Public-private models of building fiber-to-the-home (FTTH) broadband infrastructure can promote competition and reduce the investment burden, according to Francisco Feuntes, senior business development manager with Cisco's service provider group, who noted that a variety of new business models are appearing in Europe that could provide case studies for Asian operators and governments.
Speaking at an FTTH seminar in Singapore last week, Feuntes said that while Europe lagged behind both the United States and Asia in terms of the scale of fiber rollouts and the number of subscribers, he noted that it had more involvement from "alternative operators" and more municipal involvement, either through local governments or utilities.
Despite Europe's comparatively low subscriber numbers, there were some 140 fiber-to-the-premises (FTTx) projects there in 2006. And of these, 92 (around 66 percent) involved municipalities and/or power utilities, according to data from the FTTH Council Europe. Alternative operators and housing companies accounted for another 35 percent of projects, with incumbents only involved in 12 projects (8.6 percent) throughout Europe.
Feuntes said that municipal involvement had been a catalyst to getting projects started. "If you don't have a catalyzer, the incumbents will just continue to sweat their assets," he said, noting that catalysts in other markets, such as regulatory relief for incumbents or competitive pressures, are not present in much of Europe.
Despite the lack of interest in FTTH from the established operators, the public sector sees the value in fibre infrastructure as a way to boost economic activity. Feuntes likened fibre infrastructure to the situation with electricity 100 years ago, where communities would also take the initiative to ensure grid coverage.
"Local communities are worried about competitive threats from other communities," said Feuntes, who pointed to a number of different models for public-private partnerships. These included authorities making it easer to allow access to dark fibre, investing in projects themselves or investing in an operator.
He used the example of Free in France, which is spending around 1 billion euros (US$1.3 billion) until 2012 to cover 4 million households. In this case the authorities allowed Free to use the city sewers as a way to cost-effectively lay the fiber infrastructure, which will then be open for other network operators to use. He also noted that France Telecom has since reacted by outlining plans for its own FTTH rollout.
Other examples included CityNet in Amsterdam, which used a public-private partnership for the dark fiber, but which is then open to multiple service providers, and Reykjavik Energy (RE) in Iceland, which is owned by municipalities and can synchronize things such as digging with other government departments.
According to Feuntes, open access is a common theme in nearly all of the European rollouts, something he says is critical to fostering innovation.
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