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Ovum: Separation the key issue in Australian next-generation network debate

18 06 2009 – With the publication last Friday of the submissions to the government’s regulatory review, the Australian industry is clearly split. The incumbent Telstra is on one side and everybody else (including the regulator, the ACCC) is on the other. But there is still a chance for a manageable transition to FTTH.

image Battle lines are drawn

In April 2009 the Australian government committed itself to investing up to A$43 billion in a national wholesale-only fibre-to-the-home (FTTH) network to be built over the next eight years. A national broadband network company (NBNCo) is being created to own and operate the FTTH access network.

It also announced a review of telecommunications regulation. The review canvasses both short-term changes to promote the current ULL-based competition and long-term changes that might be required for a next-generation network. A government response is due at the end of 2009.

The submissions to the government’s regulatory review were released last Friday. They show little common ground between Telstra and the rest of the industry. The regulator is firmly in the camp of Telstra’s competitors.

Telstra has proposed adjustments to the current competition regime that leave the broad pattern of regulation unchanged:

“Telstra delenda est”

During the Punic Wars, Roman senators ended every speech to the Senate – on whatever topic – with the words “Cartago delenda est”: Carthage must be destroyed. This sentiment is evident in the ACCC’s submission, which is reasonably representative of non-incumbent views:

However, there are also some jarring notes among the submissions. For example, Optus, Telstra’s largest competitor, argues that a national FTTH network is only sustainable in the absence of fixed infrastructure competition. This implies a transition to a statutory monopoly by rolling all of Australia’s access networks into the new NBNCo. This clashes awkwardly with the ACCC’s contention that a divested HFC network would provide valuable competition in the transition period to a national FTTH network.

Common ground is still possible

Telstra cannot ignore the groundswell for separation. Under the government’s FTTH plans, separation is the end game anyway. Its challenge is to manage the process and defend its own financial interests.

But nor can the government ignore Telstra’s capacity to damage the NBNCo’s business case. If the NBNCo must build its network and fight Telstra to peel away customers (separation takes away Telstra’s copper, not its customers), then the government’s subsidy costs will be vastly inflated.

The model that is now being widely discussed in the industry is for Telstra’s copper access network to be rolled into the NBNCo. This would achieve structural separation in the short term, while creating a sustainable access operator with an established revenue stream. In order for this to be attractive to Telstra, it would need to get a lot of equity and some kind of guarantee on the financial return on that equity.

This model reduces the FTTH upgrade from a commercial challenge to an engineering one to be managed by the NBNCo. Customers will be cut over to the new network automatically rather than having to be captured. This will allow the NBNCo to focus on growing new revenues as FTTH is rolled out.

If acceptable parameters for such a deal can be found, the government will have pulled off a remarkable coup. If not then a lose/lose scenario seems inevitable.

Source: ovum.com

FTTH: Government intervention in superfast broadband around the world

19 06 2009 – The Digital Britain report just published aims to provide a blueprint for an economy based on a high-speed digital communications infrastructure.

Carolyn Kimber, chairman of the Communication Managers’ Association, whose members spend £15bn/y on communications, wants a new Communications Act that balances better the interests of businesses and consumers. She said, "The CMA would have preferred to see an unequivocal commitment to carrier-neutral, open access networks as part of a revised universal access obligation."

Government intervention in superfast broadband around the world:

Australia: A$43bn project to deliver fiber to the home (FTTH, capable of 100Mbps) to 90% of homes; 12Mbps to the remaining 10%. Public to own at least 51% of the project. Minimum A$2,750 (£1,350) per household, depending on public sector share of investment.

New Zealand: NZ$1.5bn of public money to be used alongside private investment to deliver FTTH to 75% of homes. NZ$1,000 (£390) per household.

Singapore: $0.75bn of public funds available to deliver FTTH to 100% of homes. $715 (£450) per household.

Finland: By end of 2015, 99% of homes will be within 2km of a fiber connection. 95% of homes will be served by the market. The remaining 5% will be two-thirds funded by public investment of €133m. €55 (£47) per household (additional investment required to connect homes to fiber infrastructure).

Greece: €0.7bn of public investment, with a further €1.4bn of private investment, to deliver FTTH to 2m homes. €192 (£160) per household.

USA: Stimulus package includes $7.2bn for broadband projects, some which is to stimulate investment in superfast broadband, although most is to expand current broadband services. $63 (£40) per household.

UK: Final Third Fund to raise £1bn over seven years to bring superfast broadband to every home. £6 per household per year; £42 per household over seven years

Source: computerweekly.com

"Κάλεσμα" του Δημοσίου στη Deutsche Telekom για το σχέδιο οπτικών ινών

18 06 2009 – του Φώτη Φωτεινού – Κανονικά πρόκειται να προκηρυχτεί το έργο δημιουργίας πανελλαδικού δικτύου οπτικών ινών, παρά τις ενστάσεις του ΟΤΕ.

Ο διευθύνων σύμβουλος της D.T., κ. Ρενέ Όμπερμαν και ο διευθύνων σύμβουλος του ΟΤΕ, κ. Παναγής Βουρλούμης, είχαν συνάντηση με τον υπουργό Μεταφορών κ. Ευρυπίδη Στυλιανίδη.
Το υπουργείο Μεταφορών διαμήνυσε τον επικεφαλής της D.T. ότι το έργο με τις οπτικές ίνες θα προκηρυχτεί κανονικά, καλώντας παράλληλα την D.T. και τον ΟΤΕ να συμμετάσχουν στη δημόσια διαβούλευση.

Οι εκπρόσωποι της γερμανικής εταιρείας ανέφεραν, σύμφωνα με πληροφορίες, στον υπουργό Μεταφορών ότι «έτσι όπως έχει εξαγγελθεί το έργο, ωφελεί τους ανταγωνιστές του ΟΤΕ».
Από την πλευρά του, το υπουργείο Μεταφορών απέρριψε οποιαδήποτε ιδέα να δοθεί το έργο ως απευθείας ανάθεση στον ΟΤΕ.

«Ως επιχείρηση μπορεί να θέλανε την απευθείας ανάθεση, αλλά κάτι τέτοιο δεν μπορεί να γίνει», σχολίασαν στελέχη του υπουργείου Μεταφορών, το οποίο δεν παίρνει θέση σχετικά με το αν τάσσεται υπέρ ή όχι του λειτουργικού διαχωρισμού του ΟΤΕ.
«Αυτό είναι κάτι που θέλει η ΕΕΤΤ. Το υπουργείο δεν παίρνει θέση», ανέφεραν στελέχη του ΥΜΕ.

Πλάκα μας κάνουν ? αφού είναι τα αφεντικά της ΕΕΤΤ !

Μέχρι τα μέσα του καλοκαιριού θα έχει καταρτιστεί το πλαίσιο διαβούλευσης, έτσι ώστε μετά το Σεπτέμβρη να προκηρυχτεί ο διαγωνισμός, ύψους 2,1 δις. ευρώ, υπό την έγκριση της ΕΕ.
Παράλληλα, το υπουργείο ζήτησε από την D.T. την αποστολή και δεύτερου δορυφόρου, αν και η εταιρεία δεν έχει αποφασίσει ακόμα τι θα κάνει με τον Hellas Sat.

Ακόμη, η D.T. διαμαρτυρήθηκε για τα υψηλά πρόστιμα της ΕΕΤΤ κατά του ΟΤΕ, τα οποία έχουν φτάσει τα 70 εκατ. ευρώ, την ίδια ώρα που φουντώνουν τα σενάρια γύρω από το μέλλον του προέδρου της ΕΕΤΤ, κ. Ν. Αλεξανδρίδη.

Πηγή: capital.gr

Rules for New EU Telecom Networks a Political Football?

12 06 2009 – The European Commission unveiled a long-awaited draft recommendation Friday for how to create new fiber-optic-based telecommunication networks throughout Europe, but the move was heavily criticized from both sides in the debate over next-generation networks.

In an unusually stern rebuke, a trade group representing companies trying to compete with the former telephone monopolies accused the Commission of "condoning collusion" between the incumbent national operators and one smaller rival of their choice.

One part of the draft recommendation states that if an incumbent operator joins forces with one other company to lay down fiber-optic cables, the obligations to ensure fair access at reasonable prices is lifted.

According to the European Competitive Telecommunications Association (ECTA), which represents smaller rivals of former incumbents, this amounts to a regulatory holiday for the incumbents.

"We are surprised and disappointed that the European Commission, which is meant to be the guardian of competition, appears to have compromised its strong stand against ‘regulatory holidays’ in the telecoms sector and appears to be condoning collusion," said its chairman, Innocenzo Genna.

Meanwhile, a trade group representing the interests of the incumbents said the draft recommendation "will discourage investors, whom the Commission proposes to bear onerous access and price control obligations."

The Commission said it is trying to strike a balance between the interests of the two sides in the argument. "The fact that they are both complaining seems to imply that we have struck a good balance," said Jonathan Todd, spokesman for Neelie Kroes, the competition commissioner, who together with telecom commissioner Viviane Reding, drafted the recommendations.

However, some people following the issue accuse the Commission of being biased in favor of the incumbents, and argue that political pressure from the highest levels has been brought to bear on the two commissioners in order to give incumbents what they want — the ability to dominate the new super-fast broadband networks during their first years in place.

Commission President Jose Manuel Barroso is understood to have met with incumbents four times this year, in January, February, March and May, to hear their arguments in favor of a light regulatory touch with regard to next-generation networks.

ECTA also requested a face-to-face meeting with Barroso in order to make the opposing arguments, but the Commission president’s office never responded to its request, said the trade group’s director of regulatory affairs, Ilse Godlovitch.

"We would like to present our arguments to the Commission president, but although we have requested a meeting with him we are still waiting for a response," she said.

The Commission itself is very sensitive to accusations of political pressure, especially if it is alleged to be compromising the E.U. executive body’s role in safeguarding fair competition in the E.U.

It also never admits to differences of opinion between commissioners over issues it has made public statements about.

Nevertheless, several people, including a telecom regulator, a diplomat from one large E.U. member state, ECTA, and even one person from within the Commission itself have said that the Commission’s draft recommendation may be biased in favor of incumbents. Only ECTA spoke out publicly. The other sources insisted on remaining anonymous.

"There have been numerous meetings this week about the draft recommendation, and it does appear that political pressure has been brought to bear in favor of incumbent operators," said one person close to the discussions.

According to the diplomat, the political pressure stems from the German government, which is fighting to secure a better deal for Deutsche Telekom. "Germany is pressuring Barroso to intervene in favor of the incumbents. It is also lobbying other countries to do likewise," he said.

Barroso has publicly stated his interest in leading the next Commission once the current team’s mandate expires in the fall. To ensure that he gets the job again, he needs the endorsement of the heads of national governments, and Germany’s in particular because Germany is the biggest E.U. member state.

The draft recommendation could be amended after a public consultation with industry, consumer groups and telecom regulators, which closes next month. It won’t become final until December, when a new Commission should be in place.

In the announcement of the draft recommendation Friday, Reding, who has been the loudest advocate for effective competition in the telecom sector, urged industry lobby groups "to contribute actively to the new public consultation in order to help us achieve the right balance."

Does this mean she feels that the draft published Friday lacks that balance? Her spokesman, Martin Selmayr, declined to comment. "That’s a question for Neelie Kroes," he said.

Todd said the draft recommendation "strikes a good balance between the competing interests."

Source: pcworld.com

More than 1 million Dutch FTTH subscribers by 2013

05 06 2009 – The Dutch fibre-to-the-home market is set to steal significant market share from ADSL and cable operators over the next few years.

The number of homes passed almost doubled in 2008 to an estimated 336,500 by year-end. During the first quarter of 2009 the number expanded further to 361,700, held back somewhat by fierce weather conditions. We expect Reggefiber Group, the main investor of the new infrastructure, to increase its build-out capacity further. We estimate the market to end 2009 with more than 500,000 homes passed, and by 2013, we foresee this number to cross the 2 million mark.

Research firm Telecompaper is publishing its annual review of the Dutch FTTH market. The report discusses a wide range of related topics, including technology, regulation, the role of the government, financial aspects and the fibre-related strategies of the leading market participants. We have conducted almost 20 interviews across the Dutch fibre market, speaking with C-level executives.

We think that the Dutch market could lead the way internationally. At the end of 2008, the Netherlands ranked second in the group of 30 OECD countries, with a broadband penetration of 35.8 percent, second only to Denmark. When it comes to fibre however, the Netherlands ranks eleventh. Now that KPN has decided to join forces with Reggefiber and Opta has regulation in place, FTTH is ready to leap forward and be a serious competitor to ADSL and cable. However, inhibitors remain, including cable’s aggressive Docsis 3.0 roll-out, limited supply of construction workers for the physical roll-out of the new infrastructure and KPN’s legacy ADSL networks, which may tempt the incumbent to migrate to fibre at a modest pace.

Based on a number of drivers, inhibitors, and several unresolved issues, we have made three scenarios for the Dutch FTTH market in the 2009-2013 period. Our estimates cover the number of homes passed, homes connected as well as the number of homes activated, i.e. the number of paying subscribers.

For the number of homes passed, we estimate a CAGR of 50.6 percent to end the 2009-2013 period at 2.04 million homes. We expect the number of homes activated to display a 46.4 percent CAGR to end the period with 1.07 million connections. The latter represents 13.4 percent of all Dutch homes (from less than 2% currently).

Source: cat-iq

Portugal Telecom selects Huawei to develop FTTH network

26 05 2009 – Huawei Technologies Co Ltd (Huawei), a provider of telecomms network solutions, has announced it has been selected by telecomms operator Portugal Telecom for the development of the its Fibre-to-the-Home (FTTH) network in Portugal.

According to the company, since 2007 Huawei, in collaboration with Portugal Telecom, has been developing laboratory tests and field trials to supply new generation optical technology for the access network in Portugal. The tests are based on new Gigabit Passive Optical Network (GPON) technology.
This project is expected to enable Portugal Telecom to provide the Portuguese market with advanced access technology. Under the commercial offering Meo, the company is currently providing the new concept of television services based on IPTV. The development of the FTTH network will allow the operator to increase the efficiency and quality of the services and provide High Definition IPTV, enhanced high speed Internet and advanced IP telephone services. The operator will also be able to increase its number of subscribers and develop new services for the future.

The GPON project with Portugal Telecom is based on the Huawei MA5600T platform. Its Terabit architecture, carrier-class IP services and comprehensive access features support most optical fibre and copper pair access technologies (such as GPON and VDSL2) in a single platform in order to help the operators undergo network transformation.
No financial details were disclosed.

Source: tmcnet.com

Vodafone proposes $6b broadband consortium

image 21 05 2009 – Vodafone New Zealand has submitted a proposal to the Ministry of Economic Development (MED) for the government’s plan to install a national next generation network (NGN), Stuff.co.nz reports.

Vodafone’s white paper suggests a co-investment model, combining public and private investment to fund a new network business, dubbed FibreCo.

"Competitors become investors and investors become competitors," Vodafone said.


Vodafone said, ‘This idea assumes [industry-wide agreement] that we will not accept moving from a copper access monopoly to a fibre access monopoly.’ Vodafone’s plan calls for itself, Chorus – Telecom New Zealand’s network arm, and TelstraClear to put their network assets into the new business that would be jointly owned by the trio and the government, which would invest through its NZD1.5 billion (USD906 million) broadband fund. FibreCo would then provide wholesale services to its shareholders, and its shareholders would compete in retail markets.

How it would work

FibreCo would only sell to its shareholders and its shareholders would compete in downstream wholesale and retail markets. Non-investors would gain access to the network as wholesale customers of shareholders on competitive commercial terms.

FibreCo would treat its shareholder customers on an equal basis and be independent of them, operating on an arm’s length basis.

By way of example, three shareholders could invest $1.5 billion each and the Crown could invest $1.5 billion to provide $6 billion for a network.

Effectively the co-investment model is a "pay then take" arrangement for shareholders.

FibreCo would operate at a modest profit in the long-term and not overbuild existing assets. It would have the ability to buy rights over shareholders’ existing assets.

Where to from here?

Vodafone said it did make a submission to the Ministry of Economic Development (MED) on the government’s broadband plan.

Its "white paper" released on Thursday was fuller than the submission and it was sent to MED on Wednesday.

Vodafone argued that the existing regulatory model may not be appropriate for next generation access networks.

"The FibreCo concept will rely on a commitment from the government not to intervene in the operation or FibreCo or its downstream markets," Vodafone said.

This agreement would be conditional on FibreCo meeting agreed criteria.

Vodafone said FibreCo was a big idea that required co-operation between the government and private sector.

"This idea assumes industry wide agreement that we will not accept moving from a copper access monopoly to a fibre access monopoly," Vodafone said.

Source: Telegeography