In response to Mark Seery's comments on my article The point of PON and on his own blog, I wanted to respond that I haven't tried to skew the debate one way or the other, just to raise an issue that seemed to me to be worth raising. So far, apart from a marginally lower deployment cost and a more complex unbundling process, I haven't seen many arguments in favour of PON. Yet I factually notice that many operators, particularly incumbents, seem to make that technological choice.
I'd be interested to hear other arguments in favour of PON, and it would certainly reassure me as to the decision making process of service providers in general and incumbents in particular. I realise that I may have been a little disingenuous in that I only compared PON and Homerun costs in urban areas where the cost difference is the lowest in all models I've examined so far. In semi-ruban or rural areas the cost difference increases significantly. However, since I have very serious doubts on the willingness of any private service provider to go and pop rural areas...
I'm also aware that a decade ago the cost difference was much higher, fiber being way more expensive than it is now. Still, there are incumbents choosing PON now, so surely this historic reason should no longer weigh in on the decisions.
If I understand Mark's circular argument argument correctly, he asserts that I analyse the PON vs Homerun choice of incumbents as motivated by fear of LLU because I myself support LLU (which he calls theft). I don't particularly support LLU when it comes to fiber. Again, based on what I've seen here in France, the only operators making any money on broadband are the incumbent and those who unbundled. So I'm tempted to suppose that unbundling of the incumbent's copper network was a necessary evil to level the playing field.
Do I think government enforced unbundling is necessary for FTTH? I don't actually. I think some kind of regulation will be necessary if the customer is to have a choice of providers (there are already echoes here in Paris of several buildings refusing any form of adduction because they don't want three different operators to dig successively and thus will only let in an operator if he guarantees that others will be able to provide the service on the one fiber connection). I also think that - considering the deployment costs involved - it's in the interest of all operators to maximise network usage and thus resell to their competitors if they can't sell to the customer themselves. This is actually something I'm going to post about tomorrow.
In other words, I don't think FTTH competition will happen on the physical layer without regulation. But regulation does not have to be unbundling, and it doesn't have to be aimed at the incumbent only. Why not offer geographical concessions and regulate resell prices, for example? In fact, with geographical concessions, maybe regulating resell prices wouldn't even be necessary, provided the concessions were attributed fairly. That's still a form of government inteference, but it's not LLU. But even non-regulated resell require that the technology can easily allow the use of one home's connection by a competitor, which PON doesn't seem to do very well without significant extra investment.
Anyway, back to the topic at hand: I'm not a porponent of LLU. I'm curious as to the future of fiber deployments, and I'm wondering how a fair competition is possible under PON. Furthermore, as Gordon Cook pointed out, there are interrogations as to the scalability of PON in terms of available bandwidth. If a PON investment needs to be scrapped and rebuilt otherwise in ten years time, wouldn't that look retrospectively like a bad choice of technology?
