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To regulate or not to regulate, that is the question. Or perhaps it isn’t?

Probably “To regulate or not to regulate?” is not the right question when one is considering policy options to boost broadband development in Europe, development meaning roll out of networks and take up of services by citizens. The question is of course “What to regulate and how?”. This was again the main topic of several events last week in Brussels, in the context of the proposal from the European Commission for a Regulation to complete the Telecoms Single Market. In the meanwhile the European Parliament’s policy department makes efforts to bring evidence to the political debate. This evidence is mainly based on from external expertise, as Fabrizio Porrino explained at a presentation of the latest commissioned study by the ITRE committee: 'Entertainment x.0 to boost broadband deployment' .

 

The study mainly analyses the current status of broadband development in Europe, based on data available from many sources and proposes some policy recommendations. One of the authors, Ilsa Godlovitch of WIK Consulting, observed that broadband development in Europe is not as dramatic as the Commissioner Neelie Kroes claims. Take up of broadband in the EU is higher than the OECD average and European customers benefit from low access prices. But Europe lags behind in fibre/FTTP deployment and take-up. Why is that? The study refers to a myriad of factors; ownership, infrastructure competition, state aid, duct access, strong access regulation, etc. … and concludes that regulation is not necessary the most significant factor affecting roll out! Or as Tommaso Valletti, Imperial College, puts it “The chain of causation is uncertain”, referring to the “falling behind” of Europe, in terms of fibre network roll out and market valuation of the fixed telco players. Interesting I think, so perhaps policy makers should focus on right questions and areas and leave investment to the sector by deregulating the assets that need the investment (fixed and mobile access networks and spectrum), instead of trying to shape a specific outcome of the infrastructure landscape in a particular market. What are those other policy areas? The WIK study gives us some hints: there should be more focus on demand stimulation measures. Usage of the broadband connection does not seem as reliant on speed as expected but appears to be more related to content (video) than to available speed. So policy makers rather should have a closer look at demand side drivers and related policies; copyright, access to content, DRM interoperability, must carry rules and smart TV.

 

Tommaso Valletti was also sceptical about the meaning of “Single market” in the Telecom Single Market proposals, as these markets are very local geographic markets, but he recognised that “Single market” sounds politically good. In the meanwhile several other key legislative initiatives are under negotiation currently and the approval of those pending dossiers would surely help towards the achievement of the Digital Single Market, and not only the Telecom Single Market. Just to mention a few: the proposal for the regulation on cost reduction for broadband roll out, and the proposal for a directive on network and information security. On the topic of cost reduction for broadband roll out, MEP Edit Herczog warned the member states that the excuse of subsidiarity is not a reason to delay the dossier on cost reduction with the following remarkable expression: “Subsidiarity against progress is provincialism.”

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Chema Alonso

Chief Data Officer, Telefonica.