Muni network ownership and the Fourth

Jean-Francois Mezei jfmezei_nanog at
Wed Jan 30 21:36:46 UTC 2013

On 13-01-30 15:49, Owen DeLong wrote:

> 1.	They are not allowed to sell L3+ services.
> 2.	They are not allowed to own any portion of any L3+ service provider.
> 3.	They must sell their L1/L2 services to any L3+ service provider on
> 	equal terms.

This is the problem we have in Canada. Despite the CRTC mandating that
incumbents must wholesale their last mile, the incumbents are always in
a conflict of interest because they also run their own retail service
which competes against wholesale ISPs. And the incumbent's own retail
service do not purchase last mile access at the regulated rates set by
the CRTC.

So functional separation is a clear requirement to ensure that the
provider of the last mile as no vested interest in giving preferential
treatment to one retailer over another.

Another aspect which is important: when you wish to foster a competitive
environment, you have market controlling incumbents and small startup ISPs.

Small startup ISPs cannot afford to deploy fibre to whole neighbourhood
when they will only have a couple of subscribers there. Having shared
infrastructure is key to allowing small competitive ISPs to start and grow.

While Australia resisted giving NBN the ability to aggregate traffic
centrally (so that one ISP could get one connection to NBN and serve the
nation), Canada moved in a different direction, increasing aggregation
so that small ISPs can compete in a greater footprint so that even
smaller towns can get competitive services. (Rogers cable is the last
problem/sore point of this policy set in 2010 and confirmed/implemented
in late 2011 - However, the aggregation is still within an incumbent's
own fooot print. So you need links to Bell for most fo Québec and
Ontario, links to Telus for Alberta-British Columbia, Rogers to reach
cable custoemrs in Ontario, Vidéotron for Québec, Shaw for BC/ALTA etc).

So while the Aussie NBN has many points of interconnect, they will
connect to every home in that area, whereas in Canada, ISPs have cable
and telco connections which are separate.

In the Australian model, if you want to serve 5 customers in a small
town, you need to setup a gigE link to the MMR in that small town. So it
is much harder for smaller ISPs to cost justify expansion because break
even point is far down the road once you have enough customers to
justify the links to that town.

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