Intelligent Ways to Solve the Middle Mile Problem

Now you might say that I've picked this title driven by pure chauvinism, but I assure you, it's nothing of the sort. I just think that – once in a while – when your country adopts a sensible and measurably effective policy, it's good to acknowledge it. The reason I went down this trail of thought again is the excellent article published by Optical Reflection on Gabrielle Gauthey and her views on how the French policy makers solved the middle mile problem (Public Money and Broadband in France).

I'll let you read the whole thing, it's well worth it, but in a nutshell here it is: unbundling in France didn't pick up outside of dense urban areas until local governments were allowed to invest in backhaul fiber networks. What they did was connect of of the incumbents local exchanges and sold the backhaul dark fiber at reasonable prices to the altnets who then promptly went and unbundled all of these exchanges. This in turn drove competition and led to better prices for consumers.

In other words, a virtuous circle.

Could this same model be applicable to FTTH deployment? In rural areas, I certainly think so. Rural fiber deployment is expensive and needs to be paid back over longer periods of time, but it's economically feasible. What might make or break it though is the availability of decent priced backhaul. And very often, Rural backhaul is a monopoly, and we all know how monopoly prices are set. When in addition, the owner of the backhaul is a copper competitor on the access, the incentive is pretty clear to gouge you on backhaul prices.

So yes, I think in this instance the French example is a good example. But don't worry, I'll make sure to be hugely critical of the soon to be announced plan for Tier 2 fiber deployment in France which – according to rumours – will be strikingly backwards and not at all a good example…