Playing bandwidth chicken with rivals
so here's what it looked like in the US:
Verizon: hey, what would happen if we replaced our copper with fiber? it's plastic/glass and lasts practically forever, the bandwidth is ace, and we can deliver as many additional services as we want, starting with IPTV. the maintenance costs would drop too...
Comcast: don't you dare! we'd have to give improvements to our monopoly customers for free, just to keep them! they're already angry about the constant price hikes (also comically bad support, no a-la-carte pricing, low and lossy broadband, shady bandwidth management, the constant endless lying, etc., etc.). our investors would lynch us!
all the other Telcos: YEAH! you tell them, Comcast!
Verizon: oh yeah? i bet your investors are more skittish than ours...
as a former Comcast, then Verizon FIOS customer, i can say that FIOS makes Comcast look like Tiscali in the UK. we have a T1 line (nothing else is available where we live now), and i SO miss FIOS.
whoever blinks first, either wins or goes bankrupt. it's one of those bets where being first could either kill you or put you in the lead, being second could make you irrelevant, and being last is guaranteed obsolescence.
the CDN is a stopgap. until the bandwidth problem is addressed, not much will change, except the volume of available content and services, which will continue to grow. it may or may not be fiber (wireless? powerline broadband? whatever...), but sooner or later, someone will have to take on this infrastructure buildout. Maybe Ofcom could ask the Japanese, they have an island, too...
sooner is better.