Open-access network

Based on Wikipedia: Open-access network

In 1935, the federal government drew red lines around Black neighborhoods on city maps and declared them unfit for investment. The practice was called redlining, and its effects persist ninety years later. Decades later, a different kind of redlining emerged in the digital age, not drawn in ink on paper, but etched into the very architecture of our telecommunications infrastructure. For most of the 20th century, the physical networks that delivered our voice and video were designed around the severe limitations of the technology of their time. Copper-wired twisted pair telephone lines were physically incapable of carrying television programming, while the coaxial cable networks built for TV could not carry voice telephony. These were not just technical constraints; they were business models built on scarcity. The entity that owned the wires was the only entity allowed to sell the service that traveled over them. This vertical integration created natural monopolies that stifled innovation and locked consumers into a single provider. But as the 20th century drew to a close, the rise of packet switching and IP-based technologies shattered these silos. It became possible to design, build, and operate a single, high-performance network capable of delivering hundreds of distinct services from multiple, competing providers simultaneously. This technological shift birthed the Open-Access Network (OAN), a radical departure from the status quo that reimagines the internet not as a product to be sold, but as a utility to be shared.

An open-access network refers to a horizontally layered network architecture that fundamentally separates the physical access to the network from the delivery of services. In this ecosystem, the owner or manager of the network infrastructure does not supply the services that run on it. Instead, these services must be supplied by separate retail service providers. The term "Open Access" describes a specialized and focused business model where the network infrastructure provider deliberately limits its activities to a fixed set of value layers to avoid any conflict of interest. The infrastructure provider creates an open market and a neutral platform for internet service providers (ISPs) to add value, competing fiercely on price, customer service, and package offerings while the physical network remains a common carrier. The OAN provider remains strictly neutral and independent, offering standard and transparent pricing to all ISPs on its network. It never competes with the ISPs it hosts. This separation is the key to unlocking the true potential of the digital economy, transforming the network from a gatekeeper into a marketplace.

To understand why this separation is so revolutionary, one must look at the value chain of the OAN, which consists of three distinct layers or stages: the passive infrastructure, the active component, and the services offered. In the traditional vertical model, a single telecom giant owns the wires, the switches, the routers, and the customer service department, controlling every aspect of the user experience. In the OAN model, this chain is broken apart into three specialized roles. First, there is the infrastructure provider (PIP), who owns the passive infrastructure—the physical cables, ducts, and conduits—and maintains them. Second, there is the network provider (NP), who operates the active technical components like switches and routers, and is usually the owner of this active layer. Finally, there is the service provider (SP), the face of the operation, who provides the digital services, customer support, and billing to the end user. These roles can be filled by different entities, or combined in specific ways depending on the local market dynamics and the specific business model chosen.

The players in this broadband value chain are as diverse as the communities they serve. The backbone PIP owns and operates the passive infrastructure of the backbone network and, to a certain extent, the area networks. This entity might be a public or private sector player with long-term investment plans, or occasionally a local cooperative. The access area PIP owns and operates the "first mile" connections—the critical link between the main network and the individual home—and the passive infrastructure in area networks. This role can be filled by a telecommunications operator, a housing association, a local cooperative, the owners of apartment buildings, the municipality, or even homeowners who have a long-term interest in the area. Service providers (SPs) can range from small local entrepreneurs to large national companies, all providing services to end users via the network provider's infrastructure. This modularity allows for a level of competition and specialization that was previously impossible.

The construction of broadband networks usually requires considerable capital investment, which historically has led to a natural monopoly position for the operators. Building the physical plant is expensive, and once built, the marginal cost of adding a new customer is low, creating a barrier that discourages competitors from laying their own parallel cables. For this reason, various models have been developed over the years to promote competition between service providers and lower the barriers to market entry. These models are not merely theoretical; they are practical solutions to the economic realities of network deployment. One such model is PLOM, which stands for Passive Layer Open Model. In this model, the passive infrastructure is either built directly by an entity or by way of a contract award. Ownership of the passive infrastructure remains with the PIP, which is also responsible for its operation and maintenance.

The special feature of the PLOM model is that the broadband network is open at the passive level. This means that competing operators have direct access to end users via physical connections. There is a distinct separation between the backbone PIP and the local area PIP. The backbone PIP is responsible for connecting the different parts of a region, county, or municipality, acting as the arterial system of the network. The local area PIP is responsible for providing the local loops and sometimes the area network, acting as the capillaries that reach the individual homes. The PLOM model gives operators a high degree of freedom and control in the design of their access network, which is a significant advantage for those who want to innovate at the physical layer. However, this freedom comes with a cost. A disadvantage of this model is that under PLOM, competing operators must install their own active technology in the access node of the area they wish to serve, unless a sharing agreement is reached. If the population density is too low, each access node aggregates only a small number of users. In such scenarios, the presence of more than one operator in each area is not economically viable. Each operator would be forced to bear the high fixed costs of active equipment for a small customer base, weakening competition and leading to high operational expenditures (OPEX) and capital expenditures (CAPEX). Overall, the PLOM model is best suited to relatively large and densely populated areas such as larger cities, where the density of users can support the infrastructure costs of multiple active players.

In more sparsely populated areas, the PLOM model often fails to generate the necessary returns, leading to the adoption of the 3LOM or ALOM models. These models achieve competition between service providers through an open network at the active level to facilitate market entry. The PLOM model is often used by publicly maintained municipal networks in large cities, with the public sector assuming the role of backbone PIP. A prominent example of this model is Stockholm's fiber optic network, which has become a global benchmark for municipal broadband success. In Stockholm, the city built the passive infrastructure, allowing multiple ISPs to compete on the active layer, driving down prices and increasing speeds for residents.

In contrast to the PLOM model, in which separate passive and active layers are operated by different entities, the ALOM (Active Layer Open Model) integrates both layers in one hand. This entity installs technology in all access nodes and sets up an open, operator-neutral network via which all service providers can deliver their services to all end users. In the value chain of the ALOM model, the role of the backbone PIP and the NP is combined into a single entity. The backbone PIP+NP earns revenue from the service providers by delivering their services to the end users through its backbone network and to the subscriber lines that the backbone PIP+NP leases from the access area PIP, for which it pays a fee. End users receive their services from their chosen operator for a service fee. In some cases, the network fee is paid directly to the PIP+NP. The access area PIP can generate revenue by receiving payments from end users for the passive infrastructure. This model reduces the complexity for the service providers, as they do not need to manage active equipment at the edge of the network, making it more attractive for smaller ISPs to enter the market.

The 3LOM model offers a variation where the public sector is responsible for the role of the PIP, while the role of the NP is assigned to a single company that operates the active layer and establishes an open, operator-neutral network. To ensure fair and non-discriminatory conditions for all SPs, the NP is not allowed to provide services itself. This strict separation prevents the network operator from favoring its own retail arm, ensuring a level playing field. The vertical model, by comparison, describes an approach in which established telecommunications companies own the infrastructure and technology and offer services directly to end customers. They are usually also able to provide access to wholesale tiers that enable other service providers to gain access. It is a proprietary model where the telecom operator has significant market power and is able to grant its competitors access to the network in the physical layer or in the active layer. Competing operators can either install their technology in the access node of the areas or install their network technology in a data center where it is coupled with the network owner. However, the disadvantage of this model is that it can lead to the telecoms operator assuming a monopolistic position and restricting competition. The operator has an inherent incentive to prioritize its own services over those of its competitors. For this reason, some countries have rules that allow competitors to access the network in the physical layer or in the active layer in order to promote competition, effectively mandating an open-access approach within a vertically integrated framework.

The OAN concept is appropriate for both fiber and WiFi access networks, especially where exclusivity cannot be allowed or would be detrimental to the public interest. The shared maintenance costs make it appropriate for rural areas, where traditional Internet service providers (ISPs) may be reluctant to provide a service due to the low return on investment. Open access networks are also viewed as a feasible way of deploying next-generation broadband networks in low population density areas where service providers cannot obtain a sufficient return on investment to cover the high costs associated with trenching, right-of-way encroachment permits, and the requisite network infrastructure. In these scenarios, a public entity or a cooperative can build the passive infrastructure, absorbing the initial capital risk, and then lease access to multiple ISPs who can then compete to serve the rural population. This model has been successful in places like Utopia, a regional fiber network in Utah, and various municipal projects across Europe.

The distinction between these models often comes down to geography and density. In dense urban environments, the PLOM model thrives because the sheer volume of potential customers justifies the cost of multiple operators installing active gear at every node. In these cities, the competition is fierce, and the consumer benefits from a wide array of choices. In rural or semi-rural areas, the ALOM or 3LOM models are often preferred because they lower the barrier to entry for service providers. By centralizing the active layer, the network provider can offer a "white box" service to ISPs, who can then focus entirely on marketing and customer service without worrying about the complexities of network management. This division of labor allows the network to be built and maintained efficiently while still fostering a competitive retail market.

The implications of the open-access model extend far beyond mere economics. It touches on the very nature of the internet as a public good. By separating the infrastructure from the service, OANs prevent the digital divide from widening. They ensure that the physical layer of the internet does not become a tool for censorship or discrimination, as the network operator has no interest in the content being transmitted. This neutrality is crucial in an era where the internet is the primary medium for news, commerce, and social interaction. The OAN model also encourages innovation. When service providers do not have to worry about the costs of building the network, they can focus on developing new applications, services, and business models. This has led to a proliferation of niche ISPs that cater to specific communities, offering specialized services that would not be viable in a monopolistic market.

However, the transition to an open-access model is not without its challenges. It requires a shift in regulatory frameworks, a change in the mindset of investors, and often, a significant upfront investment in infrastructure. The success of these networks depends on the ability of the various players to cooperate and maintain the neutrality of the platform. In some cases, the public sector has had to step in to facilitate this transition, acting as the backbone PIP to jumpstart the market. In others, private consortia have formed to build and manage the infrastructure, with the promise of open access enshrined in their business plans.

As we look to the future, the open-access network model is likely to become the standard for next-generation broadband deployment. The costs of fiber deployment continue to fall, but the barriers to market entry for new service providers remain high in the traditional vertical model. The OAN offers a solution that balances the need for massive infrastructure investment with the benefits of a competitive market. It is a model that recognizes the network as a shared resource, a platform upon which a diverse ecosystem of services can thrive. From the dense streets of Stockholm to the quiet rural communities of the American Midwest, the open-access network is proving that when we separate the pipes from the products, we create a more robust, innovative, and equitable digital future.

The story of the open-access network is a story of rethinking the relationship between infrastructure and service. It is a rejection of the idea that the owner of the road should also be the only trucking company allowed to drive on it. By embracing horizontal layering, we unlock the full potential of our digital infrastructure. We create a marketplace where the best ideas win, not the company with the deepest pockets to build the network. In a world increasingly dependent on connectivity, this is not just a business model; it is a necessity. The OAN ensures that the internet remains a place of opportunity for all, rather than a toll road for the few. As we move forward, the lessons learned from the open-access networks of today will shape the telecommunications landscape of tomorrow, ensuring that the promise of the digital age is delivered to every corner of the globe.

"The Open Access provider remains neutral and independent and offers standard and transparent pricing to ISPs on its network. It never competes with the ISPs."

This simple statement encapsulates the core philosophy of the OAN. It is a commitment to fairness, to competition, and to the public interest. It is a recognition that the network is too important to be left in the hands of a single entity. By adhering to these principles, open-access networks are paving the way for a more connected and competitive world. The journey from the copper wires of the 20th century to the fiber optics of the 21st century is not just a technological evolution; it is a philosophical shift towards a more open and inclusive digital society. The OAN is the embodiment of this shift, a testament to the power of collaboration and the enduring value of competition. As we stand on the brink of a new era in telecommunications, the open-access network stands as a beacon of what is possible when we choose to build our future together.