Broadband in France and Japan

[David Farber <dave () farber net>]

Begin forwarded message:

From: John Conor Ryan <john () joeinc tv>
Date: March 30, 2006 2:22:55 AM EST
To: dave () farber net
Subject: Re: Broadband in France

Dave:
I struggle with the right term to describe the regulatory construct that
enables low-cost, unbundled broadband. I agree with Robert Shaw of  
the ITU,
writing the note "Broadband in France", that 'deregulation' is not  
apposite.

In Japan, as we surely all know, broadband has exceptionally high take
rates. Originally, NTT was quite slow in marketing DSL. Only  
unbundling, and
aggressive tactics by Yahoo!-Softbank-Broadband (here: Y!S) succeeded in
opening up the market. Today, Y!S has enormous market penetration.
Fiber-to-the-home will perhaps overtake DSL as the dominant form of
broadband physical medium this year. High speeds to homes and  
businesses.
Consumers benefit. Japan is held up as a paragon.

Behind the scenes: curious business models.
1. Where NTT deploys fiber to the home it also must unbundle it - at a
government-set rate of (as I recall) Y1800/month (Eu13, USD15). I cannot
imagine a positive ROI for this absent a separate program of national
subsidies, tax incentives, etc.
2. Y!S operates nearly entirely on unbundled local loops. Its  
financials are
quite impenetrable, but the firm, now at scale (no longer in startup,
customer-acquisition mode) continues to hemorrhage cash.
The peculiar outcome seems to be that a/ NTT loses on the wholesale
unbundled loop and b/ Y!S loses on the retail package.

At first glance, the construct now operating in France seems similar.  
FT is
forced to unbundle at low wholesale prices. Perhaps there is some
behind-the-scenes machination to make FT whole on this, else it looks  
like
extortion.

A semantic question: is liberalization the right expression for brute- 
force
market intervention?
A policy question: when is brute-force market intervention the right  
policy
to accelerate broadband deployment?

Thanks,

John Ryan

-----Original Message-----




-------------------------------------
You are subscribed as lists-ip () insecure org
To manage your subscription, go to
 http://v2.listbox.com/member/?listname=ip

Archives at: http://www.interesting-people.org/archives/interesting-people/