Saturday, December 5, 2009

Sweden: A Model for the Broadband Future?

Sweden’s telecoms regulator recently issued a report detailing how openness in broadband infrastructure affects competition, and I thought it would be good to highlight since the FCC is embarking on a similar effort focused on the wireless industry. Sweden is a leader in broadband penetration, has some of the lowest average monthly high-speed Internet costs, and is boosting its fiber penetration, according to data from the Organisation for Economic Co-operation and Development. Most of the 134-page report is in Swedish, but the English abstract provided a good framework for thinking about competition in broadband.

This report takes the market stakeholders as its starting point and is structured around a value chain for the production of broadband-based Internet access and services. The value chain is divided into five levels — natural resources (use of and access to land, ducts and spectrum), infrastructure (passive cables and masts), transmission (equipment for transportation of bit-streams), IP/Internet (equipment for traffic direction and IP addressing) and content and services (content, services and end user equipment). The report identifies — on each level of the value chain — challenges to openness.
Access to dark fiber is a key roadblock to openness and thus, innovation, the report found, and suggests that the government take a complementary role in promoting a fiber infrastructure. It also suggests that the lock-in periods and high fees for terminating a broadband contract slow innovation because unhappy consumers can’t “vote with their feet.” The final roadblock is a lack of spectrum for mobile broadband access. These issues are all important today in the U.S., so if anyone on Julius Genachowski’s team reads Swedish, it’s probably worth picking it up.

Reply
Richard Bennett
Thursday, December 3 2009
Earlier this week, I had the privilege of participating at an “Openess” discussion in Brussels at the behest of the Swedish telecoms operator, Telia-Sonera. One advantage that Sweden has over most other countries is an innovative operator who happens to be committed to enhancing the opportunities for innovation and widespread deployment of next-generation network services, is looking beyond the telecom era, and fully embracing the all-IP future in which telephony is software.

It’s also quite nice for high-speed broadband that so many Swedes have chosen to live in high-rise buildings in Stockholm, thereby ensuring that the costs of optical interconnection are among the lowest in the world. Koreans have been similarly prudent.


Reply
Anders Comstedt
Saturday, December 5 2009
Mr Bennet makes a few interesting observations, but unfortunately the conclusions are based upon a mix of false logic. True, population density is THE main factor, more important than purchasing power etc. We can also agree upon that Telia was one of the earliset to transform from the traditional PTT style (ATT/Ma Bell style for US readers) to what they are today. Where Mr Bennet totally misses the mark are the rest of his reasoning and conclusions. The easy thing, and likely the main reason for the FCC to seriuosly considering looking deeper and more at Sweden than any other country in the OECD is related to, yes, population density. With an average population of 20 per sq km, vs 200 for EU in average, his remark re “so many Swedes have chosen to live in high-rise buildings in Stockholm” is not only misleading but blatantly wrong. The critical element is instead that muni driven fiber deployment has taken place in +190 of the 292 local administrations, enabling competition.

As for the reasons why Telia is more apt than several of its siblings, FT, DT et al, I can only refer to competitive pressure. This is a much more complex reasoning than could be expanded upon in a short comment, but it is still a fact that not even the laggards in the PTS can neglect this anymore. They are now playing catch up, not leading the way. Myths around infrastructure competition are crumbling, a common open fiber infrastructure is unavoidable. It is just a matter of how. Telia knows this too and are playing a careful, controlled retrenching game maximising its position as far as possible under the slow policy changes they like to see and lobby for in Brussels. Most likely, Telia’s infrastructure arm, Skanova, will soon be at arms length and consolidating lots of local fiber builds.

I trust your big telco sponsored stay in Brussels was to your liking and fitted you view of the world. Most welcome to see more of the realities behind the EU, and not least Swedish, transformation of the telecom market.

Source:gigaom.com/

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