Executive Summary

One of the significant challenges facing network operators today is the high capital cost of deploying next generation broadband network to individual homes or schools. Fiber to the home only makes economic sense for a relatively small percentage of homes or schools. One solution is a novel new approach under development in several jurisdictions around the world is to bundle the cost of next generation broadband Internet with the deployment of solar panels on the owners roof or through the sale of renewable energy to the homeowner. Rather than charging customers directly for the costs of deployment of the high speed broadband network theses costs instead are amortized over several years as a small discount on the customer’s Feed in Tariff (FIT) or renewable energy bill. There are many companies such as Solar City that will fund the entire capital cost of deploying solar panels on the roofs of homes or schools, who in turn make their money from the long term sale of the power from the panels to the electrical grid. In addition there are no Energy Service Companies (ESCOs) and Green Bond Funds that will underwrite the cost of larger installations.

For further information and detailed business analysis please contact Bill St. Arnaud at bill.st.arnaud@gmail.com.

Tuesday, December 23, 2008

The $15 billion broadband bonus

[Here is a good paper referenced in the Cook Report that demonstrates the impact of broadband on GDP. While most other studies have done a lot of waving about the impact of broadband, this paper is the most analytical I have seen in some time.

As governments talk about economic stimulus, what this paper demonstrates is that the biggest bang for the buck will probably be in broadband deployment. While digging sewers and building bridges is important, the leveraging of such investments in terms of creating new economic opportunities is nowhere close to that of broadband deployment.

But its also important that we make the right investment in broadband. It cannot and should not reinforce existing duopolies. It must enable a competitive environment and a level playing field. That is how we will maximize innovation and economic leverage.

Brough Turner gives several good example of this type of investment through customer owned networks in a recent talk he gave at Emerging Communications Conference
Slides at: http://www.slideshare.net/eComm2008/brough-turners-presentation-at-ecomm-2008
Audio at: : http://itc.conversationsnetwork.org/shows/detail3719.html

Also FreePress, a national, nonpartisan organization working to reform the media, argues for the same solution for the US through a $5 billion investment to “. An innovative idea that has been successful abroad, this proposal is designed to deploy world class fiber-optic networks which are shared by multiple competitors. This program would award higher levels of investment tax credits and accelerated depreciation to entities that deploy more than a single strand of fiber to an end user for the purpose of selling the fiber to a competitive provider. In addition, the program would allow all taxes on sales of the additional fiber to qualifying third parties to be completely deferred for five years. This approach would spur competition in the broadband market, encouraging demand and innovation

The $15 billion broadband bonus

Thursday, December 18, 2008

Customer Ownership of the Local Loop: Its Effects on Competition

[Here is an excellent web site on the regulatory and competitive aspects on the advantages of the customer owning the last mile. Although the arguments are couched in terms of telephony service, they equally apply to internet connections as well. Thanks to Alfredo Bregni for this pointer – BSA]

Full competition in telephony requires the solution of numerous problems, some of which appear truly intractable. This paper deals with three of the most serious difficulties that competition in telephony must overcome: interconnection among local exchange service providers, interconnection between local exchange and interexchange service providers, and the transition from monopoly to competition. This paper shows that customer ownership of the local loop provides an elegant, uniform solution to these problems; it causes each of these problems to virtually disappear. The paper also discusses the likelihood that customer ownership of the local loop will create a competitive loop construction industry. This does not directly solve an obvious problem with competition in telephony, but it is clearly desirable, because it permits loop construction to be demand driven rather than supply driven. The paper concludes with an explanation that customer ownership of the local loop does more than solve several individual problems with competition in the provision of telephony. Rather, it constitutes an elegant, integrated solution to many of the problems with competition in telephony.
For more information also see:

Google policy paper
Home with tails – what if you could own your Internet connection

Tuesday, December 16, 2008

Swisscom to deploy multiple fibers per home to enable competition

[Kudos to Swisscom for recognizing that multiple strands of home run fiber is a far better solution than xPON for delivering future proof broadband. It also enables competitors with new business models such as “homes with tails”. Excerpts from Lightwave. Thanks to Harvey Newman for this pointer—BSA]

Swisscom touts "fibre suisse" project

Over the next six years, Swisscom is planning to invest some CHF 8 billion in the Swiss telecommunications and IT infrastructure, with 35% of this sum earmarked for fibre-optic expansion.

To enable potential cooperation partners to expand their own fibre-optic infrastructure after the construction work has started, Swisscom will be laying several fibres per household in all areas. One fibre will be used by Swisscom, while the others will be made available to the cooperation partners. The multi-fibre model will prevent the creation of a new network monopoly in Switzerland and also meet competitors' requirements for full access to the local loop.

At the end of July, Swisscom invited potential cooperation partners from the telecommunications, cable, and utilities industries to work with it on building the fibre-optic network, with the aim of implementing the network more quickly and cost-effectively in conjunction with several partners. Moreover, this collaboration will generate competition among different types of networks, boosting investment and innovation and maximising the benefits for customers and home owners, says the carrier.

While laying several fibres per household entails marginally higher investments, it guarantees competition at the technology and service levels. Limiting fibres to one per household would be impractical, says the carrier, since it would endanger the dynamic nature of the market and the technological innovativeness of the telecommunications industry over the next 30 to 50 years.

Find more FTTx news at /Lightwave/'s FTTx Resource Center .