3 Pros and Cons of Open Access Networks for Municipalities

Multiple strategies are being considered to extend high-speed broadband to communities across the country. One model designed to overcome this problem is the open access network (OAN). 
 

In this model, the underlying network could be owned by a variety of players from the municipality benefiting from the network to a network operator. The network then supports multiple service providers at the retail level. These providers can compete for subscribers without the financial commitments of building and supporting their own networks.

Municipalities Look to Open Access to Deliver Community Broadband

In some cases, OANs are owned by municipalities. These partnerships between the public and private sectors share common goals: bringing fiber broadband to the municipality’s community and stimulating competition. 
 

In this context, OANs are seen as a public utility, usually deployed by a municipality on a non-profit basis. A comparison can be made to transport infrastructure. Roads are built and maintained by the municipality and available to road users of all types. The municipality does not usually extract direct profit from the venture but benefits from the wider economic advantages of deploying infrastructure.
 

What are the pros and cons of OANs for municipalities? Let’s take a closer look. 

3 Pros of Open Access Networks for Municipalities

1. Lower barriers to entry. By opting to run services on an OAN host, retail service providers (RSPs) can get to market without the upfront costs of building and maintaining their own network. 

2. Increased competition. The lower barriers to entry can stimulate competition between multiple RSPs, providing more choice and price competition for the end consumers served by the OAN. 

3. Extending coverage to hard-to-reach areas. An OAN can be deployed by a municipality in areas where privately-owned networks are not economically viable. 

3 Cons of Open Access Networks for Municipalities

1. A “race to the bottom” on price. RSPs on open access cannot differentiate on network quality. Therefore, they lean in on pricing as a distinguishing factor, opting for price-based marketing and sales. There is risk of an unsustainable “race to the bottom” based on pricing, as price alone is not enough to keep continued interest and long-term end consumer loyalty. 

2. Lack of expertise. Municipalities may be ill-suited to the telecoms sector, lacking the required expertise to build and maintain broadband networks. 

3. Inability to attract RSPs to the network. Several OANs have failed due to a “build it and they will come” approach. Will the OAN be able to attract enough RSPs to its network to be sustainable? 

In many municipalities across the country, those communities have been left behind by larger operators from a lack of service due to outdated infrastructure. If successful, these OANs lead to more choices and better value for subscribers. 
 

However, building a sustainable OAN can be complex and challenging, particularly for municipalities lacking experience in this area. Many fail due to funding problems or a lack of interest from RSPs or subscriber take-up.
 

For municipalities, open access networks are a viable model to help close the digital divide. Especially for areas that are often left behind in network builds by larger incumbents, this model gives municipalities an edge in their mission to provide high-speed, reliable broadband and exciting services alongside the network.
 

Interested in learning about the last two pros and cons of OANs? Download our eBook, “How Open Access Can Help Municipalities Deliver High-Speed Broadband and Competition to Communities.”