Imagine if BMW built its own road, and only BMWs were allowed to drive on that road.
It’s easy to see that such a monopoly would be bad news for people buying cars, for the quality of the road, or for the wider society that the road infrastructure supports. Yet that’s exactly how telecoms networks are developed in many parts of the world. These networks are just as important as roads — in fact, in the not-too-distant future they will be essential for the functioning of every system and piece of infrastructure that we rely on.
Originally, networks were used only for telephony and broadcasting. It made sense to have dedicated infrastructure for each, optimized for specific types of physical signal and traffic pattern, and for the service provider and the network operator to be the same.
But technology has evolved dramatically since then. The available services are booming: telephony (mobile or fixed), web access, email, HDTV, video conferencing, streaming, gaming — as well as all the internet-enabled appliances that comprise smart cities and the “internet of things”. For all of these, information is stored and transmitted digitally, increasingly using the IP protocol. And the end user is no longer just a consumer but a producer of content too.
The open access model is the solution for best service
In this market, a vertically integrated model with a dedicated network infrastructure for each service becomes highly inefficient. One alternative is the open access model, developed over the last 15 years in Sweden, and now gaining acceptance around the world.
In the open access model, many services are delivered by different providers over the same infrastructure, so there is competition to deliver the best service at the best price. Once the end user is connected to the network, they can choose any service they like, without any need to change the equipment in their premises. The basic idea is to promote the highest degree of competition, maximizing freedom of choice for end users and avoiding monopoly. An important underlying principle is that we are building an infrastructure for society — not merely to generate revenue.
In the Swedish model, infrastructure and services are divided into three parts: the passive infrastructure, the active equipment and the service providers. The passive infrastructure — the cabling under the streets — is the property of the network owner, which can be a company owned by the city. The active equipment is supplied by a communications provider, which may also be owned by the city, or could be a private company. On top of this is the equipment of individual service providers, through which they connect to the network and deliver services to users. The network owner and communication provider can be a single company. But the service providers must be separate to avoid conflicts of interest.
The financial flow is based on revenue sharing. End users buy services from service providers, who in turn pay rent to use the infrastructure. The network provider may also receive one-off connection fees from property landlords.
You could say that a wholesale operator performs a similar role to the network owner when they rent out a common infrastructure to different service providers. The main difference is that under the open access model, there is a stricter agreement governing commercial and technical issues between the service providers and the network provider.
Monopolies are problematic in smart cities
There are also a few cornerstone clauses that can’t be negotiated. One is that the cost of using the infrastructure is the same for all operators, big and small. If a larger operator gets a discounted rate, the whole thing falls apart.
Monopolies are going to become increasingly problematic as cities seek to get smart — internet communications are a critical enabler here. For example, connectivity underpins software to optimize logistics and transport, or smart grids, which feed back information on energy use. Efficient, affordable internet services are key to economic sustainability and to social life — good connections need to be planned for, just as urban planners create public spaces where people can get together.
But it goes way beyond network access. Many components of the network — domains, user devices, internet-enabled appliances and sensors — could collaborate to make future smart cities work better. A generic approach would mean we could reuse as much as possible — so fewer products and no need for separate network connections, saving money and energy.
But only if they speak the same language. Unfortunately, most of the systems monitoring and controlling systems for heating, lighting, smart homes and office equipment currently use their own proprietary protocols.
Realizing a truly sustainable smart city will require a joint effort on many different levels — technical, societal and commercial — and communications technology will be central to enabling and coordinating a mesh of solutions. We will only realize all the benefits of technology if we have the right infrastructure in place, and if everyone can use it.