September 19, 2008

EU invites industry comment on next gen broadband

Former monopolies complain EU regulation may hinder rollout

By Paul Meller

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The European Commission invited the telecommunications industry to comment on its plans to encourage the creation of high-speed networks, sparking swift criticism from both sides in the debate.

The aim is to give enough incentive to operators to build new fibre-optic networks to replace existing infrastructure, which is mostly made of copper wire, while ensuring that the network operators don't freeze out rivals that want to compete in offering services across the networks.

The former state telecommunications monopolies complain that the Commission's regulatory approach may hinder the rollout of fibre networks, while the competitors complain that the proposed approach doesn't go far enough to ensure them access to networks being built by the incumbents.

The objective of a common regulatory framework for NGA is "to foster a consistent treatment of operators in the EU and thereby ensure the necessary regulatory predictability to invest," the Commission said in a statement.

"The deployment of new fibre networks will shape the competitive conditions of the future. We need an appropriate framework to give European companies fair access to the new networks. We want national rules that will not only encourage the necessary substantial investment in fibre investment but also strengthen broadband competition," said Neelie Kroes, the competition commissioner.

"For consumers, whether private or business, to benefit from the competitive provision of services over optical fibre, it is vital that the Commission provides the regulatory guidance the market needs," said Viviane Reding, the telecommunications commissioner. The commissioners are jointly promoting the initiative.

The Commission's draft set of principles suggest definitions for harmonized categories of regulated high-speed services across the EU. It proposes the sorts of access conditions the owner of a high-speed network can impose on rival operators, rates of return and appropriate risk premiums network owners can charge.

lsa Godlovitch, regulatory affairs director of ECTA, said evidence shows that in the current climate Europe will be hard pressed to support one fibre access line for some customers let alone many.

"We need a very clear signal from the Commission on open access to fibre networks. Otherwise we risk no competition at all or unprofitable investments in duplicate infrastructure that could cripple the sector," she said.

Godlovitch added: "We fear that the Commission's recommendation, in its current form, will not do enough to close the gap between countries which are committed to open access and competition and those which are protecting dominant firms."

The former monopolies mostly took the opposite view. "Considering that Europe is currently lagging behind other regions in fibre deployment and that investment effort is slowing down, the key focus of the recommendation should be on how to boost risky investment by all operators and accelerate network deployment. In its current form it may risks delaying further the NGA deployment to the detriment of consumers," said Michael Bartholomew, director of the association of European Telecoms Network Operators (ETNO), which ranks many of Europe's biggest former public telecommunications monopolies among its members.

British former public monopoly, BT, has distanced itself from most other incumbent operators by claiming to champion open competition. In a statement it said it would submit comments in the consultation that "will reflect our support for competition and customer choice throughout the E.U."

The public consultation closes on 14 November . The Commission will finalize the text after considering the replies it gets, and hopes to formally adopt the regulatory principals next year.

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