broadband strategies handbook.pdf - Khazar University

In Europe, for example, where the incumbent operator historically dominatedboth the local loop and the backbone markets, the priority for regulatorswas to provide access to these operators’ networks for companiesentering the markets, since this was seen as crucial to the development ofcompeti tion. Subsequently, as competition has grown, regulators havedeveloped systems for determining which operators should be regulatedand how, and these systems are based on a well-established framework ofgeneral competition regulation. In developing countries (for example, mostcountries in Sub-Saharan Africa), such frameworks often do not exist. Regulatorstherefore need to develop alternative sets of guidelines to governhow access to the infrastructure of private operators in competitive marketsis regulated. This involves a trade-off between support ing the developmentof competition in the downstream market and maintaining the incentives toinvest in upstream infrastructure. In areas of a country where public supportis provided for backbone infrastructure, this trade-off is relativelystraightforward, since one of the conditions of public support typicallyincludes the provision of wholesale services on regulated terms. In otherareas of the country and in other parts of the infrastructure, the trade-offmay be more difficult to determine.Infrastructure SharingMany governments have sought to encourage deployment of networks andimprove the overall competitive situation by allowing or, in more limitedinstances, even requiring infrastructure sharing. In most cases, infrastructuresharing has been instituted in areas where having competing physicalinfrastructures was not considered economically viable (such as in rural orremote areas) or where the construction of competing infrastructures couldprove unacceptable for social or political reasons (too much disruption fromrepeated construction projects). By sharing network infrastructure, buildersof networks can significantly reduce costs and make investment in themmore commercially viable. This is particularly relevant for fiber optic networksin rural areas, where the revenues generated by such networks arelow. In some cases, operators have a commercial incen tive to enter intothese sharing arrangements. For example, in Nigeria, where there has beenextensive fiber optic cable network rollout, operators have entered into avariety of network-sharing agreements aimed at reducing costs and improvingthe quality of supply. In addition, operators may also be required toinstall multiple fibers in their cables, even if they only need one. These additional“dark” (unused) fibers may not be used initially, but may be held inreserve for future use by an existing operator or new entrant. This may be avery cost-efficient way to manage fiber optic networks because installationPolicy Approaches to Promoting Broadband Development 57