Swisher’s quip would be shared by many others, who in a purely studied way would point out that, on a global basis, mobile already contributes more than half of all global service provider revenue. Sometime in 2012, mobile service revenues will range from 51 to 56 percent of total global service revenues, for example.
But there might be more to it than that. Ross Patterson, a commissioner of the New Zealand Commerce Commission, argues that “without government funding, fiber to the home networks would not have been built in Australia, New Zealand and Singapore.”
Those networks feature structural separation of wholesale network operations and retail service delivery, as well as open access to the wholesale infrastructure by third parties.
The direct implication is that the business model for ubiquitous fiber to the home is unattractive enough that public capital had to be pledged to create the infrastructure.
Granted, investment models and regulatory schemes vary around the world, but those choices in Southeast Asia and Australia point out the difficulty of the business model for large fiber to premises networks.
In the U.S. market, Verizon Communications, long the largest telecom firm to champion fiber to the home networks, has halted new builds, has sold rural exchanges and has inked deals with cable operators that suggest it no longer has complete confidence that the financial payback is there.
Other service providers, with more limited geographic areas to cover, or with some form of local government sponsorship or ownership, might not have different business models that could be workable.
But Swisher’s half-in-jest quip, and the decisions of regulators and industry participants in three nations, suggest that the business model for widespread and large fiber to home networks could be more uncertain now that mobility has clearly become the growth engine for global telecom, and as wireless broadband alternatives become more workable.
Regulators in much of Europe also now seem to be grappling with the riskiness of such investments. What to do is the issue.
In Germany, there are mandatory open access rules, but only in areas where there is no cable competition, and with no mandatory pricing rules, says Matthias Kurtz, president of the Federal Agency for Electricity, Gas, Telecommunications, Post and Railways.
That is not to say anything is inevitable. But neither is it true that the financial prospects for fixed network service providers are as predictable or certain as they used to be.
There seem also to be growing voices saying “I’m not saying broadband is a human right, but…” or that broadband is infrastructure “like roads or electricity,” says Swisher. That implies a view of what should be done that will have potentially unsettling results.