Monday, November 07, 2011

Access as infrastructure, what does this mean for Telco 2.0?

Having recently attended a seminar by Catherine Middleton from Ryerson on Australia's NBN initiative it got me thinking about "access as infrastructure".

The Australian Government is investing $B's of public and private capital in a national broadband network that is a fibre to the premise platform, although for distant and remote sites it will most likely be a fixed wireless solution.  The proposition from Dr. Middleton is that ubiquitous access will create a platform for services that separates competition from access, sounds like Telco 2.0.

The question I posed was if the idea is a common platform but close to 10% of that access will be at 12Mbps rather than 100Mbps (fixed wireless versus fibre) then surely the lowest common denominator will prevail and services will be designed for 12Mbps.  You would then question the rationale of FTTP or FTTH when you could go fixed wireless.  Over time LTE and similar technologies will see an increase in speed that will offer near fibre speeds anyway.

The underlying driver here is for the Government to build out access in the same way that it builds roads, electricity, gas and other normal infrastructure projects.  This moves competition up the stack from layer 1 and layer 2 platforms.  If you take the profitability dynamic out of the technology then firms will compete higher up the stack on presentation, content, and customer service.  This should ensure that all premises will get connected, not just the ones that are profitable to the CSP.

This is essentially what Telco 2.0 is really about, Telcos becoming enablers and providers for content and over the top providers.  The difference here is that government ownership will see ubiquitous access and not hit-and-miss geographic access paths.

This model is being repeated in New Zealand with the rollout of the ultra fast broadband (UFB) and rural broadband initiative (RBI).  This National Government led programme sees the old incumbent, and natural monopoly, being responsible for the layer 1 and layer 2 network components with regional service providers providing the subscriber level activity.  The regionalised model will not guarantee competition but knowing there is the expense of the pipe handled it should encourage more content and service providers to enter the market.

I still question the logic of FTTH/FTTP when South Korea has had 100Mbps for some time and they still haven't found the killer app or service that justifies the speed.  Moving to an all-IP world should provide opportunities for smartgrid ad virtualised public services (think virtual health by video conference and similar concepts) but this could also be done over fixed wireless.  After all mobile internet and untethered devices is the growth area so why not support it further?

This would look like a swing back to nationalisation models that saw the creation of the incumbents and the monopolies that emerged from the PSTN wave.

Could this model be extended to wireless? if instead of Fibre the technology platform was fixed wireless (WiMax or an equivalent) then the "network" would have to include mast sites.  This would be the equivalent of the mast sharing agreements that continue to be signed across the globe.  This would level the playing field and remove the prime site and capital needs for premier access to customers.

It would certainly see the telco have a role and the one thing it is really good at, running the network.  As has been said before leave the marketing and the customer management to organisations that understand it and care about it.  These isn't your average engineering mentality incumbent but your MVNOs, banks, media companies, and increasingly supermarket chains.  Isn't that what Telco 2.0 is really about it!

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