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Xavier Grawitz of Normandy told the D.C. audience that fiber to the home cost them $650 to deploy. Manche Numerique is a successful “public-private partnership” - one of the few – that has reached 26,000 homes and plans 40,000 more in the next phase. That's similar to Verizon's cost per home passed of less than $700 but less than the estimates by Caisse de dépôt at the same event. The difference is partly explained by high costs in extreme rural areas but I'd guess better management plays an important role.

At the same Alcatel event, Gabrielle Gauthey explained effective competition was the main driver bringing France to first place in European triple play. Dynamic new entrants encouraged France Telecom to equip all their exchanges with first ADSL and soon after ADSL2+. Local loop unbundling complemented by bitstream was the essential first step. Local authority intervention has been crucial in the expansion. They have been much more efficient than the U.S. planned 80% subsidy, garnering $1 of direct private investment for every $1 of public money. In addition, the public sector often retains ownership, sometimes with a 30 year term of company management and investment recovery. Gauthey played a major role in French rural development and then at ARCEP as France ascended to world leadership. She's now an Alcatel Vice-President, brought over to provide some perspective on how to make the stimulus work. Perhaps her most important perspective is that France realized in 2004 that deregulation and leaving everything to the private sector had failed.

The result: less expensive coverage of rural areas and expansion of national operators to meet the competition. Countries like the U.S. will not be as successful, because we effectively only have only the local cable company and telco. France instead has three companies racing to fiber Paris and other cities, as well as Numericable offering 100 megabit DOCSIS to 8M or so homes as part of a 32 euro triple play.

Perhaps Gauthey's message should have been to make the CEO of Free.fr a U.S. citizen and fund him sufficiently to take on AT&T. Short of that, I believe the simple competitive ideas are unlikely to bring U.S. triple-play prices close to the French 30 euro. Competition is great – if there are enough strong competitors.

The U.S. is very lucky because 96% is covered by cable, nearly all of which will be at 50 megabits soon even if the government does nothing. It's ridiculous to call a home with 50 megabits “underserved,” a false category invented to allow giving stimulus money to areas that don't need it but had political power. Palo Alto is queueing up despite a median family income of $153,000.

Except for the last 5-10%, the U.S. battle is over price + service. Helping the poor is a good thing, but telling Comcast and Verizon they have to lower their prices is much tougher for a politician than to give out public money. Kevin Martin had neither the power nor the courage. Friends tell me Jules will get better results. I hope so.

A little more from Ms. Gauthey. “Adequate regulation of the backbone is a crucial issue. … Mobile and fixed are complementary. The future of mobile is fixed access networks as deep as you can into the countries. Some of our developing economies will end up with a femtocell which will heavily rely on fiber networks. … Mobile cost is lower, especially in developing countries. … Competition is crucial to foster investment … Regulators have a crucial role to play to foster affordability of broadband …” from a speech in English at http://www.unctad.org/sections/meetings/audio/2009-05-26/am/1018-E.MP3