In January 2021, the regulator proposed to update the country’s telecom code. Under a draft updated Code of Practice for Competition in the Provision of Telecommunication and Media Services (the Code), the regulator proposed to make a number of changes to ensure the framework still effectively supports the market. The regulatory framework includes extensive provisions on sharing of passive infrastructure. Singapore does not define markets in the way EU member states do, but the IMDA does consider some operators to be dominant in certain markets. A licensee is classed as dominant if it is licensed to operate facilities used for the provision of telecom services that are difficult to replicate. These licensees have a duty to offer wholesale services and access to ducts, monopoles, manholes, dark fiber, and so on. Originally these provisions only applied to facilities-based operations (FBO) licensees; however, in the 2021 update, the regulator proposed to extend the resource-sharing provision to services-based operations (SBO) licensees. The revised Code continues to retain the regulatory principle of promoting facilities-based competition for telecom markets but proposed that if a network element is more passive and comprises civil-based infrastructure, then a historic cost accounting / regulated asset base (HCA/RAB) pricing methodology should be adopted.
Ensuring the regulatory framework in the country is robust while effectively reflecting market conditions and requirements has been key to supporting successful fiber rollout programs. The infrastructure access requirements have boosted competition, and in particular, passive access to the PON is working well. However, it has also been critical that the regulator has recognized that passive-only remedies for FTTH are insufficient to enable FTTH competition everywhere, so both active wholesale remedies and passive remedies have been implemented.
As operators started to deliver services over fiber, IMDA proposed in 2019 to remove legacy services such as the unbundled network elements, unbundled network services, and colocation facilities from the schedule of regulated services, interconnection related services (IRS), and mandated wholesale services (MWS). The aim was to avoid overburdening operators and allow them to focus their efforts on rolling out fiber connectivity. Following an extensive review, the regulator finally decided in January 2021 that copper services had not significantly contributed to market development and there had been zero take-up of the legacy services over recent years, so it could withdraw the regulation of these services. In particular, it decided to withdraw the unbundled network elements—namely local loops, sub-loops, line sharing, distribution frame access, and internal wiring services—from the IRS and MWS schedules.
National broadband plan and universal service obligations
Spain is the leading European country in the FDI. It has successfully rolled out its national fiber network to 86% of homes, but with a greater geographical spread of communities than in countries such as Singapore, it still has challenges in improving rural connectivity.
Spain’s current success is based partly on an ambitious “300×100” plan to deploy a high-speed fiber-based broadband network with speeds of 300Mbps to 100% of the nation during 2018–21. The government approved €525m ($626m) of funding for this four-year project. National FTTP coverage increased to 86% of households by the end of 2020. Fiber coverage has long been part of the country’s plan, however: in February 2013, the Digital Agenda for Spain adopted the targets of the European Commission’s Digital Agenda, but the government also set interim targets for 2015 of 50% FTTH coverage and 47% HFC coverage.
The country’s Digital Agenda 2025 was introduced in July 2020 with the aim of improving rural connectivity and reducing the digital divide. The €140bn ($167bn) initiative aims to provide 100Mbps connectivity to 100% of the population by 2025. In December 2020, the government received public funding worth €4.3bn ($5.1bn) to expand the fiber-optic network infrastructure in rural areas. An estimated amount of €883m ($1,053m) is proposed in the 2021 budget. In addition to the public sector, the government expects contributions from the operators to roll out FTTH across the country.
One key aspect of Spain’s success has been the focus on providing funding for rolling out very-high-speed networks to homes and businesses in rural and dispersed areas (called “white areas”). In November 2019, Spain’s Ministry of Economy and Competitiveness (MINECO) approved €140m ($167m) of funding for the National Program of Extension of the Broadband of New Generation (PEBA-NGA), which is cofinanced by the European Regional Development Fund. The program aims to provide access to speeds of at least 100Mbps for 706,000 homes and businesses in white areas. This ultra-high-speed broadband is expected to provide connectivity to 91.24% of the population by 2021. In addition, the program intends to deploy networks that are capable of supporting services with uplink and downlink speeds of a minimum of 300Mbps, covering 95% of the households in each province. In November 2020, MINECO awarded the broadband provider Adamo funding worth €72m ($86m) to lay fiber-optic infrastructure, which will provide 1Gbps connectivity to 450,000 unserved households in the rural regions of 19 provinces. The provider intends to invest around €165m ($197m) in the rural fiber rollout with the aim of reducing the digital divide.
In February 2020 MINECO published a consultation on a proposal to revise its PEBA-NGA €400m ($477m) program for 2019–21. The ministry decided to expand ultrafast broadband networks in the gray areas and provide connectivity to 1.5 million additional residents. In July 2020, the council of ministers approved the proposal to grant €150m ($179m) for deploying FTTH networks in underserved regions under the PEBA-NGA program.
Spain has seen significant uptake of duct access that has helped to drive infrastructure-based competition in next-generation access (NGA) broadband. FTTH is being rolled out by alternative operators as well as the incumbent because of high-quality, low-cost duct access and the comparatively high number of multidwelling units in cities. There is also a range of active remedies in place in addition to passive obligations with associated QoS requirements including installation timescales and fault-resolution timescales. Some countries around the world, including Spain, have granted an exclusivity period to the first operator that builds fiber in a designated area to encourage fiber investments. Meanwhile no fiber wholesale obligation is required in subnational competitive areas (where at least three next-generation networking players are providing service in the area).
In Spain there is a focus on ensuring fiber network investment by reducing costs or other barriers to network deployment and encouraging infrastructure sharing, although in competitive areas regulation is reduced. This has been the case since at least 2009, when the regulator reviewed the market for wholesale broadband access and defined it for the first time as incorporating wholesale broadband access regardless of whether this used public switched telephone network (PSTN) or fiber-to-the-x (FTTx) technology (up to 30Mbps). The market was reviewed again in 2016, and since then the competition regulator the CNMC has differentiated obligations for copper and fiber networks based on their differing competitive pressures in various geographical areas. It also introduced a controversial new obligation requiring the incumbent, Telefónica, to provide its competitors with access to its FTTH network only across certain parts of the country where there are fewer than three competing fiber networks. In 2020 the regulator also placed an obligation on Telefónica to provide wholesale access to its physical infrastructure for the deployment of fiber networks. Unlike in Singapore, the bulk of next-generation network investment in Spain has been funded privately. Access to Telefónica’s poles continues to present a bottleneck for the deployment of ultrafast access networks in areas away from urban centers because of their operational difficulties and high costs, but the operator is looking to address this.
Key to the high levels of FTTH coverage in Spain has been the low investment requirement in order to roll out FTTH, which has encouraged private investment in infrastructure. The cost to connect premises is far lower than in many other places around the world, and this has been achieved through extensive access to ducts at regulated prices to enable faster and cheaper deployment of high-speed networks. Maintaining a competitive market has pushed the incumbent to roll out fiber to compete with alternative telcos and cable operators.
National broadband plan and universal service obligations
China has been ambitious with its connectivity targets considering the size of the country and scale of the population. The country currently sits in fourth position in the FDI, having witnessed the highest increase in its FDI score of all the cluster 1 countries in the latest update.
The State Council launched its national broadband strategy Broadband China in 2013. Initially the increase in the ratio of FTTH users was slow. To push forward the fiber access network construction, therefore, in 2014 the Ministry of Industry and Information Technology (MIIT) and the Ministry of Housing and Urban-Rural Development (MHURD) made a joint announcement about the new national standards for fiber preinstallation and sharing with operators in new buildings, which created a clear requirement for fiber cabling and installation engineering and removed obstacles from property management organizations. According to the new standards, before new buildings receive a sales permit, the access fibers to every household and the rooms for communication device deployment must be completed and have passed the acceptance tests. All engineering costs should be covered by building developers. With strong support from government, the fiber access ratio among all broadband users increased significantly from 2015. By the end of 2020, 92% of home broadband users in China were using fiber access technologies.
Between 2016 and 2018, the MIIT and National Development and Reform Commission (NDRC) jointly led a three-year action plan for the construction of communications infrastructure with a budget of CNY1,200bn ($181bn). The plan aimed to support the development of high-speed fiber optics and the construction of advanced mobile broadband systems and global network facilities. To execute this plan, the government focused on 92 selected infrastructure projects, with a total investment budget of CNY902.2bn ($136.3bn). Prioritizing certain projects allowed the government to focus on the areas most in need.
In 2019 the MIIT proposed a “dual-gigabit acceleration, same speed for same network” plan to promote fixed broadband gigabit applications in order to keep pace with bandwidth-hungry services. This involves utilizing 10G PON technology to create a dual-gigabit broadband service that features both wired and wireless gigabit broadband.
There is currently no regulation imposing a broadband USO across the entire country. However, the MIIT supports the upgrade of fiber broadband in 130,000 administrative villages, including 43,000 poor villages. By November 2018, 96% of administrative villages had achieved optical-fiber access, and the country expanded broadband infrastructure to 94% of underserved villages, which was ahead of schedule according to the country’s broadband strategy, which required operators to expand broadband infrastructure to 98% of underserved villages by 2020.
In 2021, China has shifted its focus from broadening coverage of the fiber network to increasing the speed and improving the quality of broadband services. In March 2021 the MIIT released a plan to expand the gigabit network to cover 200 million people by the end of the year and 400 million by the end of 2023. The government also targets 10 million gigabit users by the end of 2021, a goal it is already well on its way to achieving. Additionally, the government has set a target that 5G should be available in all areas above the county level and in some key townships by the end of 2021.
Telecom towers, poles, ducts, base station equipment, and transmission lines must either be shared
for existing facilities or co-constructed for new facilities in China. No duplicated construction of such infrastructure is allowed in any location unless prior approval is received from the provincial telecom regulators. Other types of telecom facilities (e.g., optical-fiber cables) must be shared to the extent that conditions permit.