Against a backdrop of challenging economic circumstances, 2011 saw some significant investments made by the industry – most notably in the roll of fibre and vast sums spent on spectrum for next-generation mobile broadband, even if there are still existing some uncertainties. Over the year ahead, a number of regulators will take decisions that could shape the future of the industry.
We have identified three priority areas that regulators and policymakers will need to pay particular attention to during these months ahead. To be effective, any policy must allow sufficient flexibility at a national level, as a ‘one-size-fits-all’ approach will be unlikely to succeed.
Moving at pace towards a high-speed Europe. Careful monitoring of progress against the EC’s Digital Agenda Targets will be key
Looking ahead, investment in fixed and mobile next-generation networks is likely to continue at speed despite the challenging economic conditions. It continues to be the case that no single solution exists to ensuring widespread broadband coverage. In some countries public money has successfully been used to roll out super-fast broadband, whereas in others the private sector is taking the leading role. Whilst many governments have committed to ambitious timetables for ubiquitous coverage, The European Commission’s broadband strategy aims to encourage investment in superfast broadband in Europe and is not without its own challenges. Most crucially will be designing a way for member states to measure progress against the EC’s targets and take the necessary actions to ensure they are met.
- For consumers to fully benefit from the digital economy requires well thought out public policy
The relationship between regulators and policymakers is crucial to ensuring a dynamic industry with an adequate balance between the new market players and the evolution of existing ones. Whether this is between regulators and governments or regulators and super-national bodies such as the European Commission, there are a number of challenging issues ahead. At the top of the agenda sits universal broadband access, closing the digital divide, and tackling cross-border issues such as international roaming.
Two notable cases over the past twelve months were regulator’s concerns over advertised broadband speeds and the EC’s proposals for a structural solution to voice and data roaming in Europe. It now seems unlikely the EC will move away from the structural solution on the table for roaming, but improving advertising practices around broadband speeds is something that very much remains in the hands of the industry. At the heart of any response should sit transparency – marketing that sets out exactly what is possible and what isn’t with a broadband connection. This is a powerful remedy that shouldn’t be underestimated.
- To evolve the relationship between network and content providers will require re-examining traditional models
Introducing rules to ensure net neutrality, tackling illegal peer-to-peer file sharing, and the emergence of exclusive relationships between ISPs and content creators have all made the headlines during 2011.
NRAs have been tackling these issues in different ways. Some have been proactive in defining rules and obligations, whereas the majority have so far taken a wait-and-see approach. For those in this camp, working out the details remains the challenge and some difficult decisions need to be taken in the very near future. Regulators will need to take a new approach to tackle the regulatory challenges of tomorrow and take steps to create a more sustainable Internet model. This will involve re-examining the basic principles of interconnect and end-user pricing. Ofcom in the UK recently set out a pragmatic approach to how operators can experiment with new business models whilst at the same time aiming to preserve the best efforts nature of the Internet. Others regulators would do well to follow as they set out their positions in the months ahead.
I am sure that 2012 will keep the European regulatory agenda very busy with these and other issues too!
Matthew Howett, Practice Leader, Regulation & Policy – Ovum