its_2011_ordinance on technical requirements and conditions of use of optical distribution networks...
TRANSCRIPT
Ordinance on technical requirements and conditions of use of optical distribution networks of the Croatian regulatory agency – Analysis and Outlook
Dr. Igor Brusić, Mag. Jörg Kittl, Dr. Ernst-Olav Ruhle and DI Vladimir Žuti
22nd European Regional ITS Conference Budapest, 18-21 September, 2011
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Contents
Ordinance 2
Analysis 3
Introduction 1
Conclusion and outlook 4
Croatia / General
• 4.3 mio. inhabitants; 56,500 km2; 1.5 mio. households
• Croatian telecommunication market dominated by the Incumbent operator Hrvatski Telekom (T-HT) – 85% of the broadband access market, Q2 2011 (89% in Q1
2009) – Since 1999 majority owned by DT (Deutsche Telekom)
• ANOs like Optima, Metronet, H1 telekom, Amis telekom and B.net only 15% of the BB market
• Fixed broaband penetration rate: 18.68% (Q1 2011)
• Fiber Access Lines: ca. 100.000 homes passed and 12.000 homes connected
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Introduction
OECD Study „Broadband and the Economy“
Next Generation Infrastructure
„The impact of broadband on the economy are more significant than the impact of electricity, steam engines and information technology in the past“, May 2008
A powerful infrastructure is the basis for the development of the information society ...
... and related to the development of the needs all other technologies beside fibre-based solutoins are only an interim solution ...
... so that every 2-3 years one has to deal with the same subject once again, because there will always be „white spots“.
Deploying fiber access networks
Investment will only be undertaken if a positive business case materializes
Traditional telecommunication companies are very limited in considering external effects for the economic development of the region
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Local Governments Business Plan for Fibre Access
How is revenu generated?
Direct revenue through rental of lines (Dark Fibre)
Connection fees of subscribers
Revenue-sharing models with service providers
Indirect revenues (stable value of properties, reduction of migration, business settlements, taxes)
Co-invest for network deployment
CO2-emission trading (low power consumption, teleworking, micro-trenching)
3. Revenue model
What are the benefits of FTTH for the community ?
The supply of broadband infrastructure is an essential factor for the economic and social community development
Prevents the migration of companies and favours the return of young people after their training or study
Prevents the decay of prices of real estate and industrial zones
Avantage compared to communities without fibre
1. Value proposition
What benefits are offered in which markets? How and in which configuration will the product/service be created (product-/market-strategies)?
Passive infrastructure is offered to all network operators under the same conditions
Non-discriminatory access to the subscriber for all service providers
Every subscriber can use services of any provider in any combination
2. Value chain structure
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Company
Network
Operation/ Maintenance
Distribution
Services
Vert
ical
Inte
grat
ion
Dienste Dienste
Dienste
Network/ Passive
Infrastruktur
Network / Active
Infrastructure
Dienste
Services Services
Network Deployment
Operation and Maintenance
of the Network
Deployment of Innovative Services
Horizontal Frontier
Horizontal Frontier
From Vertical Integration to Horizontal Layering
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Contents
Ordinance 2
Analysis 3
Introduction 1
Conclusion and outlook 4
" Croatian Telecommunication Act addresses network deployment to a minimum extent
" HAKOM ordinances of importance for NGA supporting the Telecom Act
" “Ordinance on manner and conditions of access and shared use of electronic communication infrastructure and associated facilities” (2008)
" “Ordinance on technical conditions for electronic communication networks in business and residential buildings” (2009)
" “Ordinance on technical conditions for duct systems” (2010)
" New “Ordinance on technical requirements and conditions of use of optical distribution networks” " In force since September 2010
" Stipulating requirements in developing, planning, designing, building, using and maintaining optical access networks
" The other 3 ordinances do not address optical distribution networks specifically technology specific ordinance
Regulation of optical distribution networks in Croatia (I)
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" New “Ordinance on technical requirements and conditions of use of optical distribution networks”
" Key points of the new ordinance are: " Point-to-Point architecture
" Mandating p2p architecture in optical distribution networks
" Capacity of at least 1.2 fibres have to be planned
" Open Access obligation " Elastic concept of the optical distribution network
" Based on the principles of open network access
" Integrated communal infrastructure approach " Local plans of space organization must have a perspective deployment plan
" The plan has to be updated at least each five years
" SBRs role: Review of the draft ordinance and support to HAKOM with international best practice analysis
Regulation of optical distribution networks in Croatia (II)
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Contents
Ordinance 2
Analysis 3
Introduction 1
Conclusion and outlook 4
" Focusing on specific optical access networks and technologies " Not technology neutral
" Economic impact on the investing company
" Limiting freedom of operators (by technical pre-determination)
" Determine the distribution node as point of interconnection " No option for sub-loop unbundling
" New entrants may have no other options than to build their own backhaul network
" Giving specific time frames for coordination between operators " Difficult to implement in practice
" Determine the number of fiber per user and spatial requirements of distribution node " Over-engineering the planning
" Limiting incentives to invest
" Strict roll-out obligations: 5 year time horizon " Limiting the option of a step-by-step rollout
" Obligation of finishing already started construction works " Requiring re-planning of ongoing work which potentially could lead to a stop of rollout
Analysis – Critical Review of the Ordinance
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" Main objective of HAKOM – betterment for all actors in the value chain and customer satisfaction
" NGN and NGA is transforming the telecommunication sector in line with the technological revolution
" Real challenge in the fixed network, how to migrate from cooper to optical networks
" There will be only one optical distribution network!
" Investors have to be in accordance with spatial planning like for other communal infrastructure
" There is no investment risk but only long-term return on capital
" Incorporate all operators (network and service) in the planning phase
" Open Access will increase the utilization of the passive infrastructure
" ROI is distributed to all parties in the chain
" Opening optical distribution networks to the private market and competition has shown to be an illusion
" Danger of too much emphasis on profitability as a driver
" Areas that by their very nature cannot be subject to market principles
Analysis – Statements of the regulator
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New framework conditions for the regulation of fibre-based networks in Croatia
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HAKOM regulation for optical distribution networks
builds on four pillars
Relying on spatial planning documents of local governments, thereby stressing the sense of building the information infrastructure of society
Giving a particular telecom operator the freedom in choosing the area, the technological solution and the choice of network topology pose a risk to local communities, customers and market competition
Fibre-based distribution networks are the most important infrastructure of the 21st Century, whereas its development cannot be left to chance (private interests) and disorganization
Choosing the technological basis for new access networks, which should satisfy the information needs of society in the future, may not be the exclusive right of one company
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Contents
Ordinance 2
Analysis 3
Introduction 1
Conclusion and outlook 4
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Conclusion and outlook
NGA based on fibre infrastructure
Main incentives
Large challenge for each country Croatian regulator is pushing forward by defining a
deployment framework
Fibre-based distribution networks as the most important infrastructure of the 21st Century
Private investments will only be undertaken if a positive business case materializes
Rollout of fibre-based distribution network cannot be left to the interest of the private market alone
New framework as the foundation for rational long-term investments („integrated infrastructrure“)
Outlook Good chances for limiting problems with vertically integrated
operators by fostering open access infrastructure Current economic downturns viewed as opportunities for
structural reform and target investment in broadband
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