Redefining the 'last mile' with UFB initiative

Will faster broadband networks shift the bottleneck from the last mile to the last ten inches?

The government's ultra fast broadband network has been designed to avoid vertical integration, so the company that owns the infrastructure has no commercial interest in any of the companies that are providing the services that are run across it.

This is designed to avoid from the outset the kind of market distortion that has occurred in the legacy copper world with incumbent telcos charging a premium to deliver services across what is commonly referred to as "the last mile" - that is the distance from the exchange to the home or office.

In the new fibre world, it is the government's intention to create an open access network where all retail providers pay the same to access the network. So that ISPs, and those that create retail services, compete on price and innovation.

While this might sound like a new nirvana for end-users, the Telecommunications Commissioner Ross Patterson says it is one that they might not necessarily want, or even be aware of. At the Telecommunications and ICT Summit in Auckland Patterson raised the spectre of a new bottleneck in broadband delivery occurring, this time around access to premium content.

"The bottleneck shifts from the last mile to the last ten inches," he says. "A greater focus is required on the demand side and these issues need to be addressed at the same time that the networks have been built."

He pointed to Singapore as an example of a country that is rolling out a government-backed fibre network but has found user uptake surprisingly low - around 30% even when the fibre connection was offered free. "[The result] of its open access model was to move the bottleneck of content exclusivity to the set top box, to electronic programming."

In other words, one of the drivers for broadband TV will be IPTV. But will the average New Zealand household want to pay for a fibre connection which enables them to to stream video onto a big screen plasma TV in their living room, if they can't watch an All Black match live?

At the end of his presentation ComputerWorld asked Patterson if the Commission would look to regulating SKY TV, which owns most of the premium sports programmes in New Zealand. But he replied that the decision to regulate was one for policy makers, not the Commission. "All we're really doing is raising that internationally it is recognised and has been addressed in other jurisdictions in that way."

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