While Open Access has been a well-established business model in Europe for years, the U.S. has historically been more cautious and hesitant to adopt it.
However, in recent years, the Open Access Network (OAN) model has experienced growth in the United States and gained momentum as telecommunications companies and investors recognize their potential benefits.
In addition to major players like AT&T (including its Gigapower joint venture with BlackRock) and T-Mobile, who have dipped their toes in the market, UTOPIA Fiber and other smaller competitive and municipal players like cities and regions are committing to open access.
The model provides a future-proof solution for communities by ensuring ownership over the infrastructure. This guarantees local control over its use and development, aligning with long-term community goals instead of the profit motives of private companies.
This model is especially effective in rural areas, where it can be challenging to attract ISPs who are willing to make big infrastructure investments. However, the economic outlook becomes more favorable if the network is built to serve multiple purposes and users. It may be difficult for a municipal company building in a rural area to find the expertise to establish its own service provider organization. In such cases, it can be attractive to collaborate with an operator that manages networks across the country and has ISP partners they can bring along or work with existing Service Providers in the service area.
Here is how an Open Access Network (OAN) is usually set up: Designed to separate the ownership and operation of network infrastructure from the services provided over that infrastructure, the setup typically involves three layers:
Infrastructure Layer (Passive Layer): This consists of the physical infrastructure, such as fiber cables and conduits, owned by a public entity, utility, or private investor.
Operations Layer (Active Layer): The network operator, who may be separate from the infrastructure owner, manages the technical operations, ensuring the network functions effectively.
Services Layer: Multiple service providers use the shared infrastructure to offer internet, voice, healthcare and other services to end-users, fostering competition and improving service offerings.
Benefits of an Open Access Network
Efficient Use of Infrastructure: Open Access Networks (OANs) avoid fiber network duplication by allowing multiple Internet Service Providers (ISPs) to share the same fiber infrastructure instead of each and every one of them having to build and maintain their own. This reduces the need for each provider to build their own network, making broadband deployment more financially viable, especially in rural or underserved areas with low subscriber density. This model allows even smaller ISPs to enter those markets.
Public-Private Partnerships: Open Access networks enable municipalities to effectively collaborate with private Internet Service Providers (ISPs). Under this model, municipalities maintain ownership of the fiber infrastructure, while private ISPs deliver different services to residents. This division of responsibilities reduces the operational burden on local governments, allowing them to focus on maintaining the physical infrastructure. Meanwhile, ISPs handle the complexities of service delivery and customer support—often complex and resource-intensive tasks. This setup streamlines operations and ensures that residents have access to more high-quality broadband services.
Addressing the Digital Divide: With federal funding (like the $42,45 billion in BEAD funding announced in 2022) targeted at expanding broadband, Open Access networks offer a model that enables equitable deployment of high-speed internet. This is especially important for closing the digital divide in areas that traditional ISPs may not prioritize.
Consumer Choice and Innovation: Open Access encourages a competitive market by allowing multiple service providers to operate on the same network. This often leads to lower costs for consumers and drives innovation as providers compete to offer better and more diverse services.
In summary, Open Access is transforming broadband expansion in the U.S. by making it more cost-effective, promoting market competition and broadening the range of available services., and ensuring that even underserved areas can benefit from high-speed internet.