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February 22, 2013

France Calls for New Round of Broadband Access Investment

By Gary Kim, Contributing Editor

The French government now has a new plan to create fiber to home networks, but has not said how the plan will be funded, or what the target capabilities will be. The plan is described as requiring a 20 billion euros investment, expected to be financed roughly in thirds.

The plan calls for investment of about €7 billion, in the denser urban areas, directly by service providers. Another  €7 billion would be needed for networks serving less dense areas, said to be based on use of “public infrastructure deployed by local communities,” with an as yet unspecified mix of public and private investment.

Finally, in the rural areas, perhaps €7 billion or so would be built using public sector financing alone. The plan calls for a decade-long construction plan of about €200 million.

According to some reports, new taxes on telecom services will be required, as well as subsidies for loans taken out by local governments.

The plan will require the agreement of one or more French telcos, depending on how the government sees construction and wholesale leasing policies being handled. If France Telecom is seen as the builder and operator of the entire wholesale network, it and the other French telcos will have to agree on the terms and conditions for wholesale access to the new access networks.

Presumably that would be key mostly in the rural areas and middle density regions, as the plan likely would not prohibit contestants from building their own, fully controlled networks in the dense urban areas.

Rural networks also could take another form, and be built and operated by public-private entities, as already was envisioned in France.

It is possible cable operators might be included in the plan, to some extent, as well, though it is not yet certain what wholesale obligations might be considered, if cable networks are involved in building the wholesale network.

Also uncertain at this point are service provider intentions. Will they agree to new taxes that will raise the price of existing communication services? Will all the key providers agree on wholesale obligations?

Will one or more service provider contestants eventually decide to collaborate with local governments in the rural areas?

In fact, can agreement be gotten soon enough to begin work before a potential new government comes to power?

Also, how much of the plan simply incorporates earlier decisions made by France Telecom (News - Alert) for construction of new facilities in the largest cities, in any case? 

Edited by Brooke Neuman
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