It would seem that few stories coming out of Brussels get hearts racing outside of Europe’s capital. However, the European institutions are working on legislation1 that is likely to see players in the broadband market racing to hike investments in Next Generation Fibre Access networks. With the roll-out of NGA networks widely considered to be beneficial to both society and the economy, there is pressure for operators to deploy these networks as quickly as possible. The idea that broadband providers are being pushed by legislators to invest in competing infrastructures is likely to be music to the cable industry’s ears given last year’s average 22% capital expenditure figures.
As both NGA infrastructure suppliers and investors, cable operators have long been and continue to be boisterous supporters of infrastructure competition, a source of competitive pressure that will result in increased product innovation as well as downward pressure where pricing is concerned – the sorts of things that consumers notice. The deployment of high-speed broadband access infrastructure is a key condition for the development of a knowledge-based economy. ICT investment is an economic engine and increases productivity across other sectors, too. Properly executed, the commission’s legislative effort could end up having a massive and positive effect for both the consumer and Europe’s continued push for large scale broadband rollout.

Read the fine print

The importance of infrastructure-based competition appears to be recognised by European decision makers. However, recommendations made by the EU will only be beneficial to fibre investment if they guide national regulators toward a model of competition where alternative providers are given the real incentives to invest in their own networks. Getting the fine print right in this area is key to ensuring that such large scale plans actually deliver. Bringing competitive prices to consumers for broadband services is where the cable industry can take the initiative. Here the widespread rollout of Data Over Cable Service Interface Specification (or DOCSIS) is driving a downward trend in prices.

Industry buzzword or household name?

DOCSIS 3.0 is the latest evolution of a cable based technology standard that enables ultra-high-speed broadband. What DOCSIS 3.0 does is to address bandwidth and speed limitations with new features and greater efficiency. As it is playing a decisive role in driving innovation at surprising cost efficiency for consumers, it is little wonder that industry analysts are intrigued. DOCSIS 3.0 is the latest in a long line of technology upgrades and major CAPEX investments from cable over the past two decades. Upgrades from unidirectional networks for analog TV to bi-directional networks bring broadband, voice services as well as digital TV. Cable has also been making big investments to bring fibre closer to the consumer. The average consumer will experience a noticeable bump up in the speed of their system, contributing to the emergence of DOCSIS 3.0 as a household name. Industry buzzword or household name, DOCSIS 3.0 is rolling out across Europe — now.

Under Pressure

Incumbent operators in markets with a well developed cable operator will likely be the players under pressure to step up investments to match the speed and performance of DOCSIS 3.0. Analysts point to the emerging competitive scenario where European cable operators will be offering download speeds of up to 200MBps. Most incumbent telco networks struggle to offer more than 20-40 Mbps using existing DSL based technologies.
DOSCIS 3.0 has been portrayed by analysts as the “biggest threat” to incumbent telecom providers. Cable leapfrogs telcos’ VDSL offerings using DOCSIS 3.0’s speed advantage. EU and national decision makers will be encouraged to see the deployment of DOCSIS 3.0 as a healthy building block to real network based infrastructure competition, a win-win situation
for the consumer.

Leap frog to the end

The cable industry is able to exploit a window of opportunity in the infrastructure race which might surprise some who could expect the bigger incumbents to invest faster. One cable industry player once said that investing in making networks faster with DOCSIS would be easy and only require a “couple of billion… an amount you could find leftover in Bill Gates’
couch.” Cable is poised to invest and deploy its faster networks more quickly than some of its competitors. And as the battle for the living room progresses, cable has every reason to be confident that the telecom operators will be working hard to catch up with fibre deployment. Competition may be a bitter pill for some to swallow but if the effect is democratic, it will result in the sort of investment climate that will keep the consumer on top for the foreseeable future.