With all due respect to the Commerce Commission and the MED, you don’t expect a regulator to be funny. But during his speech to the Conferenz Telecommunications and ICT Summit David Stewart, director of investigations at the OFCOM (the UK regulator), had a couple of dry one liners worth repeating.
He joked that the fibre league tables were becoming a sign of a nation’s virility but what, he asked, is the benefit to consumers of fibre investment? Of course, when you talk about fibre it could mean national backhaul, it could mean last mile connectivity, or it could be the big pipe that carries international traffic. But whatever the piece along the connectivity trail, fibre appears the most likely means of delivering next generation broadband.
Which brings me to the other notable one liner in Stewart’s speech – before OFCOM seriously began enforcing LLU legislation he said the UK telco sector resembled “Snow White and the 23 Dwarfs.” He said LLU has been the centerpiece of the effective regulation and he credits it with creating an industry that is “in rude good health (with a) renaissance in investment and spending. We estimate the telco spend at £25 billion, that’s $NZ 56 billion.”
So how do you transfer LLU gains to a fibre world? How do you avoid stranding competitor’s LLU investments if you replace the copper with fibre? What is the point where competition is sustainable in next generation networks? These are some the issues OFCOM is grappling with.
Earlier in the day, fibre investment wasn’t specifically in the Telecommunication Minister David Cunliffe’s speech, but it was on the minds of his audience. The first question to him was around the government’s investment in fibre. Cunliffe mentioned three fibre-related issues of concern to the government: rural bottleneck, regional backhaul and international connectivity. At morning tea I asked him about these three issues. He said the government is currently researching rural connectivity (through changes to the KiwiShare) and regional connectivity (looking at a way to bring the fibre backhaul to regional areas such as Gisborne). He wouldn’t discuss cabinet’s timetable but indicated a decision is likely before the Digital Summit in October.
As for international connectivity, Cunliffe says it isn’t as high a priority as regional backhaul and rural connectivity. However it is on the agenda, here’s what he said about the Southern Cross Cable:
“I understand it’s in pretty good shape but some analysts indicate that they have concerns if such a vital connectivity resource is largely through the hands of one provider. It has competitive implications for downstream, so at the moment I don’t believe that is a constraint, it’s not fully utilized but it is an issue that we will consider further down the track.”
I had a couple of ideas about what the government might do but he made it clear these were “getting way ahead of the work, there are other things that we’re working on that are a high priority right now.”