Why fibre and wireless complement more than compete with each other

There is a general consensus among regulators and industry experts who believe that facilities-based competition is the best way to enable new telecom services and applications. But one of the great myths about wireless technology is that it can compete equally against fibre in terms of facilities-based competition. Wireless technologies will undoubtedly play a significant role in the last mile and in mobile applications. But the bandwidth of wireless technologies over longer distances is extremely limited compared with fibre. For example the intrinsic capacity of a single fibre strand is greater than all the bandwidth combined on existing satellite or wireless systems in Canada. Once fibre is installed into a neighbourhood or business, wireless or satellite systems cannot compete in terms of bandwidth. More significantly, on a 20-year amortization the cost of fibre can be significantly less than most wireless systems. However, last mile wireless systems are a prefect match for municipal condominium fibre systems that extend open access fibre to schools and other public systems. Municipalities and governments that contract with the private sector to build condominium fibre to public sector buildings can rapidly enable the delivery of extreme high speed wireless services to the rest of the neighbourhood around a public sector building. The typical school in North America serves on average between 250 and 500 homes. This is the ideal service delivery area for low-power, high-bandwidth wireless systems. There are a number of small innovative companies that are developing LAN-based wireless RF and optical solutions. These technologies can deliver up to 50 Mbps per home using very simple low cost components based on the 802.11 Ethernet LAN standard. In most cases their operating range of these systems is only a few hundred meters. Open access fibre to the neighbourhood is essential for these technologies to be successful. One of the challenges facing government when looking at condominium fiber and other network solutions is disruption to the existing marketplace. As much as possible governments should not intrude into the marketplace. The light hand of regulation is much better than heavy market intervention. However, from time to time governments are faced with significant challenges where intrusion in the market will produce significantly greater benefits to the economy and society that "to do nothing would be to do harm" For example building a bridge to Prince Edward Island disrupted the operations of the private sector ferry operators. Should the government not have built the bridge because it would disrupt the workings of probably a very efficient and competitive ferry operation service? Or does government have a role in looking at the overall economic and social benefits and deciding that based on that criteria that a bridge makes sense, even though it means putting the private sector ferry operators out of business? The same argument applies to free trade. Everybody agrees that free trade is a good thing except when it directly impacts your own industry. But governments have a responsibility at looking at the overall social and economic benefits even though there may be some disruption to some parts of the economy. We are now confronting the same issues with governments intruding into the telecom marketplace. As with free trade we instinctively know that competition is a good thing. Therefore should governments intrude into the marketplace to actively promote facilities-based competition? There is no question such a disruption will impact existing business models and investment plans. But do the benefits of promoting and accelerating condominium fibre and complementary wireless services outweigh the costs to a small segment of existing telecom suppliers? This will be a very challenging question facing government policy makers in the coming months. Bill St. Arnaud is the director of advanced networks at CANARIE Inc.

Why fibre and wireless complement more than compete with each other

News | January 22, 2001

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