Policy towards competition in high-speed broadband in Europe
Competition will be a key driver of the extensive deployment of high-speed broadband in Europe, but policymakers can and should do more to prioritise genuine competition in both retail and wholesale markets. This is one of the key findings of a new CERRE report, which makes a number of recommendations to decision-makers to better deliver a crucial element of Europe’s Digital Single Market.
The European Commission’s strategy ‘Connectivity for a European Gigabit Society’ sets a number of ambitious objectives for delivering high capacity networks to European businesses and households. The CERRE report, authored by Richard Feasey (University College London) and Professor Martin Cave (Imperial College London), finds that European policy-makers have yet to address two important issues:
- Competition will not deliver high-speed broadband of the same quality to everyone in Europe. Europe must decide if a uniform pan-European high-speed broadband capability is either achievable or desirable given the billions of euros of public subsidy that would likely be required to achieve it;
- Whatever happens, the next decade will see much higher levels of public subsidy of broadband network infrastructure than in the past. Policymakers must ensure that the European taxpayer obtains value for money and that there is competition for these funds.
To deliver this value for money, the report makes a number of specific recommendations for improving European competition policy in the sector:
- The ‘unbundling’ model, which has been employed to promote competition since 2002, must be adapted to the high-speed broadband era, including in some cases significant simplifications;
- Regulators should encourage the development of genuinely competitive wholesale broadband markets as well as additional network entry;
- The European Commission should be bolder in ensuring that regulators withdraw altogether from wholesale markets which are functioning on a commercial basis;
- The market review process should no longer define markets purely on a national basis - regulators need the tools to examine competition on a local basis when appropriate;
- The Commission should consider how the broadband State Aid guidelines might be adapted, given the substantial sums of public subsidy that may be involved in deploying future networks.
- DG Competition should (re)engage with telecoms policy, as it is best placed to undertake many of the tasks outlined in the report.
CERRE Director General, Professor Bruno Liebhaberg, says: “The recommendations in this new, original CERRE policy report come at a crucial time for the European Commission’s plans to deliver its ambitious broadband objectives. As such, they should no doubt draw the attention of EU decision-makers, national regulators and industry players.”