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FEATURE CABLE NETWORKS


manner, elevating them to a position where they can offer an equivalent basket of services as a traditional telco. Second, cable operators are also building out


their networks with optical fibre. Market data provider IHS predicts that global hybrid fibre-coaxial optical node shipments will more than double in the run-up to 2019. Cable operators upgrading their networks with optical fibre cable are driving the growth, IHS says. Tis means that the enabling infrastructure they use to deliver their services is not radically different from that used by telecoms operators. Meanwhile cable network operators – whose


infrastructures (in the UK and elsewhere) were rolled out mostly using commercial investment, and who still rely on private funding for future expansio – have enjoyed relative immunity from requirements for them to open up their assets to third-party service providers in the interests of competition and the public good. But will that immunity hold in the post-liberalised telecom world, where state-sponsored initiatives now strive to make broadband ubiquitous? ‘Traditionally, cable coverage expanded only to


urban and – marginally – to suburban areas, while copper networks [were leſt to target] rural and remote areas,’ said Dr. Nikolaos Korfiatis, senior lecturer in business analytics, Centre for Competition Policy, University of East Anglia. ‘Both [territories] carry the same rules in terms of


MARKET VIEW: UK


When five years ago Ofcom ruled that BT should, in the interests of openness, make its duct infrastructure and telegraph poles available to other network operators, BT retorted that if this same spirit was to be applied fairly, Virgin Media’s infrastructure should be subject to the same requirement. At the time, Ofcom disagreed, and said the policy variance was due to the fact that Virgin Media did not have ‘significant market power’. Up until last year’s


announcement of its £3 billion Project Lightning programme of network investment, Virgin Media had shied away from expanding its network. The Project Lightning announcement won Virgin Media a prime ministerial pat-on-the-back. But the harmony between government and Virgin Media was relatively


short lived and, before the end of 2015, Virgin consolidated its UK market stance with two rather uncharacteristic moves. First, Virgin Media publicly


cautioned regulators and the government over compelling its rival BT to divest Openreach, with the assertion that such a move would deter investment in broadband improvements. ‘It does not send a good message to any investor if the state is to consider taking the network property of a business,’ Virgin Media chief executive Tom Mockridge said in a speech at Broadband World Forum last October. Mockridge took the


opportunity to comment on two other competition issues. He called upon the government to cease subsidies for rural superfast broadband roll-out, claiming this makes it more difficult for rival infrastructure


owners to invest: ‘This is an area where letting the markets compete would be positive for the whole economy, having competing networks without the need for the government to subsidise one.’ Virgin Media’s next move,


last September, involved it with a small cadre of network infrastructure builders who felt a united front was timely; along with CityFibre, euNetworks, and Zayo, it announced the creation of the Infrastructure Investors Group (IIG), an industry group that is pro-competition and pro- investment, with the slogan ‘Infrastructure competition is alive and well in the UK’. At its launch the IIG pledged to ‘work to ensure that the benefits of a pro-investment environment are fully recognised by policy makers and industry stakeholders.


market provision... Cable network providers and telecoms fall under the same regulatory oversight – the mode of delivery should not have difference in the regulatory oversight. Should the highway code be different depending on the car you drive?’ Advocacy in favour of the opening of cable


networks for broadband provisioning may, naturally enough, be informed by more commercial agendas, when broadband retailers stake claims for a slice of the cable broadband pie; but the cable incumbents would have it that the rules of the telecoms unbundling cannot be applied to their operating model on a like-for-like basis.


Cable is different... isn’t it? In understanding the factors informing telecom and cable operators’ general stance toward regulation, it is always instructive to remember that neither delivery model was originally designed for high-speed internet access; as Julie Kunstler, principal analyst, component & intelligent networks practice at Ovum, explained: ‘Historically, the role of cable operators was TV. Cable operator franchises were heavily regulated by governmental agencies to ensure that cable TV reached both urban and rural populations. It was only later – much later – that cable began to offer data and voice services.’ Tis fundamental differentiating factor makes less of a difference today. ‘While there is a


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considerable argument [on whether coaxial- based] cable should be seen as an alternative to copper, there is no substantial argumentation that those two delivery channels are competing for the same share of the pie,’ added Dr Nikolaos Korfiatis at the Centre for Competition Policy. Te last decade’s advances using ever-higher


frequency transmission have enabled both copper and cable to achieve much greater speeds, Korfiatis added; however, as speed-led sales-and-marketing has clouded the issue over the last few years, the question of whether all-copper and copper/fibre networks can be pushed ever further in terms of capacity has been the subject of much debate. Suggestions that the technological limits of


copper networks might result in opportunities for cable to exploit are speculative, commented Benoît Felten, CEO and chief research officer of Diffraction Analysis. ‘To be honest, I’m not sure it will make a difference...’ he said. In his view, the cable sector has not positioned itself as a direct competitor to copper alternatives, because it prefers to avoid like-for-like comparisons. ‘Cable sees itself as a potential monopoly, and


like all potential monopolies [it] thinks opening- up is bad [for it] – even if [that position is] proven otherwise by economics,’ Felten explained. ‘So I don’t expect cable to embrace openness – and [neither do I] expect cable regulation to change significantly.’


Regulation revisited ‘Regulation is still national, which means that significant market positions are not examined locally,’ said Benoît Felten at Diffraction Analysis. ‘As long as that remains the case, the regulatory tools are not well aligned to force the opening of cable, except in countries where cable is near ubiquitous – such as the Netherlands and Belgium... In these countries some attempts have been made.’ In 2013, Belgian regulators finalised their


decision to impose on the cable operators Brutélé-Tecteo (under the Voo brand), Coditel (now Numericable) and Telenet a requirement to open up their networks to third-party operators wishing to provide customers with television services – rather than broadband alone – on the grounds that multi-play bundles are of increasing importance to consumers. Liberty Global-owned Telenet appealed the decision in Brussels, unsuccessfully; a result that could set a precedent for the rest of Europe. Controversy over open cable is also breaking


out in the Netherlands. Although there are a number of smaller cable broadband providers, the sector is dominated by Liberty Global-owned Ziggo Group, incorporating UPC and Ziggo,


32 FIBRE SYSTEMS Issue 11 • Spring 2016


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