It’s fairly easy to understand the concept of open-access. This is where somebody owns a fiber network and allows other ISPs to use the network to compete for customers. The most common owners of open-access networks have been owned by local governments, although SiFi Networks, a commercial entity, has built and is operating several open-access networks.

The open-access dynamics have been similar everywhere. The network owner makes the big investment in the network and sells individual connections to ISPs. This is an interesting operating model for an ISP because it doesn’t have to make any significant capital outlays to be able to provide gigabit bandwidth over a fiber network. In the traditional open-access model, the network owner not only owns the fiber, but also the electronics needed to reach customers. The network owner maintains the network and is responsible for repairs and periodic electronics upgrades. The ISPs sell and provide service to customers.

The traditional open-access model has mostly attracted local and relatively small ISPs. The appeal of the model for ISPs is that they don’t have to make a big capital investment to gain paying customers. If there is any downside to the traditional open-access model, it’s that having multiple ISPs tends to force down consumer prices and pushes down margins. Traditional open-access also requires a different marketing pitch because every ISP is using the identical technology – the value proposition from an ISP has to be based on price and service.

But there are new models related to open-access that don’t fit the traditional open-access model. Consider the West Des Moines conduit model. The city is building empty conduit to reach every home and business in the city. ISPs that want to use the network have to make a significant investment by pulling fiber throughout the city and also providing the electronics. The conduit model is not going to attract undercapitalized ISPs since an ISP has to make a significant investment to reach customers. So far, the City has attracted Google Fiber and Mediacom, and the City is hoping for more ISP tenants.

It’s hard to describe this as open-access. Instead of getting a dozen or more small ISPs on the fiber network, West Des Moines has attracted two large ISPs so far. That’s not meant as a negative, because the West Des Moines model is already bringing more competition using fiber than if the City had decided to become an ISP or if the City had entered into a more traditional public-private partnership with a single ISP. Bringing two or three large ISPs to compete in a city seems like a big upside.

I’m just speculating, but my guess is that a market that draws a handful of large ISPs is probably not going to bring a lot of price competition. I would be surprised if Google Fiber or the other ISPs interested in this model will lower their prices due to the presence of a few other large ISPs in the market. In West Des Moines, the ISPs aren’t sharing a network since each ISP brings its own unique set of electronics and associated features – although everybody will have fast speeds.

Another new model that I see a lot of cities contemplating is best described as dark fiber leasing. In this scenario, a city builds fiber everywhere and leases unlit fiber to ISPs. This model requires an ISP to provide end-to-end electronics. which is a far smaller investment than requiring an ISP to pull fiber through city-owned conduit. There are hundreds of cities doing this already on a small scale, but I can’t think of a larger city that has tried this everywhere yet. But I won’t be surprised if somebody tries this.  I also have a hard time calling this open-access since there would likely not be the capacity to offer this citywide to more than a few ISPs.

But maybe these are open-access, and I’m just getting hung up on the labels. Perhaps the easiest names for these operating models are open-access conduit and open-access dark fiber. It just makes it harder to talk to policymakers and politicians about open-access if it covers such a wide range of business models.