[1st-mile-nm] Latest OECD Report

[Richard Lowenberg]

The latest OECD broadband stats are now available with some very
interesting analysis of issues related to future FTTH networks.

Latest OECD Broadband standings
<http://www.oecd.org/sti/ict/broadband>
<http://www.oecd.org/dataoecd/32/58/40629032.pdf main findings>
<http://www.oecd.org/dataoecd/32/57/40629067.pdf full report>

* The United States is the largest broadband market in the OECD with
69.9 million subscribers. US broadband subscribers represent 30% of all
broadband connections in the OECD.
(I believe that the U.S. has not moved from its ranking at 15th among OECD
countries.   rl )

The report also notes that:

Governments need to promote competition and give consumers more choices.
They should encourage new networks, particularly upgrades to fibre-optic
lines.

Governments providing money to fund broadband rollouts should avoid
creating new monopolies. Any new infrastructure built using government funds
should be open access - meaning that access to that network is provided on
non-discriminatory terms to other market participants.

The regulation of new broadband connections using fibre to the end user
will likely be the subject of considerable debate in the next few years. The
pressing question is whether fibre optic cables extending to homes,
buildings and street curbs should be regulated in the same way as
traditional copper telephone lines. As new fibre connections may fall
outside existing regulatory frameworks, a re-evaluation of existing policies
may be required. Regulators should consider whether network architectures
still relying on portions of the historical copper telephone infrastructure
should be treated differently from new all-fibre networks.

Regulators and policy makers are increasingly concerned about fostering
competition on next-generation broadband networks. Some are examining the
functional separation of the dominant telecommunication provider into two
units, one which handles the physical lines and the other which provides
retail services over the lines as a way to ensure fair and
non-discriminatory access to "last mile" infrastructure. The results of
functional separation, particularly on investment, are still far from
certain and warrant significant research. Regulators should actively
consider other policy options at the same time, which may provide similar
outcomes - such as requiring operators to share the internal wiring in
buildings.

Governments need to actively look for ways to encourage investment in
infrastructure. Civil costs (e.g. building roads, obtaining rights of way)
are among the largest entry and investment barriers facing telecommunication
firms. Governments should take steps to improve access to passive
infrastructure (conduit, poles, and ducts) and co-ordinate civil works as an
effective way to encourage investment. Access to rights-of-way should be
fair and non-discriminatory. Governments should also encourage and promote
the installation of open-access, passive infrastructure any time they
undertake public works.

Governments should not prohibit municipalities or utilities from entering
telecommunication markets. However, if there are concerns about market
distortion, policy makers could limit municipal participation to only basic
elements (e.g. the provision of dark fibre networks under open access
rules).

Maintaining a level-playing field and reducing anti-competitive practices in
the face of high network effects and to promote consumer choice is crucial,
i.e. in particular considering the increased use of walled garden
approaches, as well as cross-industry mergers and acquisitions. With
problems such as vertical integration, lock-in of consumers in certain
standards, and poor access to certain content, an environment of contestable
markets should be created where small and innovative players can compete.
Further analysis of recent trends and impacts of concentration is also
needed. When necessary, anti-trust and other policies have the means to
restore competition. . It will be crucial to monitor and analyse the new
market structures of broadband software, service and content providers in
the next few years. Governments have a lot of experience when it comes to
ensuring efficient telecommunications markets. However, when it comes to
broadband applications, services, software and content, this is mostly new
territory. It is important in the coming years that policy makers understand
the impacts of new broadband market structures and question whether current
policy approaches for ensuring competition actually work.

Governments must intensify efforts to ensure there is sufficient R&D in the
field of ICT, so that the economic, social and cultural effectiveness of
broadband is guaranteed. The role of government and business in basic R&D
may have to be reaffirmed. Any government neglect in this area should be
monitored as well as examples of inadequate policy co-ordination, with the
aim of increasing the efficiency of broadband-related R&D.

Strengthening broadband research networks (grids), and facilitating
international co-operation through such networks and collaborative research
should be a policy priority.

*  Denmark, the Netherlands, Iceland, Norway, Switzerland, Finland, Korea
and Sweden lead the OECD with  broadband penetration well above the OECD
average, each surpassing the 30 subscribers per 100 inhabitants threshold.

The OECD report also noted that several countries are taking the lead in the
next generation of broadband deployment - superfast fibre networks. About 40
per cent of Japan's broadband connections are fibre, with South Korea coming
second at 34 per cent. Most of the OECD - 18 countries, have not yet begun
rolling out fibre.


-- 
Richard Lowenberg
1st-Mile Institute
P.O. Box 8001, Santa Fe, NM 87504
505-989-9110;   505-603-5200 cell
rl at 1st-mile.com  www.1st-mile.com

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