Market Dynamics, Regulations, and Historic Fiber Investments in Europe - Episode 536 of the Community Broadband Bits Podcast

Community Broadband Bits

This week on the podcast, Christopher is joined by Rudolf van der Berg, Partner at Stratix Consulting, a Dutch consulting firm that does work in telecommunications and has been deeply involved in the historic level of new infrastructure deployment projects in northern Europe. Rudolf breaks down what's going on today in Europe's broadband landscape, including efforts to reach the unserved, new entrants, and the actions of private equity.

Rudolf challenges the notion that overregulation stifles innovation and competition, and dispels the rhetoric (pushed by monopoly ISPs in the United States) that the European networks struggled with the onset of the pandemic because of the regulatory landscape and comparative lack of investment as compared to their ISPs' American counterparts. Christopher and Rudolf close out the show by digging into the struggle between tech companies and ISPs between which should pay for infrastructure upgrades.

This show is 41 minutes long and can be played on this page or via Apple Podcasts or the tool of your choice using this feed

Transcript below. 

We want your feedback and suggestions for the show-please e-mail us or leave a comment below.

Listen to other episodes here or view all episodes in our index. See other podcasts from the Institute for Local Self-Reliance here.

Thanks to Arne Huseby for the music. The song is Warm Duck Shuffle and is licensed under a Creative Commons Attribution (3.0) license.


Rudolph van der Berg (00:07):

Europe has regulations, but at least they're clear and, you know, under what co conditions you can roll out. We don't have franchises, we don't have monopolies locally, et cetera. Actually, we have rules to prevent Lenos.

Christopher Mitchell (00:21):

Welcome to another episode of the Community Broadband Bits podcast. I'm Christopher Mitchell at the Institute for Local Self-Reliance in St. Paul, Minnesota. Today I'm speaking with someone I've been following for, for many years. Rudolph van der Berg, who is a partner at Stratex Consulting. welcome to the show, Rudolph.

Rudolph van der Berg (00:42):

Thank you've been listening for years too. Fun.

Christopher Mitchell (00:45):

I appreciate that you, you have a, a wonderful presence on social media commenting on all things Internet and particularly Europe related. And in the Netherlands you've had a lot of insights. you're deeply involved. I think you, you're involved in setting up the Amsterdam IX, right?

Rudolph van der Berg (01:01):

Oh, no, no, no, no, no. That, that I helped establish the Dutch German Internet exchange, which is in the east of the Netherlands, which was a project from my university 20 university. We got broadband there in 19 94, 10 megabits to each two dorm room, a hundred megabits in 1998. So we had more bandwidth than almost anybody in the world. And then this guy starts, this hotel booking website becomes a bit popular and realizes that across the road from campus, Internet data is 10,000 gilders per two megabit, let's say 5K dollars per two megabit. Whereas on campus, of course, he was paying 10 euro for a hundred. And in Amsterdam it was two K for two Ambits. So it was easy for him. And he left with his firm for Amsterdam.

Christopher Mitchell (01:52):

Yes. And when

Rudolph van der Berg (01:53):

I was, which university didn't really like, of course, <laugh>,

Christopher Mitchell (01:56):

I say when I was in Amsterdam, I actually used <laugh>.

Rudolph van der Berg (02:01):

Well, it's, it's massive. just eat, also started at the university, but slightly a bit later. And by that time, the Internet exchange had helped bring prices down, well, basically to Amsterdam levels. And it still exists. It's much more of a regional and municipal thing. It has two and a half thousand firms and governments connected to it. And I do, you know, local interconnection, do municipalities work together over that network, et cetera. So it's still a stunning success.

Christopher Mitchell (02:33):

Yes. And when I think of, when I think of you though, the, one of the first things that pops into my head is statistics that I've seen from you about Amsterdam's Internet exchange and how it's changed over the years and the volume of traffic and the value of IXs and things like that.

Rudolph van der Berg (02:47):

Yeah, it's, it's one of those things that wasn't really recognized by a lot of people also in public policy, because, you know, I have a background in public administration, public policy just had a lot of the wrong friends in university. So they managed the campus network and needed the guy to do policy. And that's where I came in. And then after the Internet exchange, I went to work for the Ministry of Economic Affairs. In 2006, I wrote a paper for the O E C D on the future of fiber networks. And now I was very much involved with broadband and how we should get it everywhere, and also with how Internet exchanges worked and how that affected net neutrality and how you could build efficient networks. And it's now 2023, and I'm still doing that kind of stuff. So yeah, basically my career now.

Christopher Mitchell (03:33):

And you're someone who worked at the O E C D in tracking US based networks. So as we're talking about this, you would definitely have a sense of similarities and differences. I did wanna start by asking you to tell us a little bit about the state of fiber in the Netherlands and then more largely in, in Europe.

Rudolph van der Berg (03:51):

Well, we, we started building out the first fiber networks like in 2002, 2003, but first ramp up quite nicely. But kpn, our local incumbent, got involved in a joint venture that was really building out fast that basically stalled rollout by almost 10 years.

Christopher Mitchell (04:09):

And so when you say kpm, people should hear at and t basically?

Rudolph van der Berg (04:13):

Yes. Basically that's Dutch Telecom, Royal Dutch Telecom, PTT Traditional. I like him in, in some ways there that the incumbent who does the right thing after it has exhausted all other options, but at least it generally does the right thing. So, you know, for a while it was very focused on DSL and then realized that it lost the war to our version of Comcast, which is the phone. Cable in the Netherland has 98% coverage because municipalities build it. And public housing corporations were involved in rollout of cable tv. They didn't like the nasty antennas on people's roofs. So everybody has cable except in the more rural areas.

Christopher Mitchell (05:02):

But at 98% it's really the most rural areas. <laugh>.

Rudolph van der Berg (05:06):

Yeah. And rural, of course, in the Netherlands is not completely like rural in the us but you know, we're a small country only 200 miles by a hundred miles. So it's not that big 18 million people, so quite densely populated. But because we have a strong competition between cable and D S L and fiber, it became very clear that people prefer cable over D S L. And in areas where KPN doesn't have fiber, it has 35% market share, sometimes less, and cable is 66% or something. In areas where there's fiber, it's 50 50 or more towards fiber. And of course, ESL is dead. And well, in some areas where the municipality ran, still ran the cable company, like where my parents live, way up north in Freeland, near the Frisian cows, the local municipalities ran the cable firm and decided, well, we'll just do F T T H.


And there they have like 90% market share for the local F T T H, which is which is fun. So at this moment 5 million people have F T T H homes passed. There's 3 million homes to go, and there's roughly funding for 4 million homes. Well, that works out pretty well, <laugh>. Yep. So there are three major firms rolling out kpm, open Dutch Fiber, which says it's Op Running Open Network, which is a private equity together with the pension fund of Deutsche Telekom. Mm-hmm. <affirmative>. And they're a lot, quite fast as well. And then there's Delta, which used to be a cable company in one province, the province of sale, which is like all islands connected together. And they weren't that interested basically at first in F T T H but this was a private equity fund who had bought an ailing cable network from the, the province, the state.


They then got involved in Dutch cable and <inaudible> home and realized, now wait a minute, there's money to be made here. And they bought a, another cable firm basically, who had gone ft t h. And so the returns these guys were making, because, well, 70, 80% market share was quite well possible if you did it well. They started to move further and then it got more interested because there was also this fiber to the farm project. And she also mentioned in, in the other pro podcast, and I think it triggered on it, my farm was involved as well. We tried to get fiber to the farm, but that was like two and a half, 3000, 5,000 euro extra per farm. And you know, how do you get that financed? But it turns out that most farms are, of course, businesses and people living outside of town so often had a business of the earth.


And these businesses were like, but I need fiber because I have 200 kilobits of dsl or even less. I can't run a milk robot like that or whatever. I need to run my farm. What do you mean 5K or three K or whatever? I'll pay you from my investment money deducted from my taxes. Mm-hmm. <affirmative>, and you better hurry. So they had made this entire business case, my phone was involved with the bank, the local cooperative Apple Bank, which does a lot of the farms they had got secured the funding and loans, you know, convinced everybody. And then it turned out 80 90% of the people paid that three to 5,000 euro upfront instead of over 10 years, like everybody expected. And so the only one who was upset was the bank manager <laugh>, because he'd gone through all that effort securing the loan, and his people paid the loan off in the first month. Sure, thank you. We don't need your money anymore.

Christopher Mitchell (08:57):

Right. That's funny.

Rudolph van der Berg (08:59):

And well, private equity funds being what they are, they were like, now wait a minute, we can pull that trick in other place.

Christopher Mitchell (09:07):


Rudolph van der Berg (09:08):

And then they started, and well, there was even one profit Sue, the, the same cable term that helps my pa deserves, my parents was tasked with doing rural areas, which were supposed to be too expensive. When the private equity guys realized what kind of money there was, all of a sudden a lot of rural areas became profitable. So these guys had looked at the most profitable rural areas where they could start for the preference with subsidies only to find it. What, when they basically wanted to start that, the delta people were going like, but we wanna roll out. The province, of course was like, okay, well that saves a lot of money. Sure. But this local firm on by the municipalities was like, yeah, but we just put it all that money into engineering, et cetera, you know, in designing. But you know, that province is doing really well and is now doing the last 600 really expensive farms, which is going quite well. So, so we really have a good situation at the moment with lots of fiber rolling out.

Christopher Mitchell (10:10):

It does sound like the, the market dynamic is leading to a lot of investment and I, I'm curious about that. a kind of the business case seems so good. I'm kind of surprised because one of the things we take for granted here is that Europe is so overregulated that it's hard to have a business case. And it seems surprising to me that there is such a good business case there and that there isn't a concern about the level of regulation making the investment more risky or something like that.

Rudolph van der Berg (10:45):

That's complete nonsense. Europe has regulations, but at least they're clear and, you know, under what co conditions you can roll out. We don't have franchises, we don't have monopolies locally, et cetera. Actually, we have rules to prevent monopolies. Each country is different. But in my country, in the Netherlands, if you wanna roll out a network, you don't need a permit per se. The government has to allow you, they can charge you certain fees for the work they need to do. They can charge you for repaving and similar things. But even private landowners can't block you from rolling out a public network. So fundamentally, you have to allow somebody to roll out a network. I also a program manager for the Dutch Association of Municipalities. One of the things we actually now do is information sharing between municipalities and how you keep everything orderly and nice so that you know when repaving is done, it's done correctly. So one of the tricks we tell people is, because it's such a massive project, you get almost too much money for the ality because it's too many meters. And normally you pay by the meter or something like that. You can tell the telco that he can get some of the money back as a discount so that he can reach more homes and it becomes better to reach certain rural homes. But only after that the project has finished. So under the condition that it's done correctly in according to spec and the repaving is done correctly,

Christopher Mitchell (12:20):

In effect a municipality might set its rates based on an assumption of someone extending, doing some modest line extensions. But if it's looking at a very significant investment at that point, the costs are, are large enough that the city could forego some of those in return for public policy goals and making sure there's good restoration and all that.

Rudolph van der Berg (12:41):

Yep. And you know, this is the biggest rollout of infrastructure in our country since the rollout of natural gas network. And certainly in the amount of lines in the amount of time, it's massive and there's really a gold rush. So they're fighting, the telcos are now suing each other in municipalities over, well, I got there first. So you can't let them. But the rules say that in base, the principle, everybody can roll out and you can't, as a municipality block one in favor of the other. You can say, well, there needs to be some digging rest, as we call it, for a certain amount of time. You know, if you have one guy digging up the city center one week and the other guy comes the next month, yeah. Citizens won't be happy.

Christopher Mitchell (13:35):

I assume that there's a lot of joint trench requirements too. do you see that frequently?

Rudolph van der Berg (13:41):

Oh, municipalities try to get them to jointly trench Telcos hate that. Yes.

Christopher Mitchell (13:47):


Rudolph van der Berg (13:47):

Don't wanna, I cooperate.

Christopher Mitchell (13:48):

Yeah. And to be fair, it is difficult to cooperate and from what I can tell,

Rudolph van der Berg (13:53):

Yes, no, maybe

Christopher Mitchell (13:55):


Rudolph van der Berg (13:56):

But yeah, at this moment they wanna roll out so fast and they don't want to be impeded by the, by the next guy that they prefer to roll out themselves.

Christopher Mitchell (14:05):

You speak of this, and, and I do feel like, and I'm not gonna come back to this over and over again, but the conventional wisdom in the United States is that if there are open requirements on a physical network, which I believe you does the Netherlands require open access to other providers? You don't.

Rudolph van der Berg (14:23):

N not anymore. We used to have that for KPN or incumbent Telco. KPN still has a followed theory open provision because it actually sells a lot through other telco as well. Open Dutch fiber says it has an open offer. Delta was closed because, well, it used to be a cable company basically, but it recently announced that it would allow like five or 10 other operators. And they all also go like, well, if the other guy opens up, then I will open up to him as well. And they all say, well, it should be better if we just roll out once, but then actually cooperating is a bit hard. But yeah, they, they do cooperate sometimes. And it also depends on the country. Cuz in the Netherlands, if it's funded with public money, like some rural parts there is generally a requirement for openness, but those are not that many places at 60 KPN currently charges like 18 to 23 euro per line for open access, and then another one Euro 23 for six megabits of traffic, and then a whole bunch of other costs, of course, here and there for access to pops and stuff.


Average price between 50 and 70 euro a month for the full broadband package with tv. And you know, that's a gigabit between 200 megabits in a gigabit and some early trials with 10 gig xts pump.

Christopher Mitchell (15:50):

When you're quoting those prices, those seem a bit higher than what I've heard elsewhere. for like, for instance, obviously I think free in France and I, my information could be out of date was much lower, but I think their speeds were often a lot lower than advertised. Is that, is that right? What is the difference between being on a euro on a, on a fiber network in the Netherlands like the delta on Delta versus being on a, a fiber network elsewhere in Europe? Is it pretty similar?

Rudolph van der Berg (16:20):

Yeah, the fiber networks are generally quite similar. It really depends on the country. So some countries are really advanced. Sweden, Norway, Denmark have done really well with fiber. Bitland a bit less, does a lot more mobile, also fixed wireless access. But they do use 50 gigs per sim card per month. So, you know, they really rank it in the top. France was really a lot of dsl, but has put in a 10 year plan by the government in 2012 to bring fiber to all rural areas, in part because they've been really late with telephony rolling it out. So they had the longest loop lengths of anywhere in Europe.

Christopher Mitchell (17:04):


Rudolph van der Berg (17:05):

Which was no problem until somebody invented dsl. Right. And then they were like mad

Christopher Mitchell (17:12):

Well, that I talked with a, with a French regulator, oh, it must have been more than 10 years ago. And I was speaking with them and I said, what about the most rural parts of France? And he looked at me and he said, yeah, we're not, we're not even thinking about that <laugh>. They were just writing it off at that point.

Rudolph van der Berg (17:26):

Now they all have fiber. They had a 10 year plan, which will be done next year. And basically all rural areas should be done roughly almost by then. And it's really a massive train that goes through the country. I heard from one guy who had a holiday home in a village of 300 people somewhere. And he said, well, one day a a crew shows up and at the end of the week, all of a sudden we all had fiber <laugh> and it worked <laugh>. And then the crew is gone. And prices in France are 35 to 45 euro these days, and then you get anywhere up to 10 gig.

Christopher Mitchell (18:08):

So let's, that's, that's maybe, maybe my information is quite dated, but I had thought that one of the ways that Free had kept their costs so low was that they ran their exchange points pretty congested.

Rudolph van der Berg (18:20):

That, that that's not necessarily the thing. They were a bit dumb with their interconnection. Like most French operators, France was the country that had more Internet exchange points in Paris than any other European country had in its capital <laugh>. Everybody started their own Internet exchange point instead of cooperating. Okay. It wasn't until France IX started with some people that have grown to know. Yeah. Those were basically none of the incumbent French telcos. They have like four or five incumbent telcos and yeah, they still have difficulties with interconnection, but on the other hand, they do have enough bandwidth, way more than enough bandwidth on their networks. Yeah. You can actually reach that a gigabit if you want to. And French operators do have to post what your real world speed will be as well.

Christopher Mitchell (19:10):

That's remarkable. In the United States, we're told that's impossible to know and you could couldn't possibly public post it publicly

Rudolph van der Berg (19:16):

<laugh>, but on on dsl it was horrible. Yeah. I lived in Paris, but I lived on the seventh floor and well, my DSL would be anywhere between 15 and 75 megabits and sometimes it needed topo from the DSL modem to retrain it to anything that worked. Sure. So fr France actually now has, has a problem the medium sized cities because that's left to the incumbent firms mm-hmm. <affirmative> and they weren't as fast as the government in path also because the government basically had all the construction crews working to do all the rural areas. But yeah, so the joke in Francis, now that the major cities have ftt h the rural areas have ftt h if you live in a middle size, then your mileage may vary. Yeah. Either countries in Europe, Spain, 80, 90% fiber, massive work Italy tries but can't really get it going. Greece really hard Eastern Europe very far generally with, with fiber and other networks. Belgium hardly any fiber, but 98% capable, so not too bad. And then Germany, a bit of a developing nation when it comes to fiber and mobile broadband and stuff. If you drive out of a major German city, you are Spotify major split, no coverage.

Christopher Mitchell (20:42):

Mm-hmm. <affirmative>,

Rudolph van der Berg (20:43):

If you're outside of town in a German city or town, you may not have broadband. And you know, through the years I've spoken to firms with four or 500 people, employees who have a location outside of town and difficulty getting fiber there. Wow. And you just go like, come on. But even in Germany, it's now moving. Doche Telecom is really proud that they now had 2 million FTT H connections new this year, but almost every city, major city had had its own local government owned network. They did a lot of fiber. So those areas, and then some Dutch people who started the same network in the Netherlands went to Germany and started, but Glass Pfizer, which was quite successful, gust ignored them for a while and they were bought by kkr, private equity. And yeah, there's quite a bit of money flowing into that as well. Mm-hmm. <affirmative>, but Germany is the Staal word.

Christopher Mitchell (21:40):

So one of the things that that is, is pretty clear is that to speak of Europe is, is is not helpful <laugh> in this space?

Rudolph van der Berg (21:49):

No, not, not just like, it's difficult to speak of the United States. It can defer between neighborhoods. Well, in, in Europe it's generally it can defer between countries. It's not like really local, but yeah. Between countries there's huge differences.

Christopher Mitchell (22:06):

Nonetheless, one of the things that continues to be repeated despite having been frequently debunked in the tech press and and elsewhere is a claim that European networks really struggled during the Covid 19 lockdowns. and that's one assertion. And then the second one is that that was a problem that's caused by burdensome network neutrality rules. So if we attack that first across European networks, were there any that really struggled during the Covid 19 lockdowns?

Rudolph van der Berg (22:39):

no. Yes. Maybe in some places, like some parts of Italy people were complaining, but that was basically because they had D S L and it was already rubbish before Covid. This was literally enough. Commissioner Bto ex Oren, c e o, who is very enamored by some net anti net neutrality ideas. He was the guy who called for this. The only one who seemed to have had a bit of a problem was nor Telekom, but that's a very specific thing to them. They were in even able to give German university students video conferencing. And whereas every other European German I S P would set up private network interconnects and, you know, a hundred gig or something to connect. And the German universities had over one, the bit of connectivity. George Telecom was the one who had 20% packet loss. And only when the German universities decided to pay and cave in and buy transit from Deutsche telethon, which they didn't need, and which was more expensive than a normal transit, that's when bits started to flow.


And, you know, that was like a hundred gig. So it's not like that was real traffic or anything, it was just, you know, it's the biggest incumbent. It's the at and t and all the students are at home, but they had back at loss in their interconnect, not on their network, but in their interconnect in in the rest. Our biggest problem in the Netherlands was not students who needed to go to McDonald's. We didn't have that issue at all. It was larger families, 2, 3, 4 kids, particularly poorer ones who didn't have a laptop at home or enough laptops. So that was actually a policy thing for many municipalities. Where do we get the laptops for some of the kids? Well, that was fixed with the subsidy here and there, but traffic just wasn't an issue. Never was.

Christopher Mitchell (24:38):

And so to be, to be clear, cuz you make the comment about McDonald's the, the juxtaposition is that the, from your point of view, the Netherlands policy was vastly superior to that of the United States where particularly people who have made this claim, Senator Thune among them prefer to see no government intervention. And and it seems that having an appropriate level of government intervention has led to the Netherlands being well suited to being able to handle that that challenge.

Rudolph van der Berg (25:12):

Yeah. And, and, and so most European countries, and we have Competi competition, so our, our rates are lower, so it's easier for families to actually afford it. You know, Germany is the most expensive country, I think in, in Europe for broadband pricing. And even there it's like 18 point 90 euro. So you know, that's a hundred dollars R roughly. But, and that includes V A T and local taxes and stuff because in most of Europe you're not allowed to sell anything without V a T added in all taxes included. So it's not like the magic bill. You guys get any United States where it says one thing on the sticker and a whole different thing at the end of the month.

Christopher Mitchell (25:53):

Nonetheless, there, there is obviously tremendous progress in in many European nations to getting close to that a hundred percent build out of, of high quality access if not fiber in, in some cases. and yet there is this discussion which seems to come up from time to time that the tech companies need to pay the telecom companies to improve and, and to build these new networks. Where where are these claims coming from before we actually deal with any of the, any of the merit to them?

Rudolph van der Berg (26:28):

well, the usual suspect telephone deutsche tele com, orange and photo. Well, in this case, they found Tito the former CEO of Orange, a willing spokesperson. We've had these claims. Well, basically ever since 1996, I found O E C D documents where people were claiming this the same head of regulatory of Torturer Telecom set this thing in 2001 at an O E C D meeting in 1996. in 2006, we had the T S M A in 2011, the same firms did an I U proposal and I organized the Barack O E C D meetings on IP interconnection where I brought the peering managers of Europe together with the regulators for basically the first time a FCC was there as well. And it was like, oh wait, this works completely different than our incumbent telco told us. Yes. And it's a bit weird because basically it's only these firms who really are difficult to interconnect with and pair with. Most other countries have very well running Internet exchange points where lots of the local ISPs and non-incumbents happily interconnect. Even some incumbents like British Telecom is very good at interconnecting, has net caius for everything pairs with everybody. It, it's a very big difference sometimes most between the techy people and the people doing marketing and regulatory affairs. It's, it, it's magic. Well,

Christopher Mitchell (27:56):

You might, you one might assume if, if one was sort of economic a and an academic and economics who had no understanding of how this, you might assume that the companies that were most desiring to have tech companies paying for the upgrades would probably be the smaller companies who are more capital constrained. But it sounds like you're saying it's the, it's the companies that have the most access to capital who are crying about wanting others to invest in their networks for them.

Rudolph van der Berg (28:27):

Yes. And those are the dominant firms who sometimes like Telephonica have rule that 80, 90% of the country with FTT H already, or like Orange who publicly says, well, you know, we have reduced our CapEx because we're group basically done.

Christopher Mitchell (28:45):

Sure. So this is just a cash grab. It's not even, they're not even really trying to do anything.

Rudolph van der Berg (28:50):

Well for Deutsche Telekom, at least you can say, well you, they still need to upgrade because they were like, they started basically two years ago and they have the largest country in Europe to go. So yes, they were late and on the wrong market circumstances, but many of them started when cash was cheap. So and also traffic-wise, you know, there's no reason for, for it. it was well-researched by Barrett the previous time. Traffic doesn't cost that much weirdly enough. You say economists? Well, economists are actually part of the problem here.

Christopher Mitchell (29:27):

I say that frequently actually, <laugh>,

Rudolph van der Berg (29:30):

Because economists generally don't understand anything of networking or telecommunications or what traffic costs. And so you see the wildest claims like, well, we need to build these networks because traffic is exponentially growing. Yes. Well, everything is exponentially growing, even my belly sometimes, but you know, what's the exponent? It has used to be like maybe 50%, but these days we're talking about 20% traffic growth. That's even what Deutsche Telecom says. Mm-hmm. <affirmative>, even though Teleco tells the regulator, we didn't have any trouble with traffic during Covid. And so 20% traffic growth. And a nice thing is that Dutch KPM did a wholesale offer. So it also mentioned how much traffic you would get for that. And it was like, well, average traffic is now 3.87 megabits per connection and we give you 21% growth, so we'll just make a five so that there's a bit of space and five.


So now as of 1st of January at sixth mega, but there, which is still madness that you actually need to pay for it because it doesn't feature in their own business case, of course, because they all rollout ftt H 10 gigabit xgs pump. So really it's not the traffic. Mm-hmm. <affirmative>, we have weird situations. Look, you know, the head of FR France telecom oranges, broadband going like, well, you know, all that traffic, we can't handle it. Then he make a simple calculation of how much traffic he does with, you know, the customers that he has. There's 30 million households in France, 6 million. So that would be like 180 tebet officially. They do like 40 tebet of interconnection according to the regulator. And this man is promoting on an, in a Nokia website, a router that those 230 tebet of capacity. So basically he's promoting one route that could handle the entire country of France, all Internet traffic through a single box, which of course you wouldn't build and design like that,

Christopher Mitchell (31:38):


Rudolph van der Berg (31:39):

By 16 of those, put 'em in four locations and then four by four or or two by two redundancy. For a country like France, you should be able to handle a bit of traffic here and there.

Christopher Mitchell (31:51):

Well, and I, one of the things that I enjoyed in your interview I was looking up, it's Internet lab by information labs, which I'm enjoying catching up on some of their back episodes. I hadn't heard that podcast before. is that a lot of the traffic, the the top traffic tra trafficker, I guess in many of these countries is not Google, it's not Facebook, it's not the big tech companies. what, what is it, what you were pointing out is I think in what caught my eye was in Italy it was like Juventus and other city A teams, right? It's

Rudolph van der Berg (32:26):

Football and, and you know, the proper football that you play with football.

Christopher Mitchell (32:30):

Yes, yes. <laugh>, what we call soccer, which had been called I believe association football back in the day. So

Rudolph van der Berg (32:38):

Football in several countries like Spain and Italy is now exclusive to over the top Internet and people use it massively. And so the Internet exchange points are reporting peak after peak because of sports. In my country, it's Formula one racing and champion starts and everybody watches it, and that causes actual traffic peaks on networks. We're talking for a company like KP Animat quick calculation was like one for like two and a half therape, four or 4 million customers, so that's like 600 kilobits. And there was this, there's this really nice small Dutch cable company, s a fe do they have like 11,000 customers? They have everybody. They have 93% market share or something like that. So they are a really good example and they published their data statistics. It's just available on their website. You can just go there now and see it live. It's potato country.


There's nothing there other than, you know, normal people. They do 33, 37 gigabits when there's a formula one at 9:00 PM at 90 or so peak on peak on peak normal traffic, 26, 27 gigabits. Of course they, they, they still have TV on a separate wavelength, so they still do normal cable tv, so that's a bit less, but you know mm-hmm. <affirmative>, if you do IP TV on top five six, you should be fine. And that's just actual normal use. So yeah, Netflix is a load, but at this moment it's sports that you need to design for. And even then there's this Dutch, smaller Dutch issp who was like OE f1, that's all coming from aw w s and, and similar things. So let's call the nice people at AW w s and see if we can get an interconnect upgrade, because at this moment it's two times 10. So it was like, can we get four times 10? The response was, no, no, no, no, we don't do 10 anymore at AWS <laugh> you can get two times a hundred

Christopher Mitchell (34:59):


Rudolph van der Berg (35:00):

And I was peering, it didn't cost either party anything. So they said, well, the rest of my customers didn't mind either that I have two times 100, you know, his business customers, et cetera. It's not like he really was peaking that high, but hell yeah. He can handle a, a bit of growth for the coming years.

Christopher Mitchell (35:19):

And so I, the answer is, this isn't a problem when you build the right infrastructure. and, and not only that, and people, the people behind the scenes, the technical people are doing the right work of working out the peering arrangements correctly. There's just not a problem and there's not one on the horizon.

Rudolph van der Berg (35:34):

Exactly. Even the people from S K V thing [inaudible] don't even bother with peering because they have two times 40 gigabits. So they do 33 now peak. And they were like, yeah, but if we go Internet exchange and peering, that's actually work. So we just bought transit and the costs of it, even with what KPN would charge, like it's one euro 2046 megabits that they charge their ISBs. If you take that into a business case and you make 45 to 55 euro a month from a household, it's just worth it. And of course, reality is the Netherland says the lowest prices for transit in Europe, basically because we're very well interconnected. It's 4 cents per megabit or something if you do it in Amsterdam mm-hmm. <affirmative>, and that's transit. So you hope to appear like 70%, 80%. It's just not a problem, except if you need traffic to Deutsche Teleco because that's 80 cents per megabit. Those are the weird ones. Those are the problem. Actually, this whole idea that we need payment from content providers is madness. And BT actually provided a lot of the statistics that they use to show that it's madness because traffic growth wasn't that much, not even during Covid, it was more during the day.

Christopher Mitchell (36:52):

Right. It was a, it was a different peak, right? I mean, it was often not even as high as the evening peak, but it was

Rudolph van der Berg (36:58):

Just, it was more stretched out over the day. Right. So more bites during the day, but the evening peak wasn't a lot more in the, in the years after the evening peak didn't grow as fast. Even our incumbent telcos don't really know how to lie about it sometimes. And they write a blog post, George Taylor come did like, yes, YouTube is 350 terabyte per day on our mobile network. That's unsustainable, but they have 53 million sim cards, so that's like seven megabyte per simcar per day <laugh>. So I joke that that would be only unsustainable if they actually used five floppy disks to send it to their customers <laugh>. And that's also the magnet of this whole debate. Why are we having this debate? There just is no logic behind it. There's a bunch of academic papers that make all kinds of wild claims, but no real hard data.


They had a consultant report that said they, the OTTs needed to pay like 30 billion a year, 30 35. And then the French Telecom Federation came with a number of, for France alone, it was 2 billion a year. And then when they was like, now wait a minute, how much is that per household? It turns out that the French say it's five euro per household per month, but the European Association says it's 15 euro mm-hmm. <affirmative> per household per month for all of Europe. So, so, so how, how are these French guys doing it at a third of the price

Christopher Mitchell (38:32):


Rudolph van der Berg (38:33):

As all the other ones.

Christopher Mitchell (38:35):

Right. They just made up the wrong number. <laugh>.

Rudolph van der Berg (38:39):

Yeah. Yeah. There, there's just no logic and, and and proportion behind it. And yeah. And that makes it even more sad for those areas that don't get fiber yet because a lot of time and effort is wasted. There are a lot of possibilities because we can now do more state aid. It's, you know, the basic rate is now a hundred megabit symmetrical basically, that you need to get everywhere. The Netherlands has gone for a gigabit trying to get the last 20,000 really difficult locations on a gigabit. That's the kind of stuff that we're working on in Europe. That should be possible.

Christopher Mitchell (39:18):

Yeah. That's a good place to wrap it up. where, where you're heading in the future. I'm, I'm a bit jealous and I'm glad that that you're out there doing this and hopefully someday we will learn something from your work <laugh>. So thank you for your time today and thank you for, for all your work over the years and, and a wonderful social media presence sharing these different observations over the course of the day.

Rudolph van der Berg (39:42):

Awesome. Thank you.

Ry (39:43):

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