In a post titled "
National Broadband Networks:Regulation, Universal Service, Competition & Monopolies," I had stated that while most of these these public/US funded OFC networks are slated to be open access networks, care should be taken to avoid displacing private investment and initiative which may have been forthcoming with the right regulatory environment or incentives. Use of public funds/universal service funds should ideally be restricted to areas where markets have failed and logically the best course is to bid out such network provision to allow a level playing field between private and public operators. This may lead to a more fragmented approach than one integrated network but contractual obligations can ensure seamless connectivity between and non-discriminatory open access to backbone networks owned by various entities. (see previous blog post) Such a PPP approach rather than publicly/incumbent owned networks may prove to be more competition and growth friendly in the long run even if it entails more effort in the short term. The use of public funding in pockets where no operator will venture or where effective competition is unlikely in spite of effective regulation (akin to European Commissions white or grey areas) is however justifiable.
The fact of the matter is that in many countries we are now rolling out state supported national broadband networks which often rely on the incumbent. My view on this is we should be careful about the trade off between short term expediency (time, cost and effort saved) and long term imoact by way of competition, innovation and growth.
"Broadband networks and services are more than simple infrastructure – they represent a set of transformative technologies that promise to change the way we communicate, work, play and do business. It is essential that every country takes broadband policy into account to shape its future social and economic development and prosperity, emphasizing both the supply and demand sides of the market. Further, it is crucial to adequately evaluate the potential alternatives to be implemented in order to encourage private sector investment. A “one size fits all” policy to broadband roll-out could have negative implications for the ICT market. Finally, a detailed cost-benefit approach should be adopted when evaluating different public policies and regulatory options to promote the growth and development of broadband in different countries around the world."
In this context, in the same post I had placed links to comparisons of Australia's NBN with New Zealand, South Korea and Singapore's national broadband network efforts.
A comparison with USA's efforts can be seen at "
NBN vs. the world: The American experience." It is accepted that USA relies on a more hands off approach favouring competition and that Australia is more dependent on its incumbent Telstra. Its interesting to note that NBN's Myers is quoted as saying that
the U.S. market structure has caused a problem of its own “It’s actually resulting in very much a patchwork network across the states.” Different companies deploy different technologies from each other, and even within their own footprint offer different speeds in different areas, he said. “There’s no consistency across the marketplace.”
Another viewpoint of Rod Tucker, a professor at the University of Melbourne is that,
“Verizon has rolled out an extensive fibre-to-the-home network in the US,” but hasn’t seen much take up, ..."This is because the Verizon fibre network runs alongside competing HFC and ADSL networks. The lesson that Australia can learn from this is that facilities-based competition can be inefficient."
I donot agree with this conclusion at all and in fact I believe relying on a single technology and single network is not prone to the same fallacious "telecom as a natural monopoly" argument that we encountered in the era of copper line access. It will most probabaly lead to the same regulatory headaches in the future.
"[Korea] developed e-health, e-learning and e-government services when it began constructing its broadband networks... which allowed the government to pinpoint early on where problems were and commercialise the technology earlier. This allowed citizens to become accustomed to online services such as online banking and e-trade."
Most importantly,
"The Korean government has also put in place a competitive environment to allow as many broadband operators as possible...We’re seeing a very aggressive campaign from their government... promoting and making broadband networks available. One thing that we can learn is that there is a place for government to put into place policies and best practice to ensure that operators are able to make available the services that the customers want"
The Government in my view should do just that, promote through regulation and policy rather than get involved in actual roll outs.
Another article "
NZ gov seeks submissions on telco regulation" describes the proposed review of New Zealand's Telecommunications Act 2001 which in its first phase will examine will examine "
whether the current regulatory framework is adequate for New Zealand’s migration from legacy copper infrastructure to fibre networks and discuss pricing components of the current regulatory framework."
What I liked was the focus on "competition for end-users, how the commercial interests of access providers and seekers can be promoted and how to effectively encourage investment for the long-term benefit of end-users." and " innovation in the telco market and deregulation in instances where there is sufficient competition."
India needs to pay attention as we often review telecom policy from the technology end rather than focus on consumer benefits and work backwards. We also rarely commence our analysis with competition as the desirable end result.
