Competition alone won't encourage next generation networks, says EU policy maker

Regulation is still essential, says the European Commission's digital advisor

Europe's top IT policy maker said on Friday he doesn't believe that competition in the market is sufficient to drive investment in next generation networks.

Robert Madelin, head of the European Commission's department for the information society (DG Infso), is in charge of making policy recommendations to achieve the Commission's digital agenda targets -- one of which is for every European citizen to have access to 30Mbps (bits per second) broadband by 2020 with half of all subscribers connected to 100Mbps services.

However, speaking to Vieuws.eu on Friday, Madelin said that "Europe's top decision makers today are not paying enough attention to the need to build tomorrow's infrastructure. ... I don't believe that the ladder of investment reaches to NGN [next generation networks] investment levels."

Next month, the Commission is due to present a proposal on how European Union countries should promote investment in ultra-high speed fiber broadband. One likely recommendation is for reduced rates for access to copper networks of incumbent operators where no investments are being made in NGN, but with level or even raised rates in places where operators do invest in fiber.

"We want to give economically sound principles to countries' regulators to help them set regulated copper prices and we are identifying the most appropriate costing methodologies," said Madelin's boss, Digital Agenda Commissioner Neelie Kroes, earlier this month.

But telecoms operators argue that such heavy regulation is stifling their ability to invest in the roll-out of next generation fiber networks in Europe. According to ETNO, the European Telecommunications Network Operators Association, fiber networks won't be profitable for decades and caps on prices for access to copper networks discourages investment in fiber. Access to older copper networks should be allowed to rise where costs increase, the group said.

A recent report commissioned by Spanish carrier Telefónica and Telecom Italia maintains that "cable is the best option for delivering 100Mbps coverage quickly in those member states where there is an existing cable footprint, since less effort is required to upgrade it. However, for widespread 100Mbps coverage across the EU, other competing technologies are necessary and will be deployed gradually at a speed that is very much dependent on the regulatory framework."

The 100Mbps 2020 targets are likely to be hit by only six member states, Belgium, Denmark, Germany, Finland, the Netherlands and Portugal, the report states.

Follow Jennifer on Twitter at @BrusselsGeek or email tips and comments to jennifer_baker@idg.com.

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