Leveraging a Framework for Infrastructure Sharing to Speed Broadband Deployment

This fourth installment of the multi-part series on the granularity of the recent white paper done for Nokia (News - Alert) by Diffraction Analysis, “Government broadband plan: 5 key policy measures that proved to make a difference.  In the previous posting the focus was on public investment in access.  This week the deeper dive focus is on a framework of infrastructure sharing.

Sharing cuts cost and speeds deployment

This is an instance where there is true measurable short-term impact.  In fact, as the white paper notes, and can be seen in the graphic below, governments whose national broadband plans include a regulatory framework for infrastructure sharing show a marked improvement in just a few years in the proportion of households with Internet access.  And, the longer it is in place the wider the gap between countries that encourage sharing and those that do not grows. 

In fact, as can be seen from the comparison, it is almost as if sharing is the equivalent of stepping on the accelerator.  It also provides an even bigger bang for the buck than public access investments.

The case studies that prove the point are Brazil and France. The results are impressive and speak to the point that cooperation on the sharing, even in hotly competitive markets, can be extremely beneficial for all involved.

Sharing in Brazil

In 2012, Brazil’s telecommunications agency, Anatel, approved the General Plan for Competition to stimulate competition.  Part of the plan was to obligate dominant carriers to allow smaller operators to access such things as local access, local and long-distance transport, and passive infrastructure to speed the development of competition and spur user adoption.  Based on a unique platform created, the Brazilian National Wholesale Trading System (SNOA), which functions as a virtual trading exchange for fair treatment of significant market powers (SNPs) and their non SNP competitors that is funded by the SNPs but has a board with equal representation to assure non-discrimination, the results since implementation in September 2013 have been impressive.  By April of 2015 more than 34,000 requests had been recorded. 

In addition, what was good for the fixed networks also was thought to be good for mobile operators.  In April of 2015, the “Antenna Law” was passed to enable fair sharing of network antennas in urban areas, and have the dominant mobile provider share their excess capacity.   While too early to confirm, the regulators believe that the mobile sector should mimic the results of what has already happened in the fixed network arena.

 Nokia cites as the key factors for success. 

• Focus on real entry barriers: costly infrastructure (ducts, access network) and players with significant market power
• Implementation of processes and platforms to facilitate communication between partners

They could have added that the “communications between partners” was not just about sharing physical assets, but that their communications on the board established to assure equitable treatment has also been a key for success. 

Sharing in France

The French government released its national broadband plan — Programme National Très Haut Débit (PNTHD) —in 2010, followed in 2013 by an update — Plan France Très Haut Débit (PFTHD).  As noted in the white paper, the initial goal was local loop unbundling in general, but the PNTHD update included new objectives for the deployment of FTTH networks:

• Stimulate the investment of private operators where the deployments are deemed profitable
• Support projects led by public authorities elsewhere.

The launch of the PNTHD was accompanied by regulatory measures to reduce the duplication of infrastructure where it was not deemed necessary. These were deemed to be:  in dense areas (mainly cities with more than 100,000 inhabitants) where the part of the network within buildings has to be shared; less dense areas where the last mile is shared between operators from the optical distribution frame; and in areas where the low density deters private operators from investing, local authorities invest in open access networks, with some state subsidies.

Other regulations regarding specifics on what was to be shared were also promulgated on a variety of duct sharing and maintenance issues.  The operators (the incumbent France Telecom (News - Alert), and to a lesser degree two of its competitors) committed to cover 57 percent of the population despite the fact that only about 20 percent of the population lives in the denser more profitable areas where obviously new entrants are most interested in seeking customers. 

The white paper does not provide details on how close the competitors have come to meeting their goals. However, as visitors to France are aware, in the major urban areas there are plenty of service providers to choose from at a number of price points, and this would not be the case without sharing having been mandated.  And, reflective of the chart at the top, and the latest subscriber situation regarding broadband in France, the plan is working.

Next up, the impacts of government policies that encourage inclusive/social offers.