Commission Ignoring Next-Generation Fiber Broadband, Industry Says

NGN is catching on in the rest of the world, said FTTH Council Europe Chmn. Hartwig Tauber. In the U.S., Verizon was expected to complete deployment of FTTH to the first million homes by the end of 2004, and to another 2 million this year. SBC announced Sept. 12 it would roll out next-generation broadband to 18 million homes by 2007. And Japan’s NTT said in Nov. it would deploy FTTH to 30 million subscribers by 2010, the Council told the EC.

But Europe lacks both an appropriate market dynamic and a govt. strategy for NGNs, Hartwig said. Japan’s “u Japan” strategy -- for “ubiquitous” -- is carried out by the govt., he said. In the U.S., competition in the “last mile” is forcing Baby Bells to respond to the threat from cable operators. Only 2 European countries -- Belgium and the Netherlands -- have widespread cable TV, Hartwig said. Even in the U.K., cable TV passes less than 40% of households and is available only in the most-populated areas, he said.

If the EC puts NGNs in its political sights, they will happen, Hartwig said. When the Commission decided to focus on broadband the technology was widely available less than 3 years later, he said. There’s no other technology that can provide gigabits to the home for flexible teleworking, telemedicine, e-learning and other activities, he said. The EC doesn’t seem to think NGN is important for competitiveness, he said, but the Council believes it’s critical. The fact that the U.S. and Japanese govts. have acted to promote it is proof, he said.

The FTTH Council called on the EC to: (1) Create a political vision on the need to make next-generation broadband happen. (2) Encourage member states to assess whether the markets in their countries are likely to lead to a “natural transition” to NGNs or whether public policy action is needed. (3) Assess whether the existing regulatory framework allows for NGN to happen or whether it needs tweaking. (4) Encourage member states to use structural funds to deploy NGN infrastructure. (5) Adopt clear guidelines on state aid rules and publicly funded broadband projects to end the current legal uncertainty stalling various projects around Europe.

EICTA interpreted the EC’s omission of the promotion of broadband access and NGNs from its e-agenda as “a sign that the Commission no longer regards the ICT infrastructure as something of crucial importance for Europe’s competitive situation, or that market forces alone would guarantee a competitive outcome.” That would be a “serious misinterpretation of the international situation,” EICTA said. The organization urged the European Council to establish the political objective of “broadband for all” by 2010, harnessing all possible wireline and wireless technologies to achieve the goal. Aiming for 50% broadband accessibility -- recommended by a recent report on making Europe the world’s most competitive knowledge-based economy -- won’t do, EICTA said, because the U.S. and other trading partners are already launching NGNs.

There’s a “key cluster missing” from the EC communication -- the need to further develop underlying networks, ETNO said. Technological, service and future market trends all point to the need for massive investment in networks to deliver needed network and services convergence, upgrade existing networks and develop NGNs, the group said.

ETNO members are “ready to invest in generalised and high-speed broadband access for all,” including NGNs, but “instead of the proper investment incentives, operators are facing regulatory constraints and barriers,” ETNO said. Telcos urged the EC, as its top priority, to make sure the investment climate favors the development of new networks by refocusing its e-communications regulatory policy. In particular, it said, the EC shouldn’t hamper investment in new infrastructure and services, and on upgrading existing networks for NGN, by imposing “ex ante” (sector specific) regulation.

New entrants are concerned about the lack of competition in e-communications markets. The success of Europe’s information & communication technology (ICT) strategy post-2005 “will depend in very large part on the ability to foster ever more profound competition within the electronic communications networks and services markets,” said ECTA. The group wants the EC to back “disruptive technologies” such as VoIP as a way of shifting to a more sustainable competition model. However, it warned that regulators should “remain wary,” when analyzing disruptive-technology markets, of incumbents’ claims that the new services are hurting them.

ECTA opposes any move that could prevent its members from offering alternative services, said Regulatory Affairs Mgr. Tom Kiedrowski. ECTA also believes competition issues don’t change “just because you move from copper to fiber,” Kiedrowski said. If, as the FTTH Council Europe has said, fiber represents less than 6% of the total cost of a new access network -- but the expenses of opening trenches and laying ducts for deployment of fibre can represent up to 80% -- that bottleneck will exist whether incumbents move to fiber or not, he said.