This document discusses policies to foster investment and accelerate deployment of next generation access (NGA) networks. It provides an overview of the very high speed broadband market, broadband policies and local authority intervention in France. It also discusses NGA policies, regulation, and public-private initiatives. The key points are that local authorities have played a crucial role in broadband expansion in France; open wireline backhaul networks are important for handling traffic growth; and a combination of legislative, regulatory, and public policy levers can be used in Europe to encourage NGA investment and competition through infrastructure sharing while addressing economic and operational concerns.

1. NGAs : which public policies to
foster investments
and accelerate deployments?
Gabrielle Gauthey – Senior Vice-President Public Affairs
Leeds - November 17, 2009

2. Summary
 Very High Speed broadband market overview
 Broadband policies and local authorities intervention in France
 Next generation Access networks policies and regulation
 Next Generation Access networks & public/private initiatives
2 | NGA policies & Public Private Partnerships | November 2009 © Alcatel-Lucent 2009 All Rights Reserved

3. 1 Very High Speed broadband market
overview
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4. Very High Speed broadband is a booming market
Number of residential subscribers worldwide Growth of FTTH/B* and VDSL** subscribers
around the world between 2008 and 2014
Source: IDATE – September 2009
 A market of 140 million subscribers in 2014 (vs. 31 million in 2008)
 Western Europe on a par with North America with more than 20 million residential subscribers
* Fiber-to-the-home (FTTH) et Fiber-to-the-building (FTTB)
 A great opportunity for Europe ** Fiber-to-the curb (FTTC) et Fiber-to-the-node (FTTN)
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5. Figures on Very High Speed broadband in Western Europe
Very High Speed deployments per types of Number of FTTH/B subscribers in key
architecture – end of 2008 European countries – end of 2008
66%
32 %
66 %
7%
24 %
9%
34 % 14 %
14 %
34%
Sw eden Italy France Norw ay Netherlands Denmark
Source: IDATE and FTTH Council Europe
VDSL FTTH/B
 FTTH/B are the prevailing architectures for Very High Speed broadband in Western Europe
 6 countries represent 81% of the installed base
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6. European FTTH market breakdown : the weight of municipal networks in access
FTTH market shares in Europe:
80.0%
60.0%
40.0%
20.0%
0.0%
ILEC CLEC Muni/Utility
2007 8.5% 21.4% 70.2%
2012 43.0% 23.0% 34.0%
Sources: IDATE & Heavy Reading, 2008
 According to forecasts, municipalities and power utilities will still have - in Western
Europe - 1/3 of fiber access market share by 2012
Note:
FTTH (Fiber-to-the-Home) = fiber to the boundary of the home living space or business office space
(FTTH Council definition)
ILEC = former incumbent monopoly telco (PTT)
CLEC = competitive or alternative telco or broadband provider
Muni/Utility = network built by municipal local authority or by a power utility
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7. 2 Broadband policies and local authorities
intervention in France
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8. The key drivers of a successful Broadband policy in France
Competition through active infrastructures has been the main driver behind
the development of broadband:
 Geographic extension of local loop unbundling has encouraged France Telecom to
equip all of its MDF (Main Distribution Frames) for ADSL
 France has joined European leaders in terms of penetration…
 …and is in first place for "triple play"
Three major drivers have made this increase in investments possible
 Dynamic operators, both incumbent and new entrants
 Regulation : LLU first, bitstream as a complement
 Local authorities intervention has been crucial in the expansion of broadband coverage
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9. Dynamic of the French broadband market
Growth of the broadband DSL coverage as of June 30 2009
access base
1999… 2002 2003 2004 2005 2006 2007 2008/2009
1st fixed-mobile
1st TV/DSL offer Convergent
offer
1st broadband/ 1st Very high speed
DSL offer 1st telephony FTTH offer
/DSL offer
100 Mb/s
512kb/s
24Mb/s
8Mb/s
1Mb/s
ADSL ADSL2+ FTTH
Evolution of broadband technologies and services
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10. French local authorities have played a crucial role in Broadband coverage
 In recent years, local authorities have played a key role in the digital
development of their regions in partnership with operators
 Arcep first impact assessment: Réseaux d'initiative publique à fin juillet 2008
(projets couvrant plus de 60.000 habitants)
Projets régionaux L.1425-1
Hors DOM
1) Etudes préalables (3)
Oise
2) Appel public à candidatures (0)
 86 projects – 53 of which are running
Val-d'Oise 3) Délégataires retenus (2)
4) Offres commercialisées (2)
CU Dunkerque
CU Dunkerque CA Valenciennes
Projets départem entaux L.1425-1
CU Arras
CU Arras
CU Arras
CU Arras
CU Arras
CU Arras
Hors DOM
Hauts-de-Seine CA Amiens
CA Caen la Mer
CA Caen la Mer
CA Caen la Mer
CA Caen la Mer
CA Caen la Mer
CA Caen la Mer SI Sipperec (Irisé) 1) Etudes préalables (10)
 2 billion € invested
CA Le Hav re
Yvelines CA Seine Eure
CA Seine Eure
CA Seine Eure
CA Seine Eure
CA Seine Eure
CA Seine Eure SI Sipperec (CPL)
SI Sipperec (CPL)
SI Sipperec (CPL)
SI Sipperec (CPL)
SI Sipperec (CPL)
SI Sipperec (CPL)
2) Appel public à candidatures (7)
Somme
Seine-et-Marne 3) Délégataires retenus (14)
Seine-Maritime Ardennes SAN Sénart (Ville Nouv elle) 4) Offres commercialisées (11)
Régie du Pay s chartrain
Oise
Manche Projets infra départem entaux L.1425-1
Calv ados Eure Val-d'Oise Meuse Moselle Hors DOM
CR Bretagne
Finistère Y v elines Bas-Rhin
Meurthe-et-Moselle 1) Etudes préalables (3)
Orne Essonne
Côtes-d Armor Seine-et-Marne 2) Appel public à candidatures (5)
CR Alsace
CA Quimper Ille-et-Vilaine Haute-Marne 3) Délégataires retenus (14)
Sarthe Haut-Rhin 4) Offres commercialisées (10)
 Major consequences :
Loiret SM Belfort Montbelliard Héricourt
SM Belfort Montbelliard Héricourt
Marchés de services départem entaux
Maine-et-Loire
CA Rennes Métropole CR Bourgogne Hors DOM
Nièv re Doubs
Cher CA Chalon Val de Bourgogne
Jura
4) Offres commercialisées (4)
Indre
CA Vannes Vendée
MARTINIQUE
MARTINIQUE
MARTINIQUE
MARTINIQUE
 Less expensive coverage of rural areas
CA Tours CU Le Creusot Montceau
Charente-Maritime Loire
CA Angoulême CR Limousin CR Auv ergne
CA Voiron
CA Perigueux
CA Clermont Ferrand
CA Clermont Ferrand
CA Clermont Ferrand
CA Clermont Ferrand
CA Clermont Ferrand
CA Clermont Ferrand
REUNION
REUNION
REUNION CU Bordeaux Ardèche
REUNION
REUNION
REUNION
 Expansion of LLU
Lot
CR Aquitaine
Lot-et-Garonne
Av ey ron
CA Bay onne Anglet Biarritz
Gard
Tarn
Hérault
Haute-Garonne
Py rénées-Atlantiques
 Fostering of local operators
GUADELOUPE
GUADELOUPE
GUADELOUPE
GUADELOUPE
GUADELOUPE
GUADELOUPE
Ariège
CA Pau
Py rénées-Orientales CA Aix en Provence
CA Aix en Provence CR Corse
CU Grand Toulouse
CA Sicov al
CA Sicov al
CA Sicov al
CA Sicov al
CA Sicov al
CA Sicov al CA Castres Mazamet
GUY ANE
GUY ANE
GUY ANE
GUY ANE
GUY ANE
GUY ANE
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11. Impact of local authorities backhaul networks on unbundling in France
37% of French central offices are unbundled through
Local Communities backhaul networks
20,9 M households
CO unbunling : local
988 4,0 M households
community backhaul
network
CO unbundling : alternative
carriers backhaul networks 773 2,4 M households
+ France Telecom dark
fiber rental
CO unbundling : alternative
carriers backhaul networks 913 14,4 M households
Number of unbundled CO’s according to backhaul network ownership
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12. Open Wireline backhaul networks are key to handle both mobile and fixed
access traffic growth
Typical telecommunications network architecture
Role of backhaul networks:
Cost effective coverage of
medium and low density areas;
Stimulate competition and
innovation – on DSL first and fibre
next;
Anticipate bandwidth demand
increase for all access
technologies (fibre, LTE,
Wimax,…);
Backhaul networks are future
proof investments - can be easily
funded through PPPs;
Enhanced connectivity for
public services (schools,
hospitals, universities,…) and
business parks
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13. 3 Next generation Access networks
policies and regulation
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14. Which competition model for NGA ? How to promote investments?
No doubt Very High Speed broadband is the technological evolution in the medium term
 To meet growing demand for content
 To assist the concomitant rise in speeds
All countries are facing the challenge. Some are ahead like Japan and the US. In the EU
major players have announced fiber deployments
Investments are huge – 10 to 20 times copper broadband - and will need to be spread over
several years
 Several hundred euros per connectable home
 Investments will happen differently according to country specificities and legacy
networks topography (FTTN, FTTH)
The questions are:
 How to promote investments and allow reasonable return?
 How to adapt regulation and public intervention to market, risk and policy driven areas?
 How to prevent regression of competition and even foreclosure of the market?
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15. NGA deployments : investment model according to geographical segmentation
Private investments will prevail in “market driven” whereas public
intervention will be needed in low density “policy driven” areas
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16. Europe trends for NGA roll-out :
Public Policy levers to foster NGA investments and PPPs
Legislative lever in many countries (France, Spain, Italy, Portugal, …)
 Sharing of the fiber last drop through mandatory agreements between operators and landlords
 “right to fiber”
 Mandatory fiber pre-cabling for new buildings
Regulatory lever
 Regulator’s concern is to make sure competition is preserved on the active part of the network to
stimulate differentiation and innovation
 Asymmetrical regulation (duct access)
 Symmetrical regulation (last drop and in house wiring)
 Bitstream as a complement in low density areas
Public policy lever
 Economy recovery package
 Digital Economy plans
 Intervention of local authorities (PPPs)
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17. How to encourage investments and competition through
active infrastructures while tackling economical and operational concerns?
The last drop : an essential infrastructure- but where from?
Sharing of in-house wiring at the level of the building and access to ducts alone will not be
sufficient to guarantee sustainable competition in low density areas:
 it is useless and too costly to roll out serial networks inside and towards each building
 the natural monopoly is not limited to the fiber within the building
 risk of an irreversible situation
Having a point of sharing higher up in the network raises a few issues :
 in terms of technology, it has to be compatible with different technologies : PON and point-to-point
 the physical location of the point of sharing depends of the topography, of the density and of the architecture of the
operator’s network
point of sharing higher up in the
network
copper copper
MDF SC
ducts ducts
availability of ducts offer
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18. 4 NGAs & public/private initiatives
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19. How to combine public and private initiatives?
 Transition from broadband to Next Generation Access networks is a revolution
which represents a dramatic change in the level of investments: 250 to 300 B€
will be required to roll-out NGA in the EU, 23 B€ in Australia.
 Risk of broadening the digital gap between regions is high and this is why many
nations have decided to put this issue high on their recovery agenda and digital
economy plans.
 From a policy perspective the key driver of NGA success is a close collaboration
between all stakeholders -incumbents and new entrants, national and local
government, vendors and users.
 From an NGA investment perspective, Public Private Partnerships are gaining
worldwide traction both at national and local level if they allow :
 Anticipation of the future by rolling-out of backhaul capacities
 Cost-effective roll-outs in lowering market entry barriers, preserving diversity and innovation
 More competition and differentiation
 Acceleration of NGA coverage in grey and white areas
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20. South Yorkshire Digital Region
SYDR
Thales, Alcatel-Lucent and Kingston
Communications
Alcatel-Lucent is the design authority
Alcatel-Lucent also responsible for all
equipment, network management platforms
one of the largest public sector-led open OSS and majority of BSS, installation,
broadband infrastructure initiatives in the commissioning, and maintenance of the
world. network
 Covering the urban and rural populations of 54 exchange sites, 1589 Street Cabinets
Sheffield, Doncaster, Barnsley and Rotherham
VDSL based, but with 1,200 km of fibre
 a brand new, high speed open-access (700km new dig)
infrastructure
Multiple Service Providers to the same end
Covers majority of homes and businesses in user
the region - some 1.2 million people.
“Businesses in South Yorkshire will be able to increase their competitiveness, develop new products
and business models and use IT in a variety of different ways as a result of this initiative – something
we can be proud of as a catalyst for this project.” Trevor Shaw, Executive Director of Finance for
Yorkshire Forward
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21. The Baltic Business Quarter – a model for the future for Gateshead Council
Gateshead technology innovation
 A unique business model for the UK
 Designed from the start to give the highest
levels of built-in resilience
 Capable of offering flexible and tailored
services
 Fair and open access to all service providers
 Alcatel-Lucent to deploy a blown fibre  A compelling business case for everyone
solution to link individual buildings
 The BBQ network to operate as an Open Access
 Services with bandwidths of up to 10Gb/s
available within the business park and up to Network & to provide last mile backhaul
2.5Gb/s off park services
“The launch of this new partnership is an exciting and ground breaking step
forwards in our continuing drive to bring more top quality businesses and
jobs to Gateshead” Councillor Mick Henry, Leader of Gateshead Council
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22. Overview of Recovery, Digital Economy plans & Public Private initiatives
worldwide
EU recovery plan
Achieve 100% broadband coverage in EU by 2010
1 B € earmarked for rural broadband
Creation and/or upgrade of access, backhaul and passive
infrastructure
China’s recovery plan
4 Trillion RMB 09-10
ICT included in pillar industries program
Australian National Broadband Network
American Recovery and Reinvestment Act Greek FTTH Public-Private Partnership
100 MB/s to 90% of subscribers
7.4 B $ to provide broadband to rural, 2.1 B€ investment
43 B A$ ( 23 B€)
unserved and underserved areas Target : 2 million homes passed by 2012
New Zealand “Broadband Investment Initiative”
4.5 B$ for electric grid modernization Digital Britain
(“smart grids”) 1.5 B NZ$ investment plan announced in March
•2 Mb/s universal broadband access service in 2012 09
2 B $ for health IT programs
•200 M£ NGA fund is created to speed-up deployments
29 B $ for transportation programs
(highways safety, fraffic monitoring,...) Italian broadband plan
800 M€ to be allocated to achieve broadband coverage in Italy
French digital plan
750 M€ will be invested by CDC to roll-out shared optical loops
+ German BB plan and coming bradband plans in Poland,
Russia,...
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23. www.alcatel-lucent.com
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