More competitive markets could be at FTTH disadvantage, conference hears

TORONTO — Trying to build fibre-to-the-home (FTTH) in very competitive markets makes little economic sense for Internet service providers (ISPs), meaning markets with more competition could actually be slower to get the newer technology, a conference heard Tuesday. The panel of four experts — speaking on the second day of the ISP Summit at the Hilton hotel in Toronto — was discussing the challenges and opportunities presented by building the “last mile” to the customer. When it comes to building fibre out to that last mile, having an “over-served” market with too many ISPs puts that area at a disadvantage, one panelist said. “We almost find that to be a detriment to the community in some ways,” Ysni Semsedini, CEO of electrical distributing company Festival Hydro Inc. and of ISP Rhyzome Networks, said. “What you find is … where you don’t have much competition, fibre-to-the-home can make sense,” he said, adding companies can get higher penetration and greater investment payback in such markets. He gave the example of Stratford, Ont., with a half-dozen ISPs, none of which has more than, he guessed, 20 or 30 per cent of the market. “How do you do a play that will get you fibre-to-the-home in such a competitive community?” he asked. “That’s the challenge we’re going to see going forward, is that some part of the province are going to develop well…and you’ve got over-competitive places where’s it’s falling back behind because no one wants to put up $40 million for 20 per cent of the customers,” Semsedini said. Another panelist agreed. Ian Stevens, president and CEO of Execulink Telecom, said “you can do fairly well in fibre-to-the-home (FTTH)” in a small community without a strong cable operator or where the incumbent telco isn’t well-regarded. The discussion about over-served markets opened up the wider issue of how governments would be able to target their broadband funding programs, including SouthWest Integrated Fibre Technology (Swift) and Connecting Canadians, with some arguing that the government should be careful with “duplicating” networks. Duplication is when two or more players can provide the same capability (FTTH, for example) to a household or business, according to Stevens. Mitch Thomson, executive director of the Olds Institute for Community and Regional development, an Alberta-based non-profit dedicated to community economic development, said that potential exists “in any community where we’re worried about over-services because we’re completely rebuilding network, upon network, upon network, instead of using our synergies to create cost effectiveness to provide better service.” Stevens added that while the government should be careful with the potential of duplicating networks, “there are some networks out there that just need a lot of investment, and if private enterprise wants to help make that happen, maybe that’s not a bad thing.” “But I think it should be focused on folks that are probably never going to get investment by private enterprise,” he said. “We want to get the money to the areas that ‘have-not’ as opposed to rebuild a second network on the area that has,” Stevens said in an interview after the panel. — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

More competitive markets could be at FTTH disadvantage, conference hears

News | November 8, 2016

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More competitive markets could be at FTTH disadvantage, conference hears

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