Europe - regulating fibre

EC Stays Firm on FTTH

FTTH Council Europe -- European Commissioner Viviane Reding has sent a very clear message to Europe’s incumbent operators -- there’s no way you’ll get away with building closed FTTH networks.

Reding didn’t make it to this year’s FTTH Council Europe event in Paris -- she was busy squaring up to Europe’s national regulators -- but her presence loomed large at the proceedings.

The commissioner, who has shown, in her ongoing dealings with the region’s mobile carriers, how tough she can be, sent a video message to the Paris event and left no one in two minds about where she stands.

”Several operators have announced their fiber plans -- this great migration to fiber is a challenge. Some carriers want [regulatory] exemptions for their fiber rollouts,” she noted, without naming DT, “but regulatory holidays are not on the agenda -- there will be no sliding back to monopolies,” she added.

Reding also praised Europe’s impressive broadband growth rate in recent years. With nearly 100 million broadband customers at the end of 2007, the region’s broadband connection total has grown three-fold during the past three years, “and that’s due to market forces promoting competition.”

But Europe can still do better, especially with regard to the speed of connections, as the average speed of a broadband connection in European Union member countries is just 1 Mbit/s, and Europe needs better upload speeds so it can participate in the user-generated content revolution, added Reding.

And that’s where the growth of residential fiber access will make a difference.

So what’s the European Commission going to do about regulating FTTH? Reding’s team is currently taking recommendations on next-generation access with a view to publishing a report on the issue by “mid-2008.”

Ken Ducatel, a member of Reding’s Information Society Commission Cabinet, told the Paris event that FTTH is “one of the most important issues we need to deal with.”

He said many incumbents will be attracted to a PON architecture because it will enable them to use existing physical infrastructure (especially ducts) and, overall, keep costs down.

France Telecom SA (NYSE: FTE - message board) certainly falls into that category: It has stated it chose a PON architecture because it best suited its “legacy infrastructure, in terms of duct space and building space. A solution that takes up less space is preferable.”

But PON rollouts also raise competitive issues, noted Ducatel. “How do you unbundle PON? That’s very unclear, whereas the unbundling potential of point-to-point [fiber access connections] is much clearer. We are making further inquiries into this. We haven’t reached any conclusions and we’re still talking to the national regulators,” said the EC man.