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Digital Desert

The workshop on High Speed Connections at the Digital Agenda Assembly 2012 was a success. Surely if we measure succes in terms of attendance and the intensity of the debates. Perhaps one might be a bit more skeptical if we have a look at the evolution of the discussion, which is going one for the last 5 years, or if we look at the evolution of investment in high speed networks in Europe.

 

At the plenary session the next day, Ben Verwaayen, CEO of Alcatel-Lucent, warned that Europe may turn into a Digital Desert if we do not talk about the real issue. So the question is: are we focusing on the right issues to get high speed networks to be rolled out? There is a lot of discussion going on about reducing the roll out costs, by mapping and sharing fibre, by digging together and reducing red tape. A lot of hope is also put on the Connecting Europe Facility that would pump EC money in networks by grants and other financing facilities. This are all welcome initiatives, but I am worried that there is the risk that nothing is done to the regulatory framework and related soft law instruments as recommendations that in practice do not work since they were designed to open the historical copper networks rather than to address new network roll-outs.

 

Going from theory (or ideology) to a more empirical view on what happened until now, there appears to be an inverse correlation to roll out of NGA and following strictly the EC recommendations (eg France, Portugal, UK). Making abstraction of any theoretical construct, like the ladder of investment, the facts show that the concepts of cost orientation and asymmetrical regulation are not creating the adecuate conditions to support roll out. Fortunately a number of NRAs are understanding this point. Ben Verwaayen summarised it the following way: we need a clear regulatory direction and Europe should choose if it only wants to continue to focus on low consumer prices, or also on investment and innovation like is the case of the US.

 

Still there is also reason for hope from the Commission's side; Gerard de Graaf assured that the EC has a holistic policy based on competition, but also pro investment providing long term predictability. We will soon see more on the pro investment measures the Commission has in mind.

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