Cheaper fibre key to delivering broadband access to the masses

By PAUL BRISLEN

Unbundling or forcing a telco to offer a wholesale regime won't help deliver the Government's digital strategy as quickly as we would like, according to Canadian expert Bill St Arnaud.

Instead, he says, governments should look to forcing a structural separation of networks, a model he says is working extremely well in Canada and parts of Australia.

St Arnaud, in New Zealand for the Telecommunications Users Association's Broadband Reloaded conference in Napier, said New Zealand had slipped down the rankings of countries with broadband services, while Canada was in the top three. He put that down to leadership.

"The Canadian Government actively protected the fledgling cable industry in the 1970s and 1980s to the point where it no longer needed protection to compete with the telecommunications network operators," said St Arnaud.


While the New Zealand Government had spent tens of millions of dollars on Project Probe, St Arnaud said the Canadian Government had taken a slightly different approach.

"The real driver is price. Once it's low enough people will buy it. Just look at the PC industry."

The PC business delivered great applications that lots of people wanted, but it was only when prices dropped far enough that every home in the OECD ended up with a PC.

The Canadian Government wanted to encourage network companies to deliver broadband to the masses, so it introduced what St Arnaud called "condominium fibre".

"Basically these condo fibre companies approach a school or a university or a government department and agree to put in fibre to connect sites. The schools get a strand of fibre within the bundle which gives them unlimited bandwidth to connect with universities or other schools."

The condo fibre companies will give away fibre strands in this manner, perhaps up to 300 per bundle, but install far more strands, up to 1000 in a fibre the width of a human thumb, which they on-sell to businesses, internet service providers or whoever wants to buy them.


St Arnaud said the Australian Government in Canberra had also introduced a similar plan with dramatic results.

"The government departments are all linked together by their own fibre strands at a cost of $1000 per strand. That's a one-off cost. They pay $15,000 a year between them all for maintenance. You couldn't buy that service for $1000 a month from a telco."

St Arnaud said once users were freed from the concept of paying dollars for megabytes, the really interesting developments took off.

The companies that install the fibre are typically water or sewerage companies that know how to dig trenches.

The telcos themselves are able to buy service from these companies but aren't allowed to compete directly, to protect the nascent industry.

The condo fibre companies don't compete with the telcos directly - they simply offer the fibre in an unlit state.