ideotel

France lagging FTTH but WE HAVE A PLAN

Today I went to speak in a yearly forum organized by the regulator (ARCEP) about Public Initiative Networks, the French definition for telecoms PPP's'

The realizations to date are impressive: more than 30,000km of fiber deployed in 160 ppp's, 40% of the total number of central offices unbundled thanks to these networks, €2 billions combined investment between public and private funds.

However looking forward the picture is less clear. The local governments, so active in the past five years, are financially exhausted due to the economic crisis and a tax overhaul. The public is less concerned about ultra high broadband (through fiber or LTE) now that they have broadband in 99% of the homes. The large operators are more or less satisfying their shareholders with announcements suggesting that they will stay on top of the game without actually investing in the short term.

Yet the political powers - who seem to be the only ones to have long term visions since the financial collapse - have decided that this is not enough and are looking to a ultra high broadband future for the entire country, with or without the largest operators.

In that sense France is not unlike Australia, or Greece, or Singapore, except that so far we have not defined the framework to deploy this next generation network.

Three months ago the government announced the creation of a €750m fund to finance FTTH in semi-dense areas, roughly 5,000,000 homes. Since then they have been struggling to bring the large operators on board and complete the financing to make this a realistic plan.

As someone suggested, the enthousiasm for this plan is inversely proportional to the market share. In other words, the incumbent is totally skeptical, while the relatively small next generation network operators like us are quite supportive.

We had already advocated for an open access solution (see previous posts) Today, in order to show our commitment, we proposed some guidelines to structure the deployment and financing:

- the territory could be split in 4-5 segments representing approximately 1m households each in semi-dense areas (this assumes that private initiative will cover dense areas, which according to operator Free is easier said than done).
- a national consortium would be set up with the largest operators and the French national bank CDC. The consortium would in turn establish a subsidiary in each of the territorial segments.
- In each segment, a neutral operator would be selected for the deployment and operation of the FTTH network, in association with the local communities willing to participate in exchange for some ownership in the network.
- the large operators, as members of the national consortium, would commit to use the consortium's FTTH lines in order to guaranty the business case and the ability to raise additional financing.

Why segmenting the territory and not having one single project? France is a relatively large, diverse, and sparsely populated country. There needs to be room for local adaptations. The segmentation also limits the risk and creates emulation by selecting different neutral operators to manage the projects. On the other hands, the size of the segments needs to be sufficient to attract infrastructure financing.

With these ideas, inspired from foreign experiences, we hope to have advanced a little bit the thinking about the future infrastructure.

Again the last word should be left to the polititians. As one of the participants of today's forum, Senator Bruno Retailleau, remarked: 'Is France still able to carry out a major infrastructure project, that is the question'.

I hope the answer is yes.

Current and former French Prime Ministers gather to plan the future of the Digital Economy

It is a tradition, in France, that the top offices are always held by extremely bright people who can think of the best solutions to any issue. This week no less than 4 ministers and 2 former prime ministers gathered in an impressive conference to discuss ways to boost the digital economy as a way of general economic recovery. The opportunity is a projected multi-billion euro loan to be applied to projects and investments for the future of the country.

There was clear agreement on the right ways to do it. There could be doubts on the actual outcomes, because we are in the world of politics, but at least there seems to be a common vision.

Some initiatives are related to contents and services, like encouraging the development of “serious gaming” ventures (although I personally have difficulties associating the concepts of government, gaming, and seriousness).

However to the great satisfaction of next generation network promoters, priority was given to infrastructure, as a way to promote economic progress, sustainable development, and equality among citizens.

For the rural areas, the pragmatists recommend the deployment of fibre to the incumbent’s node, and then DSL to the end user. While it may provide an answer to the lack of broadband for some users, we are concerned that it could reinforce the incumbent’s monopoly in these areas. Perhaps it’s not a concern and we should leave 3% of the population with only one alternative, which is better than none. Another solution is to bundle together rural and dense areas to create more attractive public-private partnerships opportunities.

For medium-sized urban areas (so-called semi-dense areas) the solution would be to create a single national operator with public and private funds. This idea looks like the Australian project with less ambition. The issue with this concept is that there are already tens of initiatives of municipalities to deploy fibre networks in partnership with private operators. Would municipalities have to sit on the bench while this mutualised operator decides where and when to start deploying? Will it take one or two years for the large operators to decide to participate? We are advocating for bylaws that incorporate the possibility to finance local initiatives.