Idiosyncratic, says Telstra. Over-thought and unworkable, opined the CEO of one Asia service provider. Quite stupid, said a technical expert with a major vendor in the FTTH field.
They were all talking about Singapore’s newly announced NGN policy which will offer up to S$750m of government subsidies in return for a 100Mbps+ access network that must be structurally separated between the passive infrastructure operator (the ducts and the fibre) and the active infrastructure operator (the electronic bits such as switching and transmission).
The latter operator would then be obliged to provide services on an operationally separated basis to all retail service providers.
Such triplicate separation has never been undertaken anywhere in the world and with good reason say several CommsDay technical sources, currently speaking off the record in case their companies fall out of Singapore Inc’s good books. Why? You can’t design a genuinely efficient and effective broadband network in a physical sense without knowledge of what you want to do with it in an electronic sense.
Says one, such a separation could potentially work if you provide a genuine one-to-one fibre pair connection from the exchange to every premises in Singapore—nice in theory but in practice probably too expensive. Indeed, it is far from certain that this is what Singapore’s policy makers have in mind: they talk of differentiated speeds (100Mbps down, 50Mbps up). From a cost efficiency point of view, a shared passive optical infrastructure seems best at delivering these criteria.
And at least one of the pre-qualified bidders—StarHub/Vyyo—doesn’t plan a normal FTTH/N topology but, instead, a souped-up HFC infrastructure using cutting-edge standards and spectrum management techniques. The electronics are fundamental, not separate, to such a network design.
But the Singapore structural separation requirement quite explicitly calls for “netco” and “opco” to be fully separate entities with completely autonomous decision-making considerations.
Any level of cross-shareholdings will be considered as a black mark, apparently.What’s more Singapore is tendering to select its Netco in a completely separate process to selecting Opco—some six months apart. All the talk at the RFP launch was of a singular Opco winner when that is awarded in 2009, but revealingly, one slide in the IDA presentation referred to Opco as wholesale operator(s) - the singular or the plural.
If the Singapore government is keeping its mind open on how many companies may be allowed to operate switches and transmission, surely this too should be made explicit in the Netco RFP requirement?
Even with one Opco, co-ordinating the physical characteristics of the network with its electronic requirements to achieve an end product that meets the government’s goals would seem to be more difficult under the proposed structure.
LACK OF LOGIC: Other aspects of the RFP seem to defy logic. Some 15% of the weighting to the process for evaluating the NetCo RFP will be allocated to the “attractiveness of interconnection offer” comprised of “basic product offering and terms & conditions” and “adaptability of service offerings.” This might be a reasonable request for OpCo but not for a NetCo which will be nothing more than a glorified provider of dark fibre. What “service offerings” can such a provider be adaptable about?
Publicly, all the stakeholders were making all the right noises about looking at the RFP and being keen to participate. But the stock market provided a cue, with the share prices of both SingTel and StarHub falling yesterday. And privately, observers were scathing.
Said one, with a FTTx vendor, “How the hell are they going to do that separation? This is the problem with these things... the pencil pushers changing the boundaries all the time. In NGNs it all fits together ... how is this all going to interact with different players and software?”
“We know it can be done, we know how to do it best, by muddling on and changing the boundaries the actual deliverability of such a project is becoming less and less.”
Another source, the CEO of an Asia-centric service provider said, “someone’s over-thought this and put in policy that’s not workable. It sounds like someone thinks that it creates more competition but doesn’t really understand the business. This separation will add friction.”
Certainly the Singapore government can’t be accused of making this decision in a bubble—it has apparently spent the last several months conducting a “competitive dialogue” with the various carriers, vendors and financiers who have pre-qualified to participate in the tender.But at the same time, the new policy seems quite worryingly experimental at this stage.
While most Singapore regulatory decisions in the telecom sector undergo an Australian/Hong Kong-style public review and consultation stage, this one has not. It was announced Tuesday night at a press conference with little more detail than a speech and a powerpoint presentation. Policy by powerpoint is not always the best way forward! Especially when one of your stated policy goals is vibrancy!
by Grahame Lynch