| EU ?Accidentally Offering Telcos Veto Over Fiber |
| Tuesday, 09 June 2009 08:36 |
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The mistake is that they treat ADSL2+ as though the "up to 24 megabit" promise were meaningful. In fact, the median speed on a typical ADSL2+ network is 1 meg up, 5-10 meg down, based on distance. It simply isn't the same thing as a high-speed NGN, if ADSL2+ is installed - or possibly being installed in the next five years - they insist "the aid should not cover the last mile access segment, that is the segment connecting the end user’s or business premises to the Main Distribution Frame." Since the great bulk of the cost of a high-speed network is the last mile, that's effectively preventing aid to any fiber to the home or curb network. It's likely this is something that went in from a bureaucrat who didn't realize that ADSL2+ is not enough to offer the advanced services they talk about in the report and that forbidding any funding to the last mile in practice was forbidding anything meaningful to the entire project. This may be ordinary dirty politics, but equally possible is that some lawyer or economist wrote this who didn't understand networks.That makes sense because the preceding pages provide an argument why high-speed networks are crucial and why support may be appropriate. Errors about technology and networks are common in the U.S. - no one near the top of the FCC has any technical background, and nearly every major report or decision is replete with errors, especially since Pepper left. The latest rural broadband report had a figure for the cost of deploying DSL that is much too high and a figure for economic benefits that had been widely discredited and was obviously a mistake. OFCOM to my dismay is also often ill-informed. There are some very good people at the EU, so this one surprised me. There's a second major error that fortunately is harmless. The report assumes that two networks are sufficient competion for most consumer benefits. Two networks are better than one - Verizon built FiOS because Cablevision was taking too many customers - but prices where 4-7 carriers compete tend to be 20-40% lower than where 2 dominate. Fortunately, LTE is coming so quickly most areas will have two wireless choices reasonably soon that deliver 5-10 megabits and will complete for low end broadband. High speeds - think 50/20 and up - are unlikely to see more than two networks no matter what, and in most places will require regulation if you don't want monopoly-like pricing. Any European consumer can file comments with a simple email to comp-broadband-guidelines@ec.europa.eu. Copy this freely if you like, or write your own comments. You can do that in a minute or three, and I believe the senior officials are already hearing they made a mistake. The paper is at http://bit.ly/eu-anti-competition and here's the paragraph in question • For existing (basic broadband) black areas, where existing operators already provide advanced basic broadband networks (such as ADSL2+) the aid should not cover the last mile access segment, that is the segment connecting the enduser’s or business premises to the Main Distribution Frame. This may also Thanks to David Gross, now at Wiley, Rein, for the pointer to the EU document. |
A telco can block government aid to a fiber build anywhere they have cable competition, based on the next to last paragraph (below) of the current Consultation on the Commission's Broadband Guidelines on the application of EU state aid rules to public funding of broadband networks. The general argument of the document is sensible: don't provide government subsidies where there is reasonable competition. They split the argument into two parts: broadband in general and "Next generation networks," also sensible, suggesting that NGN networks are a different service that needs competition as well.
