Figures are in thousands.
source: OECD (June 2001) / IDATE
June 2001
* source OECD October 2001
**: i-mode access not included
France: in October 2001, there were 6.2 million Internet
subscribers. Source ART: the turnover generated by the Internet
during the second quarter in 2001 amounted to ¤ 292 million. The
number of Internet subscribers is rising for low throughput and
broadband, at 25.4% and 7.4% respectively compared to the first
quarter in 2001.
Although
France is at a par with the European average, within this overview
the equipment of the country is lagging behind compared to the
most advanced countries.
Most
governments of the industrialised countries have rolled out
programmes - in some cases very bold programs - to promote the
widespread access to broadband platforms. Some countries (Japan,
Korea, Germany, Sweden, the Netherlands, and others) have also
planned to speed up the access to 'high broadband' networks.
Japan, for instance, has announced a programme to connect
10 million households with fibre optic in 2005; Korea is planning
to connect 13 million households to high broadband networks
in 2005; Germany has launched an 'fibre optic for everyone'
programme."
The
level of intervention by the public authorities as well as the
implementing actions of each State vary considerably from one
country to the next. However, it should be pointed out that
most governmental action programmes include proactive public
sector support.
In most cases, the spread of broadband services
is all the faster when competition exists for the infrastructures.
The competition can play out between the different telecommunication
networks (as in Korea for instance) or between the operators of
different types of infrastructures (cable versus DSL, as in the
Netherlands, for instance).
B-
B- The French Situation.
The
much smaller deployment of the cable network than in some other
countries as well as a low level of competition for the collection
or access infrastructures are the marking features of France.
To date, the offering of broadband access services
is broken down as follows:
On
the residential market, the two existing technologies are
mainly:
- Cable,
primarily covering the country's urban and suburban zones (today
nearly 8.5 million homes are connected, with the number of connectable
homes amounting to 11 million, i.e., roughly half of French
households). Noos is the market leader with 30% of the subscribers
on September 30, 2001, followed by NC Numéricable (27%), France
Télécom Cable (18%), UPC France (15%), and many other operators.
The cost for a household ranges from 29 euros (for 64 Kbit/s)
to 60 euros per month for broadband access. Operators usually
offer network access grouped with digital television.
- ADSL
(Asymmetric Digital Subscriber Line) has a much greater potential
for coverage since France Télécom projects that 70% of households
will be connectable by the end of 2002. Wanadoo is the prime
mover on this market with close to 85% of the market share in
March 2001. Total monthly cost including the subscription to
the [Internet] access provider stands roughly at 46 euros per
month.
On
the professional market, the technologies are:
-
DSL (Digital Subscriber Line) technologies via France Télécom's
Netissimo 2, offering a 1 Mbit/s access for 76 euros per month.
SDSL (Symmetrical DSL) is also expected to grow rapidly since
it offers symmetrical accesses that are more suited to professional
needs.
- The
Wireless Local Loop (WLL) that is being gradually set up enables
guaranteed symmetrical rates. A full range of offerings and
prices (from 46 euros for a service similar to ADSL to 1,830
euros for a 2 Mbit/s Internet access) exists depending on the
throughput rate with, among other things, the option of website
interconnections at 2 Mbit/s.
- These
technologies compete directly with the leased line services.
C-Speeding
up the Penetration of Broadband Access in France Requires a Bold
Policy.
Several ongoing changes will lead to the faster
penetration of broadband access platforms in the coming months:
- ·
Many infrastructure projects for data transport and collection
are taking shape, especially thanks to support from the local
authorities. These new feeders will improve traffic routing,
mainly over fibre optic, to now poorly networked areas.
- ·
The deployment of an alternative infrastructure on the PDN will
become effective as of 2002.
- ·
Unbundling the local loop should take off in 2002, hence potentially
speeding up the competition for the ADSL access offering.
- ·
France Télécom's 'activist' deployment of an ADSL offering throughout
France will help speed up the penetration of this technology
into professional locations and private homes.
However,
the CSTI considers that the conditions have not yet been met to
reach the Government's stated goal in 2005. Compared to other
more advanced countries the French situation argues for action
that does not only rely on current trends. Other special factors
also come into play, such as :
- ·
Access prices are still high for a large share of the population.
Fuelling competition and a wider offer should be encouraged
to trigger a real drop in access prices. Actually, in the current
unbundling conditions, competition remains at a minimum on the
residential market.
- ·
The financial resources set up through the Caisse des Dépôts
will probably not allow for the coverage of areas with a very
low population density even though it purports to invest in
areas with 'differed' profitability, with a return on investment
below market levels. The Caisse des Dépôts is now working on
putting together public-private partnerships, an approach combining
subsidisation with public investment.
- ·
The relative low throughputs available to consumers, the absence
of truly innovative and attractive contents dedicated to broadband
and the low penetration rate of access terminals are all factors
hindering the population's interest in broadband network connections.
The issue of increasing available throughput rates and the number
of terminals, and promoting attractive services and contents
should be addressed.
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Consequently,
the CSTI considers that :
-
·
France should adopt a bold, proactive policy
for the fast promotion of widespread access to broadband
networks and services. A comprehensive programme should
be speedily designed to marshal and cement the initiatives
of the administrations, local authorities, and private
companies.
-
·
The priority target of this programme should be the
SME (Small and Medium-Sized Enterprises) and consumers.
- ·
For the short-term, the CSTI advocates an approach hinging
on the following guidelines:
- It would be advisable to foster the conditions for greater
competition on the SME and consumer markets in zones where
the existence of several operators is warranted economically
(called zones 1 in this report) ;
- At the same time it would be advisable to diminish the
geographic area where only the incumbent operator now
has the economic wherewithal to provide broadband access
services (zones 2). This goal should be reached by easing
the market requisites for alternative operators ;
- The terms of public funding enabling the coverage of
geographic areas where no operator has any economic interest
in offering affordable broadband access have to be drawn
up (zones 3) ;
- Last, alternative technologies have to be submitted
for the areas where current technologies (cable, ADSL)
cannot be deployed because of technical limitations (zones
4).
On
the whole, even if some public investment is required to
speed up the deployment of broadband infrastructures and
to avoid any unfair distribution throughout the country,
the competitive drive is still the best guarantee for the
emergence of a diversified, quality offer at prices enabling
a truly widespread penetration of broadband technologies
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The
issue of broadband platform access is not yet the object of any
special policy on the European level (specifically, universal
service does not include these types of services). It would undoubtedly
be advisable to implement a joint approach of EU Member States
to boost national policies in this field on a larger scale.
Beyond
the goal of developing broadband access throughout Europe, there
is an increasing need for harmonising national practises throughout
Europe. The conditions of government operations underscore the
substantial disparities between EU countries. What is authorised
in one country may be forbidden in another, hence fostering unfair
treatment of both users and market players. It would be advisable
to think through a co-ordinated action for broadband access, between
regional European policy and the policy promoting the development
of the information society.
|
The
CSTI recommends that France should build on the implementation
of a bold programme promoting broadband access nation-wide
to propose the rollout of a European action programme for
broadband deployment throughout Europe, at a future European
Summit, for instance. Among other things, the programme
should address issues related to research on technologies
and uses, the regulatory framework, and the European Union's
regional development policy.
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2.
The Different Access Technologies
The
working group examined the different technologies for the local
loop. The study had a dual objective :
- One, to identify the technologies that should receive priority,
to increase the competition for 'mass' broadband services
- Two, to search for the access methods specifically adapted to
certain geographic areas (rural and mountain regions), to mitigate
the risk of a geographical digital divide.
2.1. xDSL Technologies
xDSL
technologies have some limitations:
- ·
Economic limitations: a special modem is required in user's
home ;
- ·
Technical limitations: when copper line quality does not allow
for broadband transmission, or when user is located too far
away from the nearest splitter. This technical limitation will
only affect a small portion of French households (5 to 10% according
to France Télécom). This number could be further scaled down
by setting up small, outside DSLAM configurations within 3.5
kilometres from user's location ;
- · Regulatory
limitations: the incumbent operator owns and operates most of
the local copper loops, hence limiting the competition's access
to these technologies.
ADSL
and HDSL technologies are now mature, enabling throughput rates
ranging from several hundred of Kbit/s to several Mbit/s.
SDSL
(symmetrical access, i.e., providing the same throughput in both
directions) are more appropriate for SMEs because they enable
semi-permanent links similar to leased links.
VDSL
provide higher throughputs (several dozens of Mbit/s) but over
much shorter distances. This promising technology will probably
supplement optic fibre access platforms (FTTC, fibre to the curb,
and FTTB, fibre to the building).
xDSL
access will be dealt with in part 3.
2.2.Cable
Cable,
which was originally for audiovisual broadcasting, enables broadband
or even high broadband, bilateral data transmission. This technological
change was made possible by the deployment of HFC (Hybrid Fibre
Coax) technologies combined with the development of standards
for modems (DOCSIS and DVB).
Cable
is a credible alternative to xDSL technologies. However, it is
limited to the areas covered by the cable networks. Arguably,
this alternative gave a powerful boost to the development of broadband
access in countries with a dense cable network.
In
France, the cable option is restricted to the big cities. The
technology is a vector fuelling the deployment of broadband services
only through a part of the country. However, it is a windfall
for the start-up of broadband access because today it is the only
alternative to the access infrastructures of the incumbent telecommunications
operator. The use of cable could spread and the role of cable
as a 'prod to competition' must not be underestimated. The opening
of this infrastructure to a wider diversity of services should
certainly be considered.
Besides, radio frequency access technologies (especially at 40 GHz) make it possible to broaden the geographic area of cabled networks while limiting cable-operator investments. The growth of this network may entail other broadband options.
2.3. Satellites
Satellite
technologies are the only ones that can reach any spot no matter
how remote. Nevertheless, they do suffer from the lack of any
simple return path (the phone line often has to be used with the
satellite) for Internet applications. However, there are now asymmetrical,
two-way, broadband communication solutions that can meet individual
needs.
Nevertheless,
the cost of the matching terminals is still high and satellites
will be only for areas with a low population density where any
other access is technically difficult or not economically viable.
Besides, the special properties of satellites (multicasting) may
be appropriate for special uses.
Furthermore,
offers for symmetrical link-ups to SMEs are now available and
are still current (VSAT).
|
The
CSTI recommends that the public authorities should study
the possibility of making spatial segments available for
broadband access in weakly populated areas which are hard
to reach with cheaper access methods (especially Wireless
Local Loop) within an overall regional development policy.
The CSTI also recommends:
- Support to the development of two-way, non proprietary
terminals ;
- Exploration - especially with satellite TV broadcasters
- of the regulatory and financial conditions in Europe for
Internet services via satellite.
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2.4. Fibre Optic
Fibre
optics (FITL: fibre in the loop) can enable very high capacity
local loops with a wide coverage radius. Recent developments have
fostered the emergence of technologies for passive optical networks
(PON) that limit the need for electric installations along the
infrastructure, hence slashing costs.
Several
types of configurations are feasible - FTTH (fibre to the home):
fibre optic direct to user
- FTTB (fibre to the building/to the business): fibre optic to
the ground floor of buildings
- FTTC (fibre to the curb): fibre optic stops at the last splitter
In the last two cases, a different technology (wireless, xDSL, or plastic fibre) has to be used to reach the end-user.
Part 4 will be entirely dedicated to fibre optics
2.5. Wireless technologies
In
theory, the Wireless Local Loop provides alternative operators
with the most efficient way of dispensing with the infrastructures
belonging to the incumbent operator. To date, three frequency
bands are mainly dedicated to this technology (MMDS: 2-3 GHz ;
LMDS: 26 GHz and 40 GHz); plus the 1880-1900 MHz band relying
on DECT technology.
Two major hurdles apparently curtail the possibility of a major penetration of these technologies on the consumer market.
- For high frequencies, user terminals have to have a direct line-of-sight with the base station. This topological constraint may considerably check the number of users that can be picked up by each cell, hence restricting the capacity operators may have to make a profit on their investment. However the direct line-of-sight at 3.5 GHz is much slacker since it is not indispensable at this frequency. Furthermore, the range is limited.
- User connection is still expensive because of the high cost of the equipment and the obligation to install an antenna coupled to a transceiver at end-user's location.
As result, the priority target market is SMEs because of the above constraint. The Wireless Local Loop is also feasible in special areas (rural areas at 3.5 GHz, areas with a high density of higher frequencies) or as an addition to cabled networks or to optic fibre access platforms.
Therefore, WLL technologies are not the universal solution for the connection to broadband networks. However, they may be adapted as a supplement to wired technologies in some geographic areas, or for certain user categories (SMEs, for instance).
Ongoing changes in wireless technologies are offering new opportunities. These changes should make it possible to deploy WLL technologies in better technical or economic conditions.
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Despite
a difficult start in France, wireless technologies are alternatives
that make it possible to dispense with existing access infrastructures.
For this reason, the CSTI thinks it advisable to examine
the ways of re-launching the deployment of this technology.
Improvements in several different areas can be envisaged:
- The optimisation of spectrum use should
be pursued: the 'fallow' frequencies owned but not operated
by operators should be redistributed, for instance.
- The spectrum constraints now restricting
the usable 3.5 GHz frequency band should be examined. Broadening
this band would make it easier to deploy broadband access
solutions in (rural) areas with a low population density,
which are not covered by wired solutions (DSL, cable). Also,
it would be advisable to pursue the standardisation efforts
for this technology, with a view to increasing competition,
hence lowering terminal costs.
-
At the same time, studies and testing in rural areas should
be conducted to validate the use of 3.5 GHz frequencies
combined with various other technologies, to provide access
to populations without (zone 4). This solution should be
proposed as an alternative. On the whole, the regulatory
framework for using this frequency band could be re-examined
so that it could be more widely used in weakly populated
areas.
-
Tests at 40 GHz should continue to check whether this technology
is an economically and technically appropriate means of
extending the coverage of cable networks.
-
The reduction of radio station costs: R&D work should be
conducted for this purpose.
Overall,
the CSTI considers that radio technologies are potentially
important technologies, with a view to covering zones 3
and 4. Accordingly, it is probable that the exclusivity
terms now governing licences curtail the deployment of the
WLL in these areas. An easing of said terms could be proposed,
where appropriate.
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Wireless technologies can also be used for broadband local networks to cover a building or a small geographic area. These broadband technologies use 2.4 GHz or 5 GHz frequencies and are now standardised on an international scale (802.11a, HYPERLAN, 802.11b).
This kind of network may cover home or corporate communication needs but they may also supplement wired access platforms (optic fibres), to reach end-users from a connection node located at the food of buildings (WIFI architectures; the 2.4 GHz band, currently banned in France; however it would be advisable to organise and monitor regulations in this area). Wireless networks are potentially economical solutions for user penetration without having to install new cables or use existing infrastructures.
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The
CSTI recommends that as a supplement to the ART survey,
a succinct analysis should be made of the technical and
regulatory conditions governing the use of these frequencies,
so that their use can be broadened to include the access
to broadband and high broadband platforms.
Life-size
tests should be conducted on the use of these networks and
on these new access modes at the same time.
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2.6. The Power Grid
The use of the power grid to route broadband data would also provide an alternative to using the infrastructures of the incumbent operator. Several obstacles stand in the way of feasible deployment:
- Legally, the specialty principle defined by law limits the EDF's (Electricité de France, electric utilities) operating capacities to supplying electricity
- The number of accessible users at the level of a central station would be limited considering the topology of the EDF power grid
- It appears the accessible throughput per user is limited
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While
recognising these limitations, the CSTI feels that the option
of broadband access via the power grid should be validated.
The CSTI recommends that two kinds of actions be rolled
out at the same time:
-
· A comprehensive study of the actual capacities of this technology and its economic viability, taking into account foreign experiences (failure in the United Kingdom, testing resumed in Germany) and ongoing French tests (Alsace).
-
· Exemptions to the speciality principle could be authorised to conduct field tests and allow the EDF to test various technical solutions before initiating durable actions.
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2.7.
Terrestrial Digital Television
The
digitisation of television distribution via the radio relay channel
will give birth to a broadband digital platform that can reach
almost every home. Broadband interactive services can be combined
with TV programmes. However, this prospect is faced with major
difficulties:
- Total bandwidth is quite small compared to cable and satellite
- French regulations give priority to audiovisual programmes over
interactive services
- In the short term, the deployment of a return channel supposes the use of the wired network (DSL). In the long-term, a radio relay channel could be considered even though this solution is still at the prototype stage
- Last, the penetration of terrestrial digital television will be gradual over the next 5 to 10 years
Radio digital television offers few prospects for the short-term speed-up of broadband access in France.
2.8 Technologies Further Down-the-road
Some more forward-looking alternatives were examined:
- High altitude platforms (balloons, remote-controlled planes)
- Local laser loops
These technologies are at the experimental stage but may eventually provide promising alternatives.
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Overall,
the CSTI recommends the initiation of several research programmes
to improve the performance of mature technologies (WLL,
fibre optic, Ethernet networks (E-DSL), local wireless networks
(802.11), and so on) and the study of more forward-looking
alternatives.
Considering
the importance of xDSL technologies, it would be advisable
to start research work to determine the maximum throughput
rates that these technologies can reach.
This
broadband research programme should be a united nation-wide
or even Europe-wide effort relying on the expertise of research
organisations and industrialists.
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3.
Speeding up the Penetration of Access to Broadband Technologies
The
deployment of broadband access must be based on an approach regardless
of the technology. However, the first part is mainly dedicated
to xDSL access, since no other technology today offers a credible
alternative for lowering broadband service access costs throughout
the country.
The
recommendations in this part come partly under the jurisdiction
of the regulatory policy controlled by the Autorité de Régulation
des Télécommunications (ART, French telecommunications regulatory
authority). It will be this institution's job to issue the final
ruling on the appropriate measures to take. The decisions concerning
the measures can only be made after consultations between the
alternative operators and the incumbent operator. The very nature
of the consultation cannot be done within the framework of the
CSTI. Consequently, the recommendations will have to be considered
as a contribution to the ongoing discussions.
3.1
. Lowering Access Prices
The issue dealt with here concerns the markets where expected profitability warrants the existence of several operators (zones 1, defined page 6). The related issue of the low profitability areas (with a focus on weakly populated areas) and the areas that cannot accommodate an ASDL connection will be addressed in paragraph 3.2.
For most French users, DSL technology is the best option for the access to broadband Internet services or even to video channels (70 % of the phone lines should be ready to be outfitted with this technology by the end of 2002). After a bumpy start-up, ASDL has been spreading quickly in France, with 400,000 subscribers at the end of 2001.
Although prices in France are comparable to rates in neighbouring countries, they are still at a level that does not seem to allow for the widespread, speedy distribution of broadband access to households. The drop of the access price can only be accelerated by a build-up of the competition on the DSL market, and by the entry of alternative operators throughout a larger share of the country.
DSL technology enables a broadband Internet offering on the copper pair of the standard telephone network providing a modem is set up at user's location and special equipment (DSLAM) is installed at the user's splitter. Unbundling has been in effect in France since January 1, 2001. It enables alternative operators to offer their own DSL services on France Télécom's local loop.
Arguably, unbundling has not enabled any alternative operators to capture a significant share of the DSL market in any country. A report by the Federal Communications Commission dated February 6, 2002 on the availability of broadband access in the United States points out that in the US where unbundling was passed as early as 1996, 93% of DSL access is supplied by the incumbent operators while a mere 7% is supplied by alternative operators.
Considering that unbundling tariffs are 'set to match the related costs' by law, it can be surmised that if these costs do not drop fast enough, unbundling will actually spread only when alternative operators can make a profit on their expenses, by proposing services other than broadband Internet (voice on DSL and video, for instance). Only then will unbundling be likely to become an effective stimulation of the offering, through the development of competition. This may take another one or two years. Hence, it would be advisable to look at transitional measures.
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1
- Specifically, the goal of promoting the emergence of effective
competition on the individual consumer market should be
retained.
The
drop of the equipment and network cost curve will have the
indirect effect of lowering prices accordingly.
Furthermore,
the CSTI believes that a temporary drop of unbundling prices
under cost would allow unbundling to rapidly trigger a wider
leeway for competition in terms of geography and accessible
population.
It
would be expedient that the public authorities working with
the Autorité de Régulation des Télécommunications (ART)
identify the most efficient and least destabilising levers
for the incumbent operator
2
- At the same time as this temporary drop in prices to fuel
market take off, a multiyear visibility of the conditions
governing unbundling should be provided for alternative
operators. Indeed, the predictability of the conditions
governing unbundling can warrant investments whose profitability
can only be considered over long periods.
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3.2. Public Investment in the Infrastructures
More than just improving the competitive conditions of the access offering, the public authorities can act by providing aid to investments in the infrastructures that are shared by, and open to the different operators.
Indeed,
an improvement of the unbundling conditions can only stimulate
competition in high-potential areas while reducing the areas where
only France Télécom may have an interest in offering the service.
But in the short-term and considering current legislation, only
aid from the public authorities will allow for coverage of those
areas where no operator can find the conditions of a profitable
market.
In
view of this, the local authorities were granted the right to
invest in the infrastructures. Similarly, the July 2001 CIADT
asked the Caisse des Dépôts et Consignations to allocate ¤228
million from its own funds over a five-year period and grant preferential-rate,
thirty-year loans for a total amount of ¤1,524 million to infrastructure
and telecommunication service projects.
The
public authorities should support these developments by defining
a nation-wide strategy that will meet the goals of regional planning
while monitoring the proper use of public investments.
In connection with this, it would be appropriate to note the public consultation by the Prime Minister on the implementation of the right of the local authorities to intervene on issues related to telecommunication infrastructures (February 6 - March 6, 2002).
- · Three levels of analysis should be addressed:
-
The interconnection between 'long distance' networks close to
the areas to be served
-
The deployment of a collection infrastructure in the relevant
areas
-
The implementation of solutions enabling complete coverage at
the level of the local loop
Even though the major problem is access, it would be advisable to make sure that the 'long distance' and collection networks make it possible to route traffic in acceptable economic conditions for a wide range of operators.
3.2.1.Actions
for 'Long Distance' and Collection Networks
Any
public policy leading to investment in the local loop in areas
where the market does not allow complete coverage should also
address serving these areas and connecting them to 'long distance'
networks. Actually, the infrastructures funded by the public
authorities should be open to any operator wanting to provide
a service in these areas. Hence, there should be no service 'bottlenecks'
and service plurality should be enabled at the same time. This
requisite diversity should not, however, lead to double investments
in places where the traffic does not warrant such.
Two
potential problems have to be solved.
a-
On the one hand, it would be advisable to make sure that 'presence
points' exist on the 'long distance' networks to make sure that
traffic entry and exit provides fine coverage throughout the country.
There usually is this kind of connection node in each region,
which today does not allow for an economically viable access for
collection networks that are often structured at the level of
the department or the big cities. Accordingly, the goal of
a diversified offer for 'long distance' networks connected at
the departmental level should be retained.
b-
On the other hand, the shortfalls of the collection networks in
certain weakly populated areas of the country have to be mitigated.
The action of the public authorities, with a focus on the local
authorities, in this field has begun to show. Various types of
arrangements have been made, with variable degrees of dependence
on the incumbent operator.
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The
action of the public authorities (the French state and local
authorities) in this field should set the goal of covering
the areas where collection networks with enough capacity
exist. These public investments in collection infrastructures
should promote a fair access to these areas while avoiding
unwarranted duplication of the infrastructures.
Two
types of arrangements should be considered:
1
- In places where the local communities are looking to complete
existing infrastructures (mainly the infrastructures of
France Télécom) - the optic networks should be meshed where
needed. This is the least expensive hypothesis: it is based
on construction, and does not cause network redundancy.
It should be coupled with conditions allowing the community
to make the collection service available to rival operators,
to avoid the development of a monopoly on a part of the
network that has been partly funded by the public authorities.
The already existing operator in the country should be obliged
to allow third operators to use its capacity (in acceptable
conditions), thus allowing third operators to access the
infrastructures funded by the public authorities.
2
- In places where the local authorities have deployed a
global construction programme of a neutral, open infrastructure.
This scheme is more expensive but has the merit of being
more readable and easier to deploy. It also precludes any
dependence on an operator who might be partly present. This
operator should receive preferred treatment only when sharing
the existing infrastructures is impossible. The use of the
PDN (see part 7) will probably make it possible to generate
substantial economies for this type of project.
While
acknowledging the need to adapt the type of arrangements
to local features, the CSTI feels that general guidelines
should be drawn up at the national level so that the local
authorities can rely on common guidelines for their investments
in collection networks in those areas requiring public authority
support.
These
guidelines should be defined jointly with ART and address
the local investment strategy for this type of infrastructure,
and the legal and regulatory conditions framing the operations
of these networks (for instance, it would be worth re-examining
the fact that local authorities are banned from adopting
the status of operator when they invest in complete networks).
Accordingly,
local projects could be part of the 'master plan for broadband
service'. The State-Region planning contracts could support
the regional deployment of said strategy.
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3.2.2.
Access Investments
This
is the most sensitive and most important link in the chain of
public action.
We have set it apart even though in some cases the proposed processes must be deployed in synergy with the above-described processes for collection networks.
Actually here is where the issues related to zones 3 and 4 become especially decisive. In zones 1 and 2, the local authorities can be satisfied with limiting their operations to the interconnection of the big cities with the long distance networks and the deployment of satisfactory collection networks.
For
zones 3 and 4, public intervention on the local loop appears as
the only mid-term recourse for having an innovative offer for
the terrestrial networks (the alternative being the satellite
offer whose service offer and pricing are not comparable with
terrestrial networks although their contribution is unquestionable
for remote areas).
First,
it would be advisable to define a method for identifying the areas
where only the intervention of the public authorities can enable
a broadband access offering, to limit the extent of public investment
and not upset the normal workings of competition.
-
· Determining Zones 3 and 4
The first question is when should said zones be determined. The deployment of this approach will probably have to wait until the market reaches a certain level of maturity and until stable, predictable economic conditions exist.
Before launching this process, the notion of 'lack of service' should be precisely defined at a national level. To do so, the following facts will have to be detailed:
- The date when said 'lack' was reported
- The precise definition of the services whose deficiency is reported in certain areas of the country: the technical and pricing characteristics of the relevant services
- Identification of the geographic areas under consideration
- Definition of the absence of service: is the presence of a single operator considered as satisfactory? (Some European countries have opted to consider any region where there aren't at least two operators as a deprived region).
It would be advisable then to define a generic, nation-wide method for the practical determination of said areas.
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The CSTI recommends the initiation of a process to determine zones 3 and 4 based on the following approach:
- The launching of a national consultation between the operators, ART and representatives of the public authorities to detail the guidelines and modalities for defining the zones where public intervention may be warranted to enable access. The goal would be to establish a common definition of the 'areas that do not allow for a profitable offer of new, broadband terrestrial access means'. Any constraints under European law would be taken into account during this definition phase.
- The identification process of the areas should then become a market consultation, under legal conditions that remain to be determined. This consultation should probably be conducted jointly by the French State and the local authorities based on the general guidelines laid down on a national level. As part of this, the operators would be requested to specify the sectors they do not plan to cover within a deadline that would have to be defined according to the political objectives for nation-wide coverage and for a service level, defined at the national level.
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- · It would then be advisable to define the modalities of public investment
In the areas where the above-proposed procedure has reported a lack of service, the public authorities (the French State and local authorities) would finance all or part of the access infrastructures required for a broadband service offer to these areas.
Two additional conjectures may exist:
-
- The first case would be where a DSL offer is technically and economically more appropriate for meeting broadband access needs.
Within this framework, the local authorities would finance the active equipment to produce broadband transport service over the local loop (DSLAM for instance). It would also finance the connection of these local loops to a 'neutral' collection network that would be financed by the local authority.
The problem of the conditions governing the use of the incumbent operator's local loop is posed. It would be expedient for the local authority to be able to open the publicly funded infrastructures to any operator intending to offer a service. The incumbent operator must not be granted a preferred position entailing the awarding of the contract to this operator once all the local calls for tenders are over.
Several
more or less unmanageable solutions do exist that can be deployed
to allow for a fair access to the local calls for tenders.
o
It is possible to define the conditions governing the access to
France Télécom's local loop, specific to the deprived areas. Accordingly,
a special unbundling would be created for those areas of the country.
o Alternatively, the local authority could buy back the wired access
infrastructures from the incumbent operator in areas where only
the intervention of the public powers will allow access to broadband
services.
o It is also possible to consider a greater reliance on the incumbent
operator. It would probably be expedient to make it mandatory that
the incumbent effectively separate its transport and service activities
in these areas, for this scheme to be acceptable in terms of the
competition law. The incumbent operator will have to demonstrate
that it is offering alternative operators the same access conditions
to these infrastructures as its own.
None
of these solutions are easy to implement and the issues will probably
have to be thought through to define the modalities governing
the interconnection of the infrastructures funded by public subsidies,
to the local loop. However, the solution to this problem must
be found lest coverage of deprived areas be the sole responsibility
of the incumbent operator.
-
Alternatively, the local authorities may consider building a full,
direct-to-subscriber network (for instance, 3.5 GHz technology,
802.11 technologies, satellite technologies, and so on).
This
other scenario means total freedom from the local loop belonging
to the incumbent operator. This option should be given priority
in cases where DSL technology is inappropriate (zones 4). In these
areas, wireless technologies such as WLL technologies (3.5 GHz)
now seem to be the most promising. But any other technology may
be considered to extend broadband access in optimum conditions.
Several
schemes for the legal form governing the operations of said networks
could be considered. The relevant local authorities may rely on
an existing operator or decide to run said services directly or
indirectly, after a call for tenders.
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The CSTI recommends the local launching of calls for tenders in zones 3 and 4. After this procedure, general-interest service delegations would be granted to the operator having offered the most advantageous conditions, in compliance with the most appropriate legal form.
These calls for tenders should be carried out under conditions that do not confer any preferred treatment to France Télécom, even in those areas where the use of the local copper loop seems to be the most appropriate solution (see above). The deployed procedure must make sure that operators are on an equal standing.
The CSTI recommends the speedy examination of the regulatory conditions required for reaching this goal of neutrality.
The evaluation of the required funding will only be possible once the identification process of zones 3 and 4 (one estimate produced figures ranging from 3 to 10 billion euros) is over. The funding could be granted through State-Region planning contracts that are coming up for review.
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3.3.
Support Measures
The
CSTI considers that this investment programme requires the deployment
of the following support measures:
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The CSTI advocates the consolidation of NICT expertise hubs within the administration of the French State, available to the local authorities, to define their needs, the project engineering and arrangement of investment projects, with a focus on broadband access infrastructures. Said hubs should ensure the methodological homogeneity of project financial arrangements throughout the country, specifically through a national co-ordination.
These hubs could also be assigned to carry out an awareness campaign and a mission to support SMEs. SMEs suffer more from a poor understanding of the capacities provided by ICT than from the lack of an offer suited to their needs.
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- ·
National Monitoring
The deployment of these actions require monitoring and co-ordination
at a national level.
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The CSTI proposes the creation of a steering committee (a 'mission for broadband'). The Committee should include all the relevant State departments (DATAR, SEI, MI, and so on) and should work with the Autorité de Régulation des Télécommunications (the French telecommunications regulatory authority). The Committee would be asked to define the strategic policies in support of investment projects, make sure the projects are being conducted properly, and monitor market trends.
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3.4.
The Public Authorities, Broadband Network Users
At the same time as these incentive measures, the public authorities could play a key role through a bold policy to connect public establishments.
Said
investment policy must create innovative services and generate
broader uses of these networks. The policy should also set a goal
of using the powerful lever of public control to develop the technological
offer while promoting multiple solutions.
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Accordingly, the CSTI recommends that the French State and the relevant local authorities connect all the research and educational institutions, and libraries to the broadband networks within a two-year deadline.
Similarly, hospitals should be able to benefit from throughputs fast enough for the set-up of a large-scale proactive policy in favour of telemedicine.
Also, the RENATER network and the RNRT platforms should become the broadband technology standard setters in France. While preserving their mission of connecting research organisations, these networks should become platforms for testing new technologies, new services, and new uses.
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4.
The Access to High Broadband Networks
The
technical limitations of xDSL technologies as well as the 'dependency'
on the incumbent operators they generate make them transitory
access modes that will gradually make room for high broadband
technologies.
Optic
fibre as an access technology now seems to be a very promising
path. Two mains reasons back this statement:
-
Optic fibre is now used throughout the long distance networks
and is dominant on the 'collection' part of the networks. Optic
fibre technology is coming closer to subscribers, making it technically
possible for an optic extension at an end-user's location.
- The Ethernet protocol has become the most widespread standard
on the broadband local loop, especially on optic fibre mediums.
The equipment for this protocol is amortised over huge quantities
because of its widespread use in local corporate networks. Consequently
the costs for high broadband terminal equipment will be slashed.
The
problem of optic fibre cabling require the set-up of an intermediate
home network between the high broadband access platforms and the
terminals. Several technologies are possible (copper pairs, coaxial
cables, wireless networks, or electric network). However, wireless
technologies seem very promising because of easy installation
although the standardisation is still not stable and several standards
are still competing.
4.1.
The 'High Broadband' Access Experiences Abroad
Many
OECD countries have tested FTTx technologies while investments
in this area are growing apace.
Sweden
is the most interventionist European country in the field of information
technologies. It has maintained strong pioneering traditions in
the field of telecommunications since the early twentieth century.
The goal of the Swedish government is to propose a 5 Mbit/s access
for everybody by 2005, with a minimum choice of 5 operators. A
complex system of subsidies and tax exemptions has been set up
to further this goal.
Germany,
the Netherlands, and Great Britain have also initiated programmes
prioritising optic fibre for the deployment of infrastructures.
Japan, Korea, Singapore, Hong Kong, and Malaysia also have a stated
objective of covering most households with FTTB by 2005.
The
testing now emerging in Europe relies on public and private prime
movers.
-
In Sweden, the regional authorities (with a focus on community
authorities) play a major part in building metropolitan 'optical
loops'.
MAN
(Metropolitan Area Network) collection optical loops are the dynamic
core of the access infrastructures to 'high broadband' (FTTC)
in Sweden.
-
The regional authorities (kommun) are
often the funding source of the optical loops. They rely mainly
on the dealers of electric utilities dealers that the authorities
usually own. They have extensive financial resources because of
the recent deregulation of the electric market. The cities of
Vasteras (Malarenergi), Gavle (Gavlenet) and Stockholm (Stokab)
are examples of this approach.
-
In some cases, the local authorities are directly responsible
for initiating the construction of the infrastructure. The most
well known example is Tierp (KanalTierp) where the community funded
the entire infrastructure and handed the management over to a
neutral operator (DigidocOpenIp). The operator has to open his
network to all service suppliers.
It
should be pointed out that many authorities in rural areas or
on the outskirts receive aid from the government and the European
Union (FEDER Fund) in the target 1 and 2 zones.
In
the Netherlands, the public authorities have prioritised testing
in heavily populated, economically thriving areas to promote new
applications and services.
The
Netherlands have recently launched a bold project with the creation
of the 'Knowledge Neighbourhood' (Kenniswijk). The goal of this
innovation platform is to enable the Netherlands to acquire a
testing site for new applications and services linked to high
broadband networks in an urban housing zone, to reach a wide population
spread. Accordingly, the technological, economic, administrative
and sociological impact can be measured, hence making it possible
to size the national project that will be decided according to
the success of the Kenniswijk.
The
Ministry for Transport, Public Works, and Water Management was
responsible for launching the project. It started with a national
call for tenders during the first quarter in 2000. Eindhoven was
chosen out of the fifteen cities that expressed an interest in
the e-City. This project is special undoubtedly because it is
mixed, bringing together public and private prime movers. Actually,
the execution of the project scheduled for mid-2002 depends on
the participation of private partners at a par with public involvement
(shared between the ministries, regions, local administrations,
universities, and medical corps). One hundred million florins,
i.e., ¤ 45 million, will be committed on both sides.
-
Innovative companies in FTTB and FTTH are emerging
Bredbandsbolaget
(B2), a Swedish company owned 34% by NTL, is the first FTTU (user)
bandwidth operator to have suggested building the optical infrastructure
of the 'last mile', thanks to an agreement with real-estate owners,
among others. This access platform delivers throughputs at 10
Mbit/s to the end-consumer in some residential neighbourhoods.
E-bizcom
is a private company partnered with semi-public interest licensees.
It is currently deploying Italy's most efficient networks in Milan,
and soon in Genoa, Turin, Rome, and Naples (MAN-Metroweb and FTTx-Fastweb),
offering symmetrical 10 Mbit/s throughput rates.
These
companies are clearing the way for added-value service offerings
for consumers (video, telephony, music, and so on).
4.2.
Recommendations for Government Actions
The
deployment of 'high broadband' networks is a major societal challenge.
The Asian countries now see it as one of the main factors for
re-launching their economy. Other countries such as Sweden consider
that these networks will open the most remote areas of its country
to the outside world, as did transportation in the early century.
Overall, the information society will only take off with the large-scale
penetration of broadband and high broadband networks. The networks
are critical for the corporate competitive advantage, and will
revolutionise the relations with administrations, the access to
knowledge and training, land-use management, and so on.
In
the light of international experience, the CSTI considers that
the government must urgently initiate a bold programme integrating
the issues related not only to the deployment of optic networks
but also to the network-related technologies, applications and
services.
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The CSTI recommends that this programme include the following:
1- Large scale testing
The CSTI advocates the launching of tests of subscriber
optical connections in one or several urban and/or suburban
areas.
- Thus, several thousand households should be covered
to have an effect of scale that will make it possible to
test several access platform technologies and warrant the
development of innovative services on these platforms. The
choice of venues should take into account the prior existence
of optical loops, to limit investments.
- This deployment will require an investment of two
to three thousand euros per household. The funding should
be shared between the public authorities (the French State
and local authorities) and private operators wanting to
run these new technologies. Funding such as tax credits
(for cabling the buildings, for instance) should be prioritised
over direct funding, as far as possible.
- Several kinds of technologies would be tested during
this programme: fibre optic to the end-user (FTTH), FTTB/FTTC
technologies coupled with VDSL or to wireless networks,
and so on.
- The tests should not only examine the technologies
but also, and above all, validate economic models of public/private
partnerships for the anticipation of a later, more widespread
deployment throughout the country. The public authorities
should actually serve as a trigger and incentive of the
private sector. The public authorities must create the conditions
for the emergence of a 'high' broadband market, without
substituting for the market.
- These tests should make sure that new contents and
services are created. A close observation of uses as well
as awareness and training operations should be conducted
at the same time as the building of the networks per se.
- The choice of private partners should be made through
calls for tenders. For these infrastructures, it is essential
to enable the deployment of competition for every network
component. Potential private partners could be the utilities
or public works companies that could provide support for
cabling the cities and buildings.
2- The tests should be based on R&D programmes carried
out especially within the technology networks (RNRT, RNTL,
RIAM, and so on).
- Although French and European industrialists are proficient
in ADSL and ATM technologies, it is uncertain whether the
switchover to Ethernet or wireless optic technologies might
not lead to a greater dependency on US industry. The CSTI
suggests that the public authorities increase their research
efforts in these new technologies as of now.
- They would help support the development of skills
and expertise in the fields related to high broadband technologies
(access protocols on optic fibre, technologies of wireless
domestic networks, and so on) and to the related services
(video on request, decentralised content distribution, and
so on).
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5.
The Access terminals
The
effective access of the French population to broadband services
will always be limited by the penetration rate of the terminals
likely to receive said services. Hence any proactive programme
promoting broadband access platforms should be backed with measures
to increase terminal penetration.
The
terminals to look at are as follows:
-
End-of-line equipment (DSL modems, cable models, WLL receivers,
and so on)
- Personal computers linked to a modem for service access
- Any equivalent equipment enabling network connection and service
operations on a computer or television screen
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Defining the conceivable measures is outside the scope
of this working group but should be at the core of any policy
promoting broadband
- The Government should consider incentive measures
based on a partial tax exemption of the equipment that should
eventually become mass consumer goods. European regulations
that might interfere with this kind of measure should change
to enable Europe to catch up with the United States and
some Asian countries.
- Direct aid targeting certain categories of the population
should also be looked at.
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Also, broadband deployment will go hand
in hand with the development of broadband domestic network infrastructures
that should enable the roll out of new applications:
- Remote surveillance,
- Home video networks
- Games
- Remote controls
In
France, the mishaps of home automation in the seventies and eighties
have apparently curbed the interest in these kind of technologies
that are now booming in Asia, the United States, and Scandinavia.
The
CSTI considers that further research and development are required
on these kinds of technologies.
The
CSTI would have to extend its work to conduct a comprehensive
study of these issues.
6.
The 'Applications and Services' Contents (jointly
with group B) )
Besides
the services matching current Internet uses (the Web, e-mail,
newsgroups, and so on), several offers should grow by building
on the upswing of broadband networks.
6.1.
Voice/Data/Image Convergence
Promoting the availability of broadband and high broadband access
for consumers will prompt the rise of service offerings that can
combine the Internet, telephony, and video on the same medium.
Voice transport technologies on the Internet protocol as well
and image encoding improvements have already made the convergence
of these services possible. Specifically, the broadcast of 2 or
3 video channels on ADSL is possible; by enriching the service
offer, it can contribute to the penetration of broadband.
Accordingly,
access offers to television channels on broadband data networks
will emerge as will the availability of audio and video contents
that can be downloaded on request. Broadband networks can also
become an alternative to 'standard' distribution and content exchange
networks.
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The public authorities should quickly clarify the regulatory status of the services accessible on the broadband data networks, with a focus on voice and image transport.
It would be advisable to promote the emergence of said services that can help amortise access costs over a wider range of services while creating a loss-leader for the access to broadband networks.
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6.2.
Special Contents
The public authorities can also play a key role in creating special contents on the broadband networks.
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The CSTI advocates the rollout of programmes for the creation of contents in the areas of culture (events, heritage, libraries, and so on), education (educational programmes controlled by the Ministry for Education), and health (medical information, for instance). These contents will combine the attraction of images with the opportunities provide by interactivity.
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6.3.
Teleservices in the Home
The build-up of broadband should also prompt the emergence of new uses, such as telework, distance teaching and training, personal content design, interactive games, and so on. These new uses have begun to emerge with the Internet, now available at low throughput rates. They still need to be re-invented and increased with the arrival of broadband networks.
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Although the public authorities do not have a prominent part to play in the emergence of these new services and uses, they should incite and facilitate private initiatives in this field on a national, but above all local level. Approval mechanisms could be set up to select the most innovative services in areas of general interest, for instance.
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7.
Special Networks Cases
7.1.
IPv6
The
move of the basic Internet protocol up to a new generation (IPv6)
can provide the required changes for the deployment of new functional
capabilities for high-speed Internet. It is also a unique opportunity
for propelling France and Europe's position to the leading edge
of Internet deployment and new related services. Also, since this
new protocol authorises more Internet addresses, its widespread
use is likely to leverage the use of third generation mobiles
or of equipment with built-in Internet access (automobiles, consumer
electronics, and so on).
The
European Council held last Spring called for an efficient, fast
transition over to IPv6 and invited the Member States to gradually
introduce it into their own networks.
In
France the experimental network platforms deployed by the RNRT
have this protocol while the RENATER network plans to be fully
equipped with the protocol by the end of 2003.
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· Consequently, the CSTI recommends an expeditious switchover to IPv6 throughout the public domain networks and the rollout of a testing programme of the new services in this field, using the technological research networks, for instance (RNRT, RNTL, RIAM).
· The CSTI recommends the creation of an observatory whose mission would be to encourage the switchover to IPv6 and to monitor the progression of its deployment in France.
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7.2.
Case of the PDN
The Government has decided to initiate a study of broadband feeder deployment on the infrastructures of the Réseau de Transport de l'Electricité (PDN, power distribution network) created under the February 2000 law. A working group steered by the Minister of State in charge of Industry is responsible for studying the technical and legal modalities for said deployment.
Most
of the high voltage powerlines can accommodate optic cables, either
within a skywire or by twisting it around the conductor. This
type of installation incurs much lower costs than the standard
underground installation along a structure. The density of the
country's electric grid is such that some 1,200 cities are near
'source points', the PDN network terminations.
The
possibilities of the PDN network can be used to complete the existing
optic fibre networks (meshing supplement, service to points that
were not considered up to now because of cable installation costs),
subject to the adoption of the required legal provisions. The
PDN could play an important part in speeding up the territorial
coverage of collection networks and the meshing of 'long distance'
networks with financial aid from the local authorities. The networks
would make it possible to connect every territorial point where
broadband platform nodes are required, locations that are not
handled by the operators through the backbone network.
The
set-up of these collection networks could draw on PDN possibilities,
either to build the entire collection network, or only a part
of it. It would be economically advisable that the network designer
draw as much as possible from the existing infrastructures whomsoever
owns said infrastructures.
| The CSTI acknowledges
the advantage of the PDN network for providing the country
with broadband (and later high broadband) service and recommends
that any obstacles to its use be quickly removed so that the
local authorities can begin testing in several regions by
2002..
The deployment of these networks assumes that an appropriate, stable legal framework has been defined and the regulatory modifications that might be necessary are quickly passed. The informative note by the working group of the Secretary of State with responsibility for Industry clarifies this framework.
Last the issue of extending the infrastructures into the networks owned by the townships and electrification syndicates should also be dealt with. Indeed, these networks supplementing the PDN networks can provide major opportunities for the set up of collection or service networks.
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CONTENTS
1
- SEVERAL FACTS
2
- THE DIFFERENT ACCESS TECHNOLOGIES
3 - SPEEDING UP THE PENETRATION OF ACCESS TO
BROADBAND TECHNOLOGIES
4
- THE ACCESS TO HIGH BROADBAND NETWORKS
5
- THE ACCESS TERMINALS
6
- THE 'APPLICATIONS ET SERVICES' CONTENTS
7
- SPECIAL NETWORKS CASES
