Without a change in regulations and increased political will at the highest level, Europe’s plan for faster broadband could run out of time. Guy Daniels reports.
A Europe-wide broadband switchover from copper-based connectivity to a completely fibre-based architecture could take 92 years, concludes a new report commissioned and funded by the Fibre to the Home (FTTH) Council Europe. That’s unless EU governments decide to significantly change telecom regulations and embark on a comprehensive Fibre Switchover Plan, of course.
The study, from fibre consultancy the Ventura Team with financial input from Portland Advisors, says that the current switchover is happening at “a snail’s pace” and could “seriously obstruct economic growth across Europe for a long time to come.”
Stefan Stanislawski, partner of Ventura Team, co-authored the report. He was also the author of the 1993 report for the EU that apparently started the entire unbundling process in Europe. According to Stanislawski, fibre is the only real technological option capable of meeting the demand for broadband in the long run, and money is not the obstacle:
“In Europe we are still not investing enough money into fibre, and this is not for lack of capital. The industry could fund the switchover itself over a period of 25 years with the right regulations.”
Stanislawski argues that a full switchover resulting in fibre cables laid out to every home in the EU would cost an estimated €261bn in CAPEX, yet the current rate of telecoms investment into fibre is a mere €3bn a year. Simply not fast enough, he says:
“In our view the telecoms industry must uphold what we call their ‘social contract for timely renewal of assets’.
In fact, regular telecoms consumers all over Europe are already paying for the switchover to happen over the next 25 years through tariff regulations – except it won’t, unless new regulatory schemes are adopted and enforced.”
The study’s authors advocate changes in regulations in the form of a coordinated program to drive the fibre switchover. At the moment they say there is little incentive for fixed telecom operators to affect a switch to fibre since the cash keeps flowing from the old copper networks.
The report says a fibre switchover inside the EU27 region would generate jobs and growth to repay the investment. But there needs to be sufficient political will, coupled with regulatory changes.
In order to achieve the complete switchover in a maximum of 25 years, the report advocates a seven-point action plan in that includes changing the regulation, enforcing the existing social contract, changing strategic pricing and updating the concept of universal service. It backs up its plan with what it says is a comprehensive economic model.
Florian Damas, member of the Policy and Regulation Committee of the FTTH Council Europe, explains the thinking behind the report:
“When we decided in the FTTH Council Europe to fund this study, we wanted to make sure that the result will be a positive contribution to the wide range of scenarios to accelerate the FTTH deployments. We are pleased to see that the study is already discussed intensively among the different stakeholders.”
The new study, ‘Financing Stimulus for FTTH – Funding Europe’s €260 billion access fibre upgrade: A rationale and specific recommendations for a new approach by industry, policy makers and governments,’ is available for download as a PDF from the FTTH Council’s website.
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