“Capitalism without competition is not capitalism, it is exploitation.” These are the words spoken by the president Joe biden in July 2021, minutes before he signed an executive order to promote competition in the US economy. This is extremely relevant for telecommunications companies in the United States. In the United States, an industry that limits consumer choice is making it difficult for small Internet service providers to break through.
As CEO of the fiber infrastructure developer SiFi Networks, I can attest that both emerging and established ISPs stand to gain from a shared broadband model.
Indeed, without healthy competition in the economy, the big players could potentially change and charge what they want for services that do not meet the needs of the consumer. For many Americans, this means limited options in terms of providers and services. So how did we come to this?
Monopolies: a competitive advantage?
ISPs have always viewed it as a competitive advantage to own and operate their own broadband infrastructure. This makes it difficult for small businesses to break through, stifling competition and maximizing profits for established businesses. However, heavy investments in network infrastructure can be a double-edged sword – companies have so far ignored the costs of getting involved in long-term infrastructure projects and are now struggling to divest and invest. to adapt to a rapidly changing market.
This is why many American cities are still served by slow, outdated cable, and national fiber coverage is only 32 percent. But, at a time when the Internet is essential for education, healthcare, and business growth, consumer demands for high-speed connectivity make fiber optic the only viable option.
Currently, only the major telecom players can upgrade their cable networks. However, this is expensive, disruptive, and takes years, which means ISPs cannot expect a quick return on their investment.
A new broadband ecosystem is needed to give ISPs of all sizes the ability to meet consumer demands without necessarily overhauling their existing network infrastructure, an expensive and time-consuming option. This is where adopting open access broadband models can be effective and useful.
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Promote open access competition
Open access infrastructure essentially means sharing a fiber optic network. Many companies are reluctant to use this model because they believe that increased competition could negatively affect their profits. In fact, there are many advantages to using a shared network infrastructure. The first is that open access broadband gives ISPs access to more potential customers. Giving consumers more choice over their broadband plans and providers will attract a more diverse customer base and, therefore, drive overall revenue.
In an age where customer demand dictates the need to upgrade services and improve the speed and quality of connectivity, open access can also help ISPs of all sizes keep costs down. Network construction and maintenance is done by the infrastructure developer, freeing up budget for ISPs, who can redirect it to areas of the business that require special attention, such as strengthening customer relationships. The largest ISPs, who spend millions of dollars a year maintaining their network infrastructure, could use their savings to improve and diversify their product offerings.
Sharing an infrastructure will allow more ISPs to operate in the market, promote competition, lower prices and provide better choice for consumers. Citizens who previously felt cut off from basic education and health services because they could not afford their only broadband option, should then be able to look for more affordable plans. This will naturally encourage more residents and businesses to subscribe, creating a larger pool of potential customers and ultimately improving economic growth and social mobility.
Open access is also attractive to large ISPs. Currently, the telecommunications sector ranks last out of 46 industries for customer satisfaction on the U.S. Consumer Satisfaction Index. Therefore, if they did not need to budget for the operation and maintenance of their fiber and upgrade obsolete copper-based networks that no longer meet consumer demands, more money could be invested. in improving communication and customer service. If customers are happy with their ISP and a good brand reputation can be established, it will be a huge competitive advantage.
âFair competition is what has made America the richest and most innovative nation in history,â Biden said at his White House press conference. If small ISPs had a fair chance to enter the market, large, established players could remain competitive by improving their customer experience and tailoring their services to meet the needs of their customers. Ownership of network infrastructure is no longer the only or even the best way to compete in the high-speed Internet space. An open access model will diversify the market and allow a variety of ISPs to thrive.
Ben Bawtree-Jobson is CEO of SiFi Networks, who finances, builds and owns FiberCity networks. Internet service providers, 4G / 5G carriers and other service providers wishing to provide ubiquitous broadband services to commercial and residential properties in cities use FiberCity networks, which also provide connectivity for IoT applications at scale. from the city. This piece is exclusive to Broadband Breakfast.
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