Sunday, November 23, 2008

Wither FTTH regulation?

Last week, KPN's FTTH plans were leaked - possibly to test investor appetite for large-scale FTTH investments. Officially, they are testing demand and will decide 09H2 to go either FTTH or FTTC. Whatever is the case, the coming week will be eventful. Not only does it have Australia's NBN deadline, OPTA (the Dutch NRA) will publish a proposal on rulemaking regarding FTTH Monday night (at 7 PM).

It will be very interesting to see how they plan to regulate this huge effort, that could entail re-monopolisation of the market if it is not regulated well enough.

We have been in favour of structural (ownership) separation to deal with the two basic issues at stake: competition and investment. However, KPN has been able to stave off any threat like that by offering open access to rivals. It was also helped by the fact that competitors' commitment to the Dutch market has always been a bit uncertain.

Now James picked up on one of the basic reasons to go to structural separation: attract outside funding.
KPN will have 41% of the Glashart joint venture, but Reggefiber's 59% should not suggest that it will shoulder the majority of the investments because it simply can't. Enter third parties ...
If KPN is allowed to spin-off network assets into the joint venture, it will start to look more and more like the Singapore way.

1 comment:

jack said...

Because of the potential economic development opportunities inherent in FTTH are eventually going to need to undertake major infrastructure build outs to extend broadband to the home.

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