Monday, January 22, 2007

Monday tidbits

Trying to dig myself out of a pit today, so blogging takes a backseat - unless something really interesting happens. So here are a couple of things to keep you busy. A Platinum Class mega-uber value reader points to the recently added English translation of an article on approaches to fiber written late last year by ARCEP member Gabrielle Gauthey. The salient passage for me, is unsurprisingly:

"It is necessary to understand that the passive network involves a long-term investment with a long-term rate of return (more than 20 years). This can pose a problem for the private operator who derives his profit from an active network and needs to turn a short-term profit (3 to 5 years). Operators must control and own their active network equipment because it’s only at the active level that operators can differentiate themselves and be competitive. However, private operators can easily share the passive network – ducts and dark fibre.

The ways of implementing network sharing can lead to very different investment models, which might risk in some cases recreating monopolies, even local ones. [EuroTelcoblog - this local monopoly scenario is a potential regulator headache I have previously written about - glad to see it being echoed here.]

In one model, the operator is vertically integrated and installs a closed network, or a slightly open network with only resale offers. This is the preferred model of incumbents in the United States.

In another model, long-term investors, who are associated if necessary with local governments, from the start adopt an open-access model, sell passive network capacity without necessarily becoming themselves operators."

You might also want to have a look at the latest from the folks at BackChannel, who have turned their sights to the US primary dedicated access market, to find it more concentrated than in the UK (registration required).

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