FTTH Conference 2011 Workshop Economic and Social Implication of Fiber Derployment Agustin Diaz OECD
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FTTH Conference 2011 Workshop Economic and Social Implication of Fiber Derployment Agustin Diaz OECD

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FTTH Conference 2011 Workshop Economic and Social Implication of Fiber Derployment Agustin Diaz OECD

FTTH Conference 2011 Workshop Economic and Social Implication of Fiber Derployment Agustin Diaz OECD

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FTTH Conference 2011 Workshop Economic and Social Implication of Fiber Derployment Agustin Diaz OECD FTTH Conference 2011 Workshop Economic and Social Implication of Fiber Derployment Agustin Diaz OECD Presentation Transcript

  • Economic and social implications of fibre deployment FTTH Conference Workshop: Standardisation and Economic Impact Agustin DIAZ Milan, 8 February 2011The 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 metering Connectivity requirements currently supported by DSL/cable networks Energy efficiency
  • Fibre applications: Intelligent Transport Systems
  • Broadband elements
  • Why Fibre to the Home?• Future-proof technology• …complemented by wireless• Upload speeds - symmetric connectivity 120.00 100.57 100.00 80.00 57.45 Average download speeds 60.00 Average upload speeds 40.00 28.44 20.00 14.25 2.60 2.56 0.00 DSL Cable FTTH
  • 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 Governments increasingly Uncaptured step in to cover the difference social benefits (spillovers) Private expected PrivatePrivate Private return rolloutrollout expected cost cost return Yes No (but should socially)
  • COMPETITION
  • Fibre deployment Once in a generation upgrade Heavy investments involved Market structure of the next decade(s) Will copper-based competition remedies still be valid? Unbundling? Wholesale? Infrastructure competition?
  • FTTH current status Percentage of fibre connections in total broadband subscriptions, June 2010 Japan KoreaSlovak Republic Sweden Norway Denmark OECDCzech Republic Hungary OECD Fixed (wired) broadband subscriptions, by technology, June 2010 Iceland United States Portugal Cable Modem Netherlands 29% Italy DSL Poland 58% Turkey Switzerland Fibre + LAN 12% Finland Other Germany Total subscribers: 294 million 1% Source : OECD Ireland 0% 10% 20% 30% 40% 50% 60%
  • Topology concerns Point toVDSL Point to point multipoint fibreExchange 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
  • P2P vs. P2MP Country Homes Passed FTTH FTTB Main Topology % Main Topology Largest party deploying Australia 40,000 100 0 PtMP 100% Government Austria 63,000 80 20 PtP 90% Municipalities Belgium 3,750 na na na na Incumbent Canada 280,000 na na PtMP na Incumbent Chile 20,000 na na PtMP na Incumbent Czech Republic 195,000 20 80 PtMP 100% Altnets Denmark 795,300 75 25 PtP 85% Utilities Finland 544,000 20 80 PtP 100% Incumbent(s) France 1,383,588 100 0 PtMP 55% Incumbent Germany 560,000 20 80 PtP 70% Utilities Greece 5000 0 100 PtP Altnets Hungary 215,000 100 0 PtMP 100% Incumbent Iceland 33,000 100 0 PtP 80% Utility Ireland 16,900 80 20 PtP 95% Altnets Italy 2,245,500 5 95 PtP 100% Altnets Japan 46,000,000 60 40 PtMP 80% Incumbent Korea 16,000,000 20 80 PtMP 100% Incumbent Luxembourg 56,000 100 0 PtP 100% Incumbent Mexico 100,000 na na PtMP na Incumbent Netherlands 662,500 90 10 PtP 90% Incumbent New Zealand 50,000 50 50 PtMP na Altnets Norway 381,700 100 0 PtP 100% Utility Poland 90,265 100 0 PtP 95% Utility Portugal 1,470,000 100 0 PtMP 100% Incumbent Slovakia 615000 38 62 PtMP 95% Incumbent Slovenia 310,000 100 0 PtP 100% Altnets Spain 412,500 90 10 PtMP 100% Incumbent Sweden 1,464,500 50 50 PtP 90% Altnet Switzerland 212,500 100 0 PtP 90% Incumbent Turkey 200,000 100 0 PtP na Altnets United Kingdom 138,000 100 0 PtP na Altnets United States 19,676,200 na na PtMP na Incumbent Sources: IDATE for the FTTH Council Europe, FTTH Council North America, FTTHCouncil Asia Pacific, European Communication Committee, primary research
  • 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