Industry structure, ber ownership and competition in Visual Studio .NET

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857 Industry structure, ber ownership and competition
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Accordingly, given the existence of these discriminatory incentives and the economics of the ber-to-the-home industry, the most viable long-term competitive market structure involves the presence of a wholesale supplier (that is not vertically integrated) and its ef cient functioning as a regulated common carrier The presence of a neutral rm that builds and owns the ber infrastructure and offers nondiscriminatory access to all service providers will signi cantly lower entry barriers to rms intending to provide video, voice and data services Since this neutral rm will not provide retail services, it would have no incentives to raise a non-facilities-based service provider s key input of production by non-price behavior Consequently, the exclusively wholesale and neutral nature of such a rm would permit a market that could have otherwise sustained only one (or at the most two) facilities-based competitors to sustain multiple service providers We now explore who might build and own FTTH infrastructure and the implications of different ownership scenarios for competition
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H Helein, A Call to Arms to Local Competitors , http://wwwclec-planetcom/forums/heleinjune14html this context, a retail competitor is a non-facilities-based competitor providing telecommunications and information services to each home 25 In this context, the wholesale market is where the infrastructure owner rents out network elements so that nonfacilities-based competitors can provide telecommunications and information services in the retail market 26 Opportunity cost = AC + (MS) ( ); where AC = average cost of production, MS = market share and = retail margin The opportunity cost goes up with retail market share Intuitively, this means that the higher the retail market share of the rm, the higher the probability a UNE sale represents a lost retail customer Conversely, in the presence of infrastructure competition (eg from cable), a UNE sale can increase scale economies in infrastructure, thus raising the pro tability of the rm s infrastructure, whether leased to retail competitors or used for the rm s own retail operations
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Towards a Technologically and Competitively Neutral Fiber-to-the-Home (FTTH) Infrastructure
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8571 Private enterprise Private players own most of the current FTTH deployments in the United States Many ILECs, CLECs and Cable MSOs are in the process of making fundamental choices about technology and planning deployments Private players are expected to build the lowest cost networks and networks that facilitate as little competition as possible Though one can imagine private players (like electricity or gas companies) playing the role of a neutral infrastructure owner, ILECs, CLECs, Cable MSOs and other overbuilders who own the ber infrastructure are expected to be vertically integrated service providers as well This does not augur well for services competition above the facilities layer 8572 Subscriber (or community) There have been a few suggestions in contemporary literature [6] that, just as subscribers own their home networks, they should own the ber from the home to the CO There are in fact new housing builds where builders are contemplating building a ber to each home, where the ber is owned by the Homeowner s Association This green eld deployment can lead to a much lower cost, as trenching can be accomplished before roads are paved Though one can imagine subscriber ownership in green eld contexts, it looks very unlikely in current developed residential neighborhoods One can expect practical problems associated with getting all homes to participate Even if subscribers were to build and own their ber, there have to be special arrangements for maintenance of the ber 8573 Local government The local government, on the other hand, looks reasonably well-positioned to build FTTH infrastructure [6] Local governments of many cities have evinced strong interest in building FTTH infrastructure in order to attract hi-tech investment, and many FTTH deployments to date are municipally owned, either directly or through a municipally owned electric utility Government ownership of FTTH infrastructure can provide the neutral platform over which the private players can provide services In many communities, the public sector is a large consumer of bandwidth, therefore it seems reasonable for the local government to build this infrastructure The involvement of the local government can lead to an early and widespread deployment (contrary to the cherry picking that the private players are expected to engage in) Local governments also have easy access to rights of way and, depending on how the project is nanced, can also have access to low-cost capital By limiting its activities to building, owning and maintaining the ber, and with the private players owning the end electronics, the local government does not have to keep pace with electronics technology that is changing rapidly Therefore, a public private strategic partnership seems like one possibility that can lead to a competitive industry structure 8574 Investor-owned regulated common carrier A nal ownership possibility is that of an investor-owned common carrier that is rate-of-return regulated One particularly interesting case is if private players (who intend to provide service) form a consortium that builds and owns the ber The involvement of private players (who
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