Message from Milan

You know the Homer Simpson clip where he complains “Every time I learn how to set the remote, I forget how to drive the car”? That is exactly how I felt after three days of presentations at the FTTH Council Europe annual conference, which this year was held in Milan, the birthplace of fibre-to-the-home in Italy.

The Council really excelled itself this year with the speaker program, starting with Professor Carlota Perez, an expert on technological revolutions, and ending with Neelie Kroes, vice-president of the European Commission responsible for the Digital Agenda. In total, there were more than 80 presentations running in three parallel sessions over two days, plus an additional day of pre-conference workshops for the truly dedicated.

The conference has grown even larger, attracting more than 3,100 delegates from 80 countries, and keeping its crown as the largest FTTH conference in the world. It’s also a wonderful opportunity to meet both familiar and new faces: thanks Florence, Guy, Chris, Albert, Karin, Richard, Benoit, Costas, James, Martyn, Brian, and Lindsey, to name but a few.

For me these were the take-home messages from the event:

Europe needs to speed up on fibre: Europe is still the poor relation in the FTTH family, with just 3.9 million subscribers at the end of 2010, according to the latest update to the FTTH Ranking. This is hardly a new message from the Council, but this time they had heavyweight backing from Neelie Kroes, vice-president of the European Commission responsible for the Digital Agenda. “The current rate of new connections – now down to 25,000 a day – is simply not enough to meet our 2020 targets,” she said. To the delight of everyone in the room, she underlined just how important fibre is to the European Commission, warning that: “It not possible to maximise access while failing on fibre.”

Effective public policy on high-speed broadband is vital: Keynote speaker Carlota Perez is an economist, whose work focuses on the socio-economic impact of technological change in a historical context. It’s hard to do justice to her work in a short paragraph, but I’ll try. We are in the middle of the fifth major technological revolution, based on information and communications technology (ICT). Financial market instability and the struggle to adapt old business models to new technology are characteristic of the turning point of a technological revolution. When the market eventually moves past this stage, it enters a “golden age” of productivity and growth. But the shift to a more stable market does not happen without a push; as in the past, it will need sound public policy and regulation to shape and broaden markets. The best way to encourage the shift to a “golden age” of ICT, says Perez, is to make high-speed internet access as universal as electricity.

National regulators should play by the rules: The publication of the Recommendation on regulated access to NGA networks last year provided clear guidelines for national regulators to follow, but some regulators are ignoring core provisions in the Recommendation – and Commissioner Kroes is clearly unhappy about this. “These provisions strike a good balance between investment incentives and the need to protect competition,” she said. “It took long and intense discussions with stakeholders to agree on these principles. So in my view, everybody should now play by the rules.” Variations in local conditions are no excuse for the highly diverse national approaches to regulation, she added. “Europe does not need 27 approaches to NGA.”

The important question is not “why fibre?” but “how fibre?” Chris Holden, president of the FTTH Council Europe, highlighted this fundamental shift in perspective in his introductory message. The debate on “why fibre?” has largely been won. The big questions now are around the business models and financing to make this happen, given the high cost of digging to get fibre in the ground. For the first time at this conference, there was a session focused on investment models for FTTH. The European investment Bank explained how it is willing to bankroll well-thought-out business plans that help to meet European policy objectives (like the Digital Agenda). Another interesting presentation came from the fund manager of the Rabo Bouwfonds Communications Infrastructure Fund in the Netherlands, which is buying up cable TV networks, separating the ownership of the assets from the provision of services, and then upgrading the infrastructure with fibre. The aim of the fund is to secure long-term capital growth for its institutional investors, mainly pension funds.

Decisions made today about network topology will have long-term consequences: The workshop on European-funded technology research projects was an eye-opener. FTTH is heading off in two opposing directions, depending on whether you’re an established operator looking to economise on fibre use and consolidate central offices, or an alternative provider building an open access, point-to-point infrastructure where it makes sense to cut back on internet transit by keeping local services local. This session wasn’t very well attended – perhaps because technology isn’t considered a barrier to FTTH deployment – but it should have been, because these developments take the debate about point-to-point versus passive optical network (PON) to a whole new level.

Another highlight for me was seeing a little of the beautiful city of Milan. My taxi driver obviously thought that I looked good for another €10 and took me on the scenic route through the centre of the city. But thanks to him I saw the luminous duomo – otherwise Milan would have become yet another place that I’ve visited without actually seeing anything of it other than the inside of a conference centre.

These are just few of the high points of an event that also covered new services and applications (one room was set aside as a showcase with vendors demonstrating next-generation services like remote healthcare and home automation), case studies and success stories, technology and standards development and more. To appreciate everything that this conference has to offer, you had to be there (duh and all). Next year’s FTTH Conference will be held in Munich, Germany, on 29 February and 1 March 2012 – its got a tough act to follow.

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