ftth conference 2011 workshop economic and social implication of fiber derployment agustin diaz oecd
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Economic and social implications of fibre deploymentFTTH ConferenceWorkshop: Standardisation and Economic Impact
Agustin DIAZ Milan, 8 February 2011
The views expressed in this presentation are solely those of the author anddo not necessarily reflect the opinions of the OECD or its membership.
Broadband:General purpose technology
Fibre applications: e-learning/telework
• Access to digital learning resources• Communication among schools, teacher and
students• Professional education/research networks• Need to download and UPLOAD content
Fibre applications: e-Health
• Ageing population• Videoconferencing applications (latency, jitter)• Large file transmission• Symmetric connectivity• Security/privacy concerns
Fibre applications: smart grids
Smart meteringConnectivity requirements currently supported
by DSL/cable networksEnergy efficiency
Fibre applications: Intelligent Transport Systems
Broadband elements
Why Fibre to the Home?
• Future-proof technology• …complemented by wireless• Upload speeds - symmetric connectivity
14.25
28.44
100.57
2.60 2.56
57.45
0.00
20.00
40.00
60.00
80.00
100.00
120.00
DSL Cable FTTH
Average download speeds
Average upload speeds
Costs – National Fibre-to-the-Home P2P Network
• National P2P FTTH network• Four sectors: electricity, health, transportation,
education• Cost savings between 0.5% and 1.5% in each of
the four sectors over 10 years could justify the cost
• Potential spillovers have to be considered• Innovation!
Private investment decisions
Privaterolloutcost
Private expected
return
Yes
Privaterolloutcost
Private expected
return
No (but should socially)
Uncapturedsocial
benefits
(spillovers)
Governments increasingly step in to cover the difference
COMPETITION
Fibre deployment
Once in a generation upgradeHeavy investments involvedMarket structure of the next decade(s)Will copper-based competition remedies still be
valid?Unbundling? Wholesale? Infrastructure
competition?
FTTH current status
0% 10% 20% 30% 40% 50% 60%
Ireland
Germany
Finland
Switzerland
Turkey
Poland
Italy
Netherlands
Portugal
United States
Iceland
Hungary
Czech Republic
OECD
Denmark
Norway
Sweden
Slovak Republic
Korea
Japan
Percentage of fibre connections in total broadband subscriptions, June 2010
DSL58%
Cable Modem29%
Fibre + LAN12%
Other1%
OECD Fixed (wired) broadband subscriptions, by technology, June 2010
Total subscribers: 294 millionSource : OECD
Topology concerns
VDSL Point to multipoint fibre Point to point
Exchange Exchange Exchange
Topology and competition - unbundling
• Fibre upgrade: most critical change since copper network deployment
• “Old” competition remedies may not work now• P2P:
– Easier to share, may be “unbundled” like copper LLU– Deployments costs: studies point at 20% more expensive that
P2MP
• P2MP: – No local loop unbundling– Sub-loop “unbundling”: not always economically feasible– Other options: WDM, wholesale, Ethernet
Sources: IDATE for the FTTH Council Europe, FTTH Council North America, FTTHCouncil Asia Pacific, European Communication Committee, primary research
Country Homes Passed FTTH FTTB Main Topology % Main Topology Largest party deploying
Australia 40,000 100 0 PtMP 100% GovernmentAustria 63,000 80 20 PtP 90% MunicipalitiesBelgium 3,750 na na na na IncumbentCanada 280,000 na na PtMP na IncumbentChile 20,000 na na PtMP na IncumbentCzech Republic 195,000 20 80 PtMP 100% AltnetsDenmark 795,300 75 25 PtP 85% UtilitiesFinland 544,000 20 80 PtP 100% Incumbent(s)France 1,383,588 100 0 PtMP 55% IncumbentGermany 560,000 20 80 PtP 70% UtilitiesGreece 5000 0 100 PtP AltnetsHungary 215,000 100 0 PtMP 100% IncumbentIceland 33,000 100 0 PtP 80% UtilityIreland 16,900 80 20 PtP 95% AltnetsItaly 2,245,500 5 95 PtP 100% AltnetsJapan 46,000,000 60 40 PtMP 80% Incumbent Korea 16,000,000 20 80 PtMP 100% IncumbentLuxembourg 56,000 100 0 PtP 100% IncumbentMexico 100,000 na na PtMP na IncumbentNetherlands 662,500 90 10 PtP 90% IncumbentNew Zealand 50,000 50 50 PtMP na AltnetsNorway 381,700 100 0 PtP 100% UtilityPoland 90,265 100 0 PtP 95% UtilityPortugal 1,470,000 100 0 PtMP 100% IncumbentSlovakia 615000 38 62 PtMP 95% IncumbentSlovenia 310,000 100 0 PtP 100% AltnetsSpain 412,500 90 10 PtMP 100% IncumbentSweden 1,464,500 50 50 PtP 90% AltnetSwitzerland 212,500 100 0 PtP 90% IncumbentTurkey 200,000 100 0 PtP na AltnetsUnited Kingdom 138,000 100 0 PtP na AltnetsUnited States 19,676,200 na na PtMP na Incumbent
P2P vs. P2MP
Fibre deployment: future communications at issue?
• Fibre upgrade: most critical change since copper network deployment
• Costly investments – uncertain return• Future market structure • Multi-fold perspective:
– Socio-economic benefits– Current market structure– Wealth/density/etc.
Infrastructure competition?– 2/3 players in dense, urban areas– One at best in sparsely populated areas– Strong case for state intervention
Fibre deployment: regulatory options• No intervention:
– Re-monopolisation?– No upgrade?
• Wholesale remedies (LLU, bitstream)– Will LLU be possible? Network topology– Investment incentives?– Transition
• Facilitating deployment:– Symmetrical remedies– Ducts/conduits, etc.– Dark-fibre/open access
• Functional/structural separation (UK, Sweden) • State-funding: Australia’s NBNCo
Australia: NBNCo
• History – geography• Public funding of a National Broadband Network• Wholesale-only, open access, high-speed
broadband network• AUD 35.9 billion (gov. equity, AUD 27.5 billion)• FTTP (93%), rest (wireless, satellite)• Legislation passed in Parliament/deal with
Telstra on infrastructure take-over
• Remonopolisation…• and/or…ensuring Australia’s future?
Fibre deployment and standards (I)
Facilitates deployment: • Common protocols specifications• Avoid the risk of fragmented solution, “de facto”
standards • Guarantee interoperability• Stimulate competition• Some examples: cables, fibres, connectors, passive
elements, etc.
Fibre deployment and standards (II) Impact on competition
o Connectors: Interconnection devices/operators, Multiple fibres, allowing switching, etc.
o Passive elements Wholesale access to passive infrastructures
Examples: o France: strong support for multi-fiber, standard
connectors, symmetric obligations, access to conduits, etc.
o Japan: fibre unbundling (main terminal line, branch terminal line, single star) – only 10% of the market-focus on infrastructure competition
o Netherlands: Unbundling for ODF access
Conclusions• Broadband as the “new electricity”
• Once-in-a-generation upgrade
• Focus on competition
• No “one size fits all” solution
• Standards should facilitate deployment
Thank you
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