Sweden's Open Network Pioneer

ViaEuropa Chairman Jonas Birgersson says his open model offers consumers low prices and freedom of choice—and it could work in the U.S.

by Jennifer L. Schenker

U.S. telephone companies Verizon Communications (VZ) and AT&T (T) have convinced regulators that closed networks are not only acceptable but essential. The telecom giants want to build quick new fiber systems to deliver high-speed Internet and entertainment services into U.S. homes. But the only way to justify the billions in cost, they argue, is if rivals are prevented from having equal access to the network and offering competing media services over the same pipes.

If that is the case, asks Internet entrepreneur Jonas Birgersson, why is it Swedish carriers can offer consumers much higher speeds than those available in the U.S., for similar or lower prices—even though multiple operators share the same fiber network?

The feisty 36-year-old, who has founded four companies, including Bredbandbolaget (B2), a broadband service provider that was sold to Telenor (TEL.F) in 2005 for about $730 million, is out to prove that the open access model he is pioneering in Sweden can work in the rest of Europe and in the U.S.

Europe's Freedom of Choice

Birgersson, who made his first million at age 26, is now chairman of ViaEuropa, a Lund company that manages network services and infrastructure for 60 different Swedish cities that have their own fiber networks. (This is an obvious difference from the private-sector approach mainly used in U.S. telecommunications, but it's akin to cities owning their own sewer or transportation systems.)

ViaEuropa assumes the job (from cities) of renting out capacity to multiple Internet service providers who compete to offer services to consumers. Making the deal even more enticing, ViaEuropa employs technology from a separate Birgersson company called Labs2 (LABS.ST) that lets consumers switch from one service provider to another literally at the click of a button. Such freedom of choice means a larger selection of services available to customers and more competition among providers.

Birgersson's experience in Sweden has convinced him it's possible to build a profitable fiber business with open access. "We are on a mission to prove beyond any shadow of a doubt that what we have done in Sweden is doable in any urban area in Europe or in the U.S.," says Birgersson, a military history buff who has proved in the past to be a formidable foe to phone companies.

The Future of the Internet is Now

Now he is talking to investment banks (he won't reveal which ones) about creating a global infrastructure fund to finance his company's international expansion into cities such as London and San Francisco. Similar to the funds used to build roads or bridges, it would support construction of civic fiber networks over which a range of competing Net services could be offered.

His move to expand Sweden's fiber revolution around the world comes at a good time. A new study on the future of the Internet from the Paris-based Organization for Economic Cooperation & Development (OECD) has been prepared for a ministerial meeting in Seoul on June 17-18. The study concludes that the closed access model currently favored by regulators in the U.S. is flawed and could harm competition and the deployment of next-generation services.

The report notes the dramatic transition in phone systems around the world. Because of the rise of the Web and digital media, the 100-year-old network of copper wires strung into homes is being replaced with fiber-optic cables capable of carrying thousands of times more data. At the same time, the basic design of the network is shifting from conventional circuits to an Internet-type model.