ECTA’s High Speed 2010 conference: Refreshing but no resolution in sight

By Rob Gallagher

I’m no fan of conferences where everyone agrees and leaves with pretty much the same opinions they had when they arrived. In my opinion, such love-ins do the attendees a disservice and have played no small part in driving the telecoms industry down numerous dead-ends over the years. That’s why I found the European Competitive Telecommunications Association (ECTA) conference so refreshing.

ECTA is a lobby group largely for fixed telecoms providers looking to challenge the dominance of Europe’s former state-owned monopolies, known as the incumbents. Its High Speed 2010 event focused in part on government drives to speed up the spread of superfast next-generation access (NGA) networks, but was not just a platform for its members to repeat their concerns about how incumbents might abuse this opportunity.

Richard Feasey, director of public policy for Vodafone, rose above such technicalities to give a mobile operator’s view of the fundamental problems the fixed-line industry faces. He drew attention to the stark contrast between the momentum behind mobile broadband and the inertia affecting NGA. Ever-faster versions of mobile broadband are being rolled out across Europe, yet the rollout of NGA networks is being hamstrung by conservative regulatory debate, said Feasey.

How could the industry could reach the European Commission’s target of 50 per cent of households subscribed to 100Mbps-plus broadband by 2010, when penetration of fiber connections in the Union had yet to breach a couple of percent, he asked. Our research has also shown that the vast majority of these connections are providing services with speeds similar to current-generation networks. (see Next-generation networks shatter broadband pricing norms – subscription required).

Feasey urged policymakers and operators to think beyond merely modifying the current regulatory framework, with its assumptions that incumbents will continue to be the dominant network owners, to more radical models, such as co-investment in shared infrastructure. Vodafone, notably, is looking to team up with Deutsche Telekom and Fastweb to build NGA networks in Germany and Italy, respectively. A bold aim to be sure, but sources in Germany tell me that Vodafone’s efforts are far from going to plan.

Neutral networks were also a theme of the presentation of Ilsa Godlovitch, head of regulatory affairs for ECTA. She pointed to major investments in widespread infrasrtucture by KPN and BT as evidence that “open access” networks that all providers can use on equal terms promised better returns than ones closed to all but their owners.

Godlovitch made no mention, however, of the growing evidence we have seen that closed networks are delivering great fiber coverage and subscriber numbers particularly in Eastern Europe, at least for now (see Fiber fanatics should drop the one-size-fits-all altruism – subscription required).

The need for unified regulation to allow operators equal access to so-called “passive infrastructure” – ducts housing energy cables, sewage tunnels and railway lines, for example – so they can roll out fiber more cost-effectively was a theme of a number of the Commission speakers present.

Bruno Soria, director of regulatory affairs for Spanish incumbent Telefonica, argued against such a move, pointing to numerous examples where a ‘free market’ for passive access had emerged with various power companies and municipalities competing for operators’ business.

Feasey of Vodafone, however, said it was clear that passive access wasn’t going to deliver much in terms of competition in many markets, because few alternative operators would be able to afford to roll out fiber.

Coincidentally – or not – the Commission ruled on the same day that Ofcom’s solution to this problem would not be enough to ensure full NGA competition in the long run. The UK regulator has defined a wholesale product which would allow an alternative operator to “virtually unbundle” BT’s fiber network by piggybacking on the incumbent’s “active” equipment. While the Commission accepts Ofcom’s proposal, it states that the regulator must ensure that alternative operators can physically unbundle BT’s fiber by installing their own active equipment and cables as soon as technically and economically possible.

Ofcom had hoped that its definition of a virtual unbundling product would become a European standard of sorts. But the word of the ECTA conference floor said that the Commission would not be endorsing it as part of its forthcoming recommendation on NGA regulation, because Ofcom had not got enough interest from other national regulators. My understanding is that even BT has yet to commit to all of the core features defined by Ofcom.

It seems there will plenty to talk about at ECTA’s next event, to be held most likely toward the end of this year. In the meantime, I intend to put these issues and more to the speakers at next week’s FTTx & NGA Summit in London, where I’ll be chairing day two’s morning plenary and afternoon stream on regulation and investment. Please drop me a line, if you would like to meet up.