IP Convergence: Beyond VoIP, Beyond Cost Savings

A new paper from the Organization for Economic Development (”OECD”) recognizes the importance of rights of way to sustainable competition for next generation networks. Some note worthy quotes include:

“The limitations faced by new entrants are significant, especially with respect to the reach of their existing networks and their ability to obtain access to rights of way and ducts. It is thus difficult for new entrants to replicate an NGN access infrastructure.”

“In addition, a large percentage of costs in rolling out new fibre networks are construction costs related to conduits and rights of way. Construction costs could be significantly higher for operators if they do not already have access to rights of way and ducts.”

“Incumbents have a significant advantage because their historical monopoly position has given them existing rights of way and they usually own the ducts used by copper networks (which often means they do not pay for rights of way). Other utilities, such as electric power companies, also have access to rights of way and ducts. The number of administrative layers (local municipal councils, regional bodies, etc.) often creates difficulties for new entrants in obtaining access to rights of way and ducts. Where municipalities are pro-active in trying to ensure that fibre networks are developed, they often provide access to municipal rights of way and ducts on reasonable terms.”

The OECD goes on to recommend

“The high costs of civil works to construct ducts will impact on new entrants who, in contrast to incumbents, do not have historical access to rights of way and ducts. In order to try and stimulate the rollout of fibre by new entrants it is important for policy makers and communication regulators to examine steps that can be taken to reduce these costs. There are a number of steps that can facilitate new entrants including:
• Reducing barriers associated with obtaining municipal authorisation for access to and use of rights of way.
• Ensuring clarification of jurisdiction for both granting rights of way and settling disputes and coordination among the public authorities involved.
• Harmonising administrative procedures for access to rights of way and ensuring consistency in the application of these procedures across a country.
• Reducing or eliminating any fees associated with using rights of way.
• Ensuring that operators investing in ducts are subject to a minimum set of obligations for remediation and maintenance.
• Encouraging and/or obliging sharing of ducts and other rights of way both by incumbent communication companies, but also by other municipal utilities that have infrastructure.
• Examining the role of public-private partnerships in the deployment of dark fibre and/or third party infrastructure providers for duct sharing.
• Examining the possibility of regulatory measures to impose the pre-wiring of new residences for sharing of in-house wiring.
• Developing policies to construct joint ducts by new entrants.
• Adding inner ducts (duct dividers) into the ducts and canals for increasing the existing capacity.

Delays in rolling out networks can be costly for operators, and can delay the development of competitive markets, so that by preventing delays in the process of rights of way applications, a system of safeguards which ensures that deadlines for decisions concerning permits are respected. Establishing targeted time frames for various steps of the rights of way process helps in providing predictability to the applicant. In order to facilitate competing fibre local loops, reduce costs and reduce multiple excavation and other civil works in municipalities the sharing of existing ducts, both of telecommunication and cable companies, but also of other utilities, is an important policy requirement. Similarly access to buildings and sharing of wiring is important to ensure effective competition in the market.”

One can only hope that policy makers actually read this paper and take action on its recommendation.