Is broadband a utility (part 3) - Open Access?

Last month, I asked the question whether more governments should follow the Australian lead and take the lead in investing in a next generation broadband network.

The latest is this saga is that the Australian government has earmarked an 'initial investment' $3.6 billion into its National Broadband Network. The NBN promises Fibre-to-the-Home (FTTH) delivering 100Mbps broadband to 90% of Australian homes and businesses. The model of the NBN will be that of an open access wholesale carrier.

The question of open access is one that is creating a lot of debate right now. In the UK, for example, you have BT building out its NGN and Virgin Media, the only cableco after the implosion of Telewest and NTL, both coming under pressure to open up access to their network. In the US, the debate is even more fierce because the closed cableco networks are still the dominant providers of high speed internet.

The big question is though (and this is the argument used by regulators like the FCC), why should telephone companies invest in high speed internet infrastructure, if all they are going to end up being is relegated to wholesale providers of commoditised bandwidth to other ISPs?

It will be interesting to see how the BT 21CN wholesale model pans out. Just what will the terms be for ISPs looking to use the network? Will BT continue to make the process of choosing an ISP other than themselves so much harder and more tortuous as to incur the wrath of the regulator? Or will the regulator say fair's fair, they made the investment so they need to make the money back?

Ultimately, it really does seem as if the Australian model is the way to go. Competition of course drives innovation ... but only if it delivers differentiation and advantage. Where's the value in investing and innovating if others can just come along and stick their own label over the top?

Is broadband a utility?

The news today at OFCOM has given a green light to so-called "ultra high speed" and "super fast" broadband in the UK is long overdue. Not only has apparently been the norm for a long time in places as far flung as Corsica, but the fact is that even "average" or "walk paced" broadband would be a start for many in this country.

In fact, last time I did a broadband speed check at home, I registered the almighty speed of 90kbs. Oh yes. Dial-up speeds. And that's when I can even get my beloved Tiscali DSL connection to work.

However, while OFCOM CEO Ed Richards goes on the record as saying there are now "no regulatory in the way of investment in super-fast broadband", it's not really that easy, is it. For while the regulator may be waving the green light, or whatever the correct analogy is, the market needs to bite the bullet and make that investment.

BT's 21CN is of course, the first play to this end. And the growth of a wholesale market off the back of it will open up the market, are we seriously going to see the return of companies raising millions in capital to only then bury it under the street and hope that demand will be arrive before their money runs out.

At the end of the day, broadband access really is becoming a core utility. It's like your gas or electric ... a modern home can't operate 'off grid'. So while the government is busy pumping billions into saving the banks, maybe it's time they looked somewhere else to find the investment that will help pull the country out of recession and provide a launch pad for recovery.

Government investment in the Internet infrastructure of the country anyone?