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When, in the early 1980s, the fresh wind of free-market competition and privatization became the order of the day, political leaders like Margaret Thatcher in the UK and Ronald Regan in the USA understandably wanted to apply this economic doctrine to the monolithic, vertically integrated, telecoms sector which had resulted from a century of state intervention and manipulation. These were the twilight years of an analog world, soon to be replaced by the new dawn of disruptive digital technologies. But under the new watchword of 'competition', rather than attempt to wind back the clock and dismantle these state-created telecom silos of the preceding century, legislation was passed to permit and promote the formation of new, look-alike, "service providers" based around a vertically integrated business model of 'network + services'. And so for over two decades, the focus of competition was at the level of network competition with billions of dollars being needlessly invested in duplicated infrastructure. It surely brought smiles to the shareholders of equipment vendors, but this bubble of excess capacity finally burst at the turn of the century. Markets require scarcity to exist.

The time has now come to take stock and to think again about the likely consequences of perpetuating this flawed policy when it comes to local access networks and many local political leaders are beginning to do just that - exemplified by the members of INEC. However, it would appear that EU Telecommunications Commissioner Viviane Redding is another ‘perceptive commentator’ beginning to think again on the matter.

And so she should. In the light of the determination of local cities and communities to outperform and compete against other cities – both in their own country and abroad – in all aspects of their local socio economic life, just contemplate the disadvantage a local economy will suffer, if it has to finance and ‘support’ more than one information infrastructure! As the years pass, duplicated local access infrastructure will impose an massive financial burden on local economies where they exist, as each and every local access network will end up having to support its CAPEX and OPEX on the back of revenues from a % of the same total available market. This can only be reflected in higher connectivity costs than would result from a single open public local access network (OPLAN), properly structured so as to prevent rent seeking as a result of such a solus position.

And who is best placed to help deliver to a visionary city the world-competitive advantage that will result from such a single OPLAN? Why, the incumbent telecoms operator, of course! I wonder when one or more of these will awaken to the opportunity they have to release substantial shareholder value by divesting, on a city by city basis, their obsolete local infrastructure into any new OPLAN special purpose vehicles that are brought into being by visionary local political leadership and which ensures that they, the incumbent, have access to the ‘best network’ in that particular market for the long term – without any need for additional investment and without stranding their existing assets!

I predict we will see some startling steps in this direction in the near future.

© Malcolm Matson 2007, Oplan Foundation