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• Comments 1 Comment
• Categories Broadband, Regulation
• Author Benoît Felten

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A couple of weeks ago, research firm Point Topic published a thick report commissioned by DG Connect and entitled Broadband Coverage in Europe in 2011. I wanted to understand a little better how the study had been undertaken, and so I spoke to Point Topic’s Tim Johnson. Here is our exchange in extenso:

Benoît Felten: Hello Tim, can you introduce yourself for our readers?

Tim Johnson: Yes, I was the founder of Point Topic and now I’m “Consultant Analyst” with them.  Before that I started Ovum, and before that, a long time before that, I was a science journalist.  I’ve been researching and analysing data communications since the 1970’s at least.

BF: Point Topic recently released a report mapping broadband connectivity in Europe. What exactly is in this report and how did it come to be?

TJ: The report was commissioned by DG Connect, the part of the European Commission which is responsible for the Digital Agenda initiative.  The aim was to get figures for the coverage of 9 different broadband technologies in each of the EU 27 countries plus Norway and Iceland.  We pointed out in our proposal that you couldn’t achieve what they wanted unless you gathered data at a more detailed level than whole countries. So for the first time, I think, we have collected broadband data on the provincial level right across Europe.

BF: What was the goal of DG Connect in commissioning that report?

TJ: The Digital Agenda has the objective, amongst others, of providing 100% coverage of EU homes with broadband of at least 30Mbps by 2020. They wanted to know, how far we have got with that objective and where the gaps were.

BF: So where does one find the data to do such an analysis (without betraying any trade secrets) ?

TJ: No secret.  The project centered on a Survey of NRAs and operators.  We created a questionnaire and got them to fill it out.  Many did and some didn’t.  So we had a parallel research program to get whatever public data was available.  And to fill the remaining gaps we did constraint modeling to show where coverage was likely to be – nobody builds cable networks in the countryside for example.

BF: So a mix of hard data and modeled data.

TJ: Yes.  One thing we were determined on was that there would be no “Not Available” type blanks.  The methodology provides a basic answer in all cells.  Now we have won the contract to update the work next year.  Now they see what happens to the data, respondents are much more engaged than they were before.

BF: What would say are the key findings, first in terms of how far Europe is in meeting the goals set by the EC?

TJ: The coverage of superfast or NGA broadband is just over 50%, by a fortunate chance, so we have said that Europe is half-way to “Digital Heaven”.  Basic broadband coverage is pretty good, about 96% from memory.  The relative shares of the different NGA technologies are interesting too.

BF: How is superfast defined, in this case?

TJ: Anything that can deliver 30Mbps or more downstream. Fixed line that is – LTE doesn’t count.

BF: Anything that can or anything that does?

TJ: That can, many customers will still be running on lower and usually cheaper speeds.

BF: Part of the purpose of these studies, I guess, is to identify who’s doing well and who’s doing not so well, to rank countries as it were. So who are the best in class and who are the worst in class?

TJ: I spent the early part of last week producing 29 press releases, one for each of the study countries, and my aim was to put a positive headline on every one.  The only one which didn’t get some sort of good mark was Sweden, as the bright child which was not living up to its potential. The Netherlands has the most complete coverage, 100% superfast already.  Cyprus has 0% but will soon have 100% or close.  Worse off otherwise is Greece.

BF: Why is Sweden not living up to its potential? That’s very interesting!

TJ: In our view because it majored too much on FTTP in the early 90s and has failed to develop more cost effective alternatives such as VDSL for low density areas. It now has a lower FTTP coverage than Denmark, for example, lower overall superfast than Norway, yet Sweden is still thought of as the poster child for “most advanced telecoms economy in Europe”, if not the world.

BF: I just scanned the press releases. Indeed it’s like you strive to point out how everyone is a good boy (except Sweden). Was that a request of DG Connect?

TJ: Not specifically but we understood each other I think.  It kept me going through the 29 – what can I say which is special about this one. The press releases were our idea anyway – I don’t think DG Connect would have done them

BF: OK. So what’s next? You mentioned that Point Topic will be doing some further analysis for DG Connect. Is it just a yearly continuation of this assessment, or does it go into more detail?

TJ: This is essentially a repeat of the first one but with a lot more knowledge and experience.  It should be much the same but better.

BF: Well good luck with that new iteration then, and let’s speak again when the results are out next year!

TJ: Yes, I look forward to that.  We are doing a lot of other work in the area so we hope to have more news before then.

• Comments 0 Comments
• Categories Broadband
• Author Benoît Felten

European FTTH policy isn’t working. It’s not in any way controversial to say so, and I have done so repeatedly in the past. When it comes to offering comprehensive solutions and alternate routes of course, things get trickier. When Diffraction Analysis released Can the New Zealand NGA Model Be Replicated? a few months ago, our goal was to suggest that the example of New Zealand could constitute an inspiration for European policy makers.

A couple of weeks back, the FTTH Council published a study they commissioned entitled Financing Stimulus for FTTH. The study was undertaken by Ventura Team and Portland Advisers, and it’s frankly a stunning piece of work. The headline in the Council’s PR was that “at the present rate it will take 92 years to fiber up Europe”. It’s a strong message, and a clear incentive for change, but it only scratches the surface of what is in this study. In fact the reason it took me so long to write about it is that I had to read it and understand it first. It’s a very detailed piece of work and while the language and concepts are mostly clear, you still need a lot of focus and attention to get through it and grasp the messages.

I really encourage you to read this piece of work, even if you’re not from the EU, because there are many things in there that I haven’t seen elsewhere. In particular, the study makes the connection between the players who are likely to deploy and their incentive to do so (or not), and the players who are likely to fund the deployment and their incentive to do so (or not). That analysis puts in sharp relief the disconnect between the strategies of telecom incumbents in Europe and the expectations of infrastructure funds. It examines the nature of the financial players involved and the amount of funding they could make available for such deployment, if the conditions were right for them. There’s a table on p34 which is the clearest transverse view of funding of telecom infrastructure I’ve ever seen. Very clear and to the point.

The study also delves in-depth on one of the most important aspects of a fiber switchover, ie. the relative price of wholesale copper vs. wholesale fiber. We’ve heard all kinds of things on these issues in recent months, with both incumbents and competitive operators arguing that copper wholesale prices should go up to free up more cash to invest in fiber. One would have to be very naïve indeed to believe that either would actually invest more in infrastructure were that to be the case. The study clearly demonstrates that this approach is nonsensical if the policy goals are to be met, and that the only workable scenario is actually to have copper wholesale prices at least 15% higher than fiber wholesale prices. Not only does this make sense going forward, but it’s also part of the social contract of regulated prices, designed to ensure a re-investment in network assets that didn’t effectively happen for copper.

Finally, the study examines a framework that would enable telcos to remain masters of their own infrastructure fate in black areas but would structure the grey and white markets through institutionalised public-private partnerships that lead to the creation of NetCos in a way reminiscent of the New Zealand scenario. Needless to say that aligns with my views, but is way better argued in the study than I could ever have done.

Long story short, if you care about this issue and want to examine a really clever way to move forward, this is a must read. I can only commend the FTTH Council Europe for commissioning and publishing such a study. It’s the most comprehensive piece of work in this area that I have seen in a long while, and hopefully the fact that it’s widely distributed will win hearts and minds where it matters.

• Comments 0 Comments
• Categories Access, Broadband, Business Models, Regulation
• Author Benoît Felten

A few years ago, it looked like Italy might be a place where interesting broadband deployment models might emerge. In particular, a consortium of alternative operators all working together pushed a radical proposal to pool resources for the deployment of a unique national FTTH point-to-point network. The key to making that work of course was the willing participation of incumbent Telecom Italia. Having rejected FTTC as a solution, and being cash-strapped, it looking for a while like Telecom Italia might agree.

Alas, things have changed and the Italian model now looks like so many others: Telecom Italia is embracing FTTC with FTTH deployment being a reality only in Milan (using Metroweb’s infrastructure). The plans for FTTC deployment target 6.1 million homes passed end 2014 in 100 cities. Somewhere in there is the Milan FTTH and possibly one or two other cities, but that sounds like wishful thinking to me.

Meanwhile, the ambitious Lombardia FTTH project seems to have ground to a halt as well. I haven’t heard anything about it in ages, and I don’t know if that’s for financial, technical or political reasons (and probably a mix of the three).

So there you have it. For a long time, Italy was a leader in the European rankings because of the legacy of Fastweb’s deployment in Milan. But these numbers have stayed flat for years, and it’s not looking like they will be growing anytime soon.

• Comments 3 Comments
• Categories Access, Broadband
• Author Benoît Felten

Ever since the official announcement earlier this year, I have been keeping my eyes peeled for more information on developments in York. An article in Thinkbroadband earlier this week summarized what we know about the plans so far: Fibre to within 200 metres of 80% of York businesses by March 2013. The title really says it all.

There have been some interrogations about City Fiber Holdings’ plans going forward considering the history of the company they purchased the assets from (i3) and the relative silence that followed the purchase. Now with services having been launched in Bournemouth and the York project going forward the dynamic is become apparent again.

Co