Techno-economic Evaluation of Open Access on FTTH Networks

Abstract

The deployment of a new fiber-to-the-home (FTTH) network will open up a much higher bandwidth to the customers compared to currently deployed copper-based solutions, but its rollout costs are immense. Opening the network and sharing the same infrastructure and its costs with multiple actors offers important cost saving opportunities. A so-called open access network can provide interfaces for access at different network layers: dark fiber, wavelength, or bitstream. Although open access allows for a better usage of the shared infrastructure and as such for a better payback of the cost, open access does not come for free. The cooperation of actors and the interfaces at the open access network layers require extra equipment, processes, and transactions, leading to additional costs. This paper describes the different types of open access, and quantifies the additional cost for installing and operating an open access network: connecting a new alternative operator, connecting a new end-user, and the impact of churning. The models and calculations show that the cost of providing an open access network is low compared to the investment cost for infrastructure or architecture competition, but is not negligible and it can have a significant impact on the cost for connecting new providers and end users. The cost for connecting a new provider entails significant equipment and process costs, especially for fiber open access, whereas the procedure for a new or churning end user is dominated by transaction costs. The costs can be reduced by automation, standardization and sharing of transport of technicians among end users.