& cplSiteName &

Amsterdam Fires Up Muni Broadband

Ray Le Maistre
1/5/2006
50%
50%

Amsterdam's City Council has unanimously backed the first phase of the planned citywide fiber-to-the-home (FTTH) buildout project, CityNet , that will initially connect 40,000 homes in the Dutch capital. (See Amsterdam Commits to FTTH.)

All 45 members of the Council backed the scheme, the €30 million (US$36.3 million) initial phase of which is being backed by funds from the City of Amsterdam, five housing corporations, and ING Group .

The next step, according to CityNet spokesman Dirk van der Woude, is for the shareholders to formulate a binding agreement, which will then be presented to the European Commission.

While those bureaucratic processes are going on, wholesale carrier bbned and its main vendor partner, Cisco Systems Inc. (Nasdaq: CSCO), will test and trial the active Ethernet technology that will deliver services to the Dutch households. (See Amsterdam Gets Active With FTTH.)

Should the initial phase be successful, the CityNet project could be expanded to the whole of the Dutch capital's 420,000 homes and businesses.

Daiwa Securities SMBC Europe Ltd. analyst James Enck reckons the unanimous vote is a "complete knock-out blow [on behalf of] municipal networks." In his European telecom blog, Enck crows that the vote is the "perfect start for 2006 for those who wish to see more robust connectivity for all!"

Enck also refers to another FTTH trial in the Netherlands, in the small town of Nuenen. There, 7,500 homes have been connected since March 2005, with the 15,000 residents getting speeds up to 100 Mbit/s.

The Daiwa analyst notes that the residents had until the end of December for users to commit to subscribing to the service, with 80 percent choosing to stick with the FTTH scheme, "despite a lot of targeted marketing from both KPN Telecom NV (NYSE: KPN) and [cable operator] United Pan-Europe Communications NV (UPC) (Nasdaq: UPCOY), the latter of which also cut triple play pricing in the local market to respond to the fiber threat."

Such a response will no doubt encourage CityNet and other European municipal network hopefuls, while Enck believes this is the tip of the competitive iceberg that will cause grief to incumbent KPN in the Netherlands and to other national carriers that face the threat of such high-speed, low-cost, open-access municipal projects that are being encouraged by bodies such as the Fiber-to-the-Home (FTTH) Council . (See FTTH Council Applauds Amsterdam.)

— Ray Le Maistre, International News Editor, Light Reading

(5)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
materialgirl
50%
50%
materialgirl,
User Rank: Light Beer
12/5/2012 | 4:10:11 AM
re: Amsterdam Fires Up Muni Broadband
It will either spur them to drop prices, or drop out of the markets. We need to really decide whether we want commercial networks or muni networks. This grey zone is not going to work.
digits
50%
50%
digits,
User Rank: Light Beer
12/5/2012 | 4:10:11 AM
re: Amsterdam Fires Up Muni Broadband
Could the development of such municipal networks spur on incumbents to be take a greater risk with their own FTTH deployments?
mrbhagav
50%
50%
mrbhagav,
User Rank: Light Beer
12/5/2012 | 4:10:10 AM
re: Amsterdam Fires Up Muni Broadband
"Could the development of such municipal networks spur on incumbents to be take a greater risk with their own FTTH deployments?"

First, they will try to stop the municipal builds based on "level playing field" arguments, infeasibility of the project, financing risk for the municipality, tax burdens on the citizens, blah blah blah.

Second, they will delay the provision of pole space if they own the poles and the build is aerial.

Third, they will engage in predatory pricing to price the muni network operator out of the market.

Fourth, they will build out themselves to some extent to compete more effectively.

Anyone knows what is going on with Verizon's petition to obtain state-wide video franchises in relation to its FTTH buildout and triple-play?

ragho
50%
50%
ragho,
User Rank: Light Beer
12/5/2012 | 4:10:09 AM
re: Amsterdam Fires Up Muni Broadband

My opinion is that it all comes down to financing. IMHO, the US market is ill-suited to a long term capital investment for FTTX rollouts by incumbents, except in a few areas.

At least a non-trivial amount of underwriting needs to be done by local/state governments to finance these, especially in metro areas.

But then again, the regulatory field in this space is fairly wide open. Who knows in a few years that FTTX channels may be required by governments to be equitably accessible to other competing carriers.

Waiting with baited breath on a new telecom act :-)

-ragho
jayja
50%
50%
jayja,
User Rank: Light Sabre
12/5/2012 | 4:10:07 AM
re: Amsterdam Fires Up Muni Broadband
"Could the development of such municipal networks spur on incumbents to be take a greater risk with their own FTTH deployments?"

It will spur them to hire more lobbyists and bribe more legislators and congressmen to keep municipalities from builindg these networks.
Featured Video
Flash Poll
Upcoming Live Events
March 12-14, 2019, Denver, Colorado
April 2, 2019, New York, New York
April 8, 2019, Las Vegas, Nevada
May 6, 2019, Denver, Colorado
May 6-8, 2019, Denver, Colorado
May 21, 2019, Nice, France
September 17-19, 2019, Dallas, Texas
October 1, 2019, New Orleans, Louisiana
December 5-3, 2019, Viena, Austria
All Upcoming Live Events