As is argued in the Appendix, the new technologies demand a revised understanding of what is meant by ‘open’.  In the past two decades, the development of public policy directed at promoting competition through a process of ‘licensing’ has created a new class of alternative service providers or carriers.   What is now becoming clear is that the low cost digital technologies of abundance are rendering meaningless any watertight distinction between service or content ‘creators’ and ‘consumers’.  This is driving a new meaning to the term “open” which is not based simply on ‘being open to competing licensed operators/service providers’ but rather, being ‘open’ to anybody and everybody to provide content and service.  It is very early days to predict the rate and extent to which this mass market swell of demand for open, peer-to-peer connectivity will advance and clearly there are massive political issues at stake, but at the date of this Study, it would appear to be an unstoppable trend.

 
However, in the U.S., which has the largest number of municipal owned networks, the conventional model has been that of a closed network where the municipal owned utility provides all the services on that network and does not provide access to competitors.  In a study undertaken on open access in municipal networks in 2004, the authors concluded that, of the estimated 250 – 300 community-operated networks, only about 10% of them provide or intend to provide some level of open access.[xxii]

This is in contrast to the open access network approach adopted in countries like Sweden and the Netherlands, where the municipal government provides open access to all suppliers and does not provide any retail services.  Sweden was at the forefront in the development of the FTTH Local Open Access Model by local authorities with the deployment in the City of Västerås. This experience has shaped the approach now being taken in the design of new LOANs.  Based on research conducted by the Allen Consulting Group (2003)[xxiii] for the Queensland Government in Australia, this open access model is more cost effective than that of the closed model.
 

Open access enables multiple competitors to use the facility required for service provision. The access is open if all competitors can access the facility under similar terms related to cost and quality of service. A LOAN facilitates entry by removing the high fixed costs associated with the need for each competitor to deploy its own infrastructure.

 
There does appear to be a shift towards an open access model in the United States, as evidenced by FTTH projects like UTOPIA[xxiv] and i-Provo in Utah, and new municipal wireless projects, where the emphasis is on providing the infrastructure on a wholesale basis for use by multiple service providers.  The model as developed in much of Sweden and replicated in UTOPIA, allows the network operator and/or owner to take a share of the service revenue generated by the retail providers. Some have argued that this change in policy and operation may be driven to some extent by state legislation that restricts the provision of retail services by local governments and in response to complaints by the telecommunications industry of unfair competition.  However, the principal reason cited by both UTOPIA sponsors and the City of Provo is that open access is a much superior business model.

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