September 13, 2007 9:47 AM
Open Access Picking Up Steam?
Following my trip to UTOPIA, I wrote a post about the as-of-yet unrealized promise of open access networks, or networks where multiple service providers compete over the same pipes.
This concept is one I first encountered at my first Broadband Properties Summit in 2005. It was then I heard a presentation by Robert Kjellberg of Vasteras, Sweden, where their open access network, powered by PacketFront’s technology, enables users to pick between multiple Internet, voice, and TV providers as well as a host of other services and applications, and self-provision these services through a common portal interface.
From the first time I learned of this it piqued my interest. I like the idea of focusing competition in telecommunications on the merits of services rather than the physical characteristics of last-mile access technologies (cable vs. DSL vs. fiber, etc.). And ultimately the Internet is one massive open access network where multiple services are being provided over one broadband network any way.
But the market hadn’t warmed up to this. Everyone I talked to, even if they agreed with the idea philosophically didn’t think it was feasible, practical, or realistic. Many pointed to the uphill battle UTOPIA has faced in attracting service providers to its network as proof that the model was doomed.
But the winds of opinion appear to have shifted this year at the Broadband Properties Summit.
On Tuesday in talking with both Glen Lang, CEO of Connexion, and Diane Kruse, CEO of ZoomyCo—two leading competitors in the greenfield FTTH space—I heard different renditions of the same theme: they want to own the last-mile access infrastructure and then allow multiple service providers to come and compete over their network.
Now I can’t say whether or not their respective business models are fully open access, but they weren’t the only ones there talking about the possibilities of multiple service providers competing over the same pipe. In fact, PacketFront’s booth was swamped throughout the event as seemingly every attendee wanted to at least learn more if not start talking about how they can be pursuing this model.
It was a fascinating contrast from years past to see so much excitement over open access networks that enable competitive service environments.
And it’s not just at the Broadband Properties Summit that the interest in open access is growing, including this World Bank report as well as this Blandin Foundation report. (Please note, both of these links initiate downloads of PDFs.)
Yet before getting too caught up in the growing hype, we needn’t forget both how revolutionary the open access model is and as such how much work there is to do to make it into a reality across larger swathes of the US and beyond.
The biggest challenges seem to lie in its nascence. There’s no clear-cut model to follow when deploying, which means a continuing need for experimentation—a somewhat scary proposition for a project that requires millions in investment. And because we don’t yet have great numbers of customers on open access networks, it can be challenging to convince service providers of the value in focusing their business on riding somebody else’s network.
And there are still many with reservations about the viability of this model. One common argument I’ve heard against it is the idea that while competition may drive innovation, it also means as more competitors jump onto a network the market share for each likely shrinks as just because there’s more competitors doesn’t mean there are more customers.
None of these challenges seem insurmountable, though, as the open access model has been successful in areas like Vasteras, the number of open access networks is increasing, and the hope is that as consumer awareness of the advantage of open access networks evolves eventually the pie can and will grow bigger for service providers on those networks.
Whatever the eventual outcome, this is a significant trend in telecommunications that I will continue to track as both the concept and reality spread across the country and around the globe.
Comments (1)
You said, "There’s no clear-cut model to follow when deploying, which means a continuing need for experimentation—a somewhat scary proposition for a project that requires millions in investment. And because we don’t yet have great numbers of customers on open access networks, it can be challenging to convince service providers of the value in focusing their business on riding somebody else’s network." Though this may be true in the US for broadband, it was the way things were at the beginning of the internet here, when hundreds of ISPs competed for our business. And it is the model that other countries, notably France and England, are following.
I think it's notable that in France the companies that started out buying wholesale access are now building out their own fiber networks.
http://www.businessweek.com/globalbiz/content/jul2007/gb20070718_387052.htm
Japan also follows the open access model and is kicking our broadband butt.
http://www.washingtonpost.com/wp-dyn/content/article/2007/08/28/AR2007082801990.html
This model, as it exists in Sweden, also seems to be spurring further innovation, as the story on Sigbritt Löthberg illustrates.
http://www.thelocal.se/7869/20070712/
Compare all that to what's been happening in the US since Local Loop Unbundling was killed market by market (with Verizon now battling to murder it in NYC, Boston and the other NE holdout cities) and anyone can see that without some MAJOR restructuring of our current policy regarding the last mile we, the US, are gonna be left in the dust.
Posted by bj on September 19, 2007 2:58 PM