Watch out for the evils of open-access, warns ISP founder

Open-access is punted as a way to bring more competition to the fibre market and drive down prices, but the benefits may be limited if there is no competition on infrastructure.

This is according to Cybersmart founder and CTO Laurie Fialkov, who was speaking at the MyBroadband Underground Conference.

Fialkov said many fibre network providers sign exclusivity agreements with landlords or neighbourhoods, stating they are open access – which will ensure competition.

However, Fialkov said this model is the same as Telkom’s ADSL service – where the infrastructure provider is handed a monopoly.

With no competition on infrastructure, he said there is no need for the fibre network provider to innovate, offer higher speeds, or improve service levels.

This means that Internet service providers which offer services over the open-access fibre will slash their prices because of competition, but that the infrastructure provider is unlikely to do the same.

Formula 1

Fialkov compared the situation to Formula 1, but where all drivers – ISPs – drive the same car – fibre infrastructure – made by one manufacturer.

Drivers will battle it out to perform the best, but there is unlikely to be a lot of innovation to produce better cars, as there is no competition between manufacturers.

Fialkov said competition on infrastructure is important in South Africa, as it will produce more affordable and better broadband services.

While open access can help bring competition to ISPs, it should not come at the expense of competition on infrastructure through exclusivity agreements, he said.

Now read: Faster fibre speeds from Cybersmart in 2017

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Watch out for the evils of open-access, warns ISP founder