of strategies attached, but in simple terms it works as follows:

  • Telecoms infrastructure is of national economic and social importance;
  • For our societies to profit from the digital economy infrastructure must be based on the principle of open networks;
  • This allows us to multiply the benefits this infrastructure has to offer to other sectors such as healthcare, education, energy, environment, media and communications;
  • Once open networks and the access tariffs are established the national telecoms operator will be in the best position to run this network, thus avoiding the necessity for wasteful duplication.
  • Infrastructure and digital applications will need to be developed parallel with each other and this requires trans-sectoral thinking from the government and the industry—not the current silo thinking.

While it is great to put such visions in front of the policymakers in the end the question is whether this is achievable—can such a vision be implemented?

Again the Netherlands is paving the way. Amsterdam was one of the first to identify the multiplier effect and the need for trans-sectoral thinking. Unfortunately the incumbent KPN first preferred to roll out fibre nationally together with the cable companies and so to hold on to its vertical monopoly. Only in the last few years KPN started to warm up to becoming involved on the basis of an open network.

Amsterdam fought legal battles against the incumbent cable company UPC, a property of Liberty Global’s tycoon John Malone, in both the Netherlands and European courts. The City won this battle and a consortium, which did not include the incumbent, started to roll out the city’s FttH network.

This development became a real boost for other FttH networks in the Netherlands, and they favoured the independent fibre builder Reggefiber.

The mood at KPN began to change under the leadership of its CEO Ad Scheepbouwer who started to see the great advantages of open networks. He then came to an agreement with the regulator OPTA who had been pushing the incumbent to voluntarily implement the concept of open networks. Once that was done the company opened itself up to the opportunities that arose. It took a shareholding in Reggefiber and accepted the FttH access regime that was proposed by OPTA.

By becoming a shareholder in Reggefiber KPN also became a shareholder in the Amsterdam FttH network. With widespread industry and regulatory agreement on the fibre regulations in place this is paving the way for KPN to become a/the key infrastructure provider in that network.

Reggefiber had already developed its own local fibre initiatives on community drives, including those in Deventer, Nuenen, Eindhoven, Geldrop, Arnhem, Utrecht, Bussum, Hilversum, Dordrecht, Dronten, Lelystad, Almere, Nijmegen, Hillegom, Valkenswaard and Best. A different approach has been adopted in larger towns where the community drive is less likely to succeed—in Almere the company built the local FttH network jointly with local housing corporations, renting capacity to other companies, including KPN before KPN’s purchase of 41% of Reggefiber. At the time, KPN even encouraged its PSTN customers to migrate to the Reggefiber network while it positioned itself as a service operator.

This example shows that the vision and strategies advocated by BuddeComm in Europe, USA, Australia and New Zealand are valid, and that these will eventually bring the incumbent back into the game.

This should be a real boon for government and industry policymakers who all more or less agree with the concept but are anxious not to be the first to go down this track in case of failure.

The end result is that open networks are the way of the future. They will deliver unprecedented economic and social benefits. This will force government and industry to move into a trans-sectoral mode of thinking—this time with an incumbent eager to promote that message as it now clearly recognises the benefits that can be gained from such an approach.

By Paul Budde, Managing Director of Paul Budde Communication

Paul is also a contributor of the Paul Budde Communication blog located here.

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