3rd International Conference of EETT “Innovation in Broadband Networks & Services” – Part B

Day 1 – Session 2: Regulatory Challenges for Broadband Innovation

Chris Fonteijn, president of OPTA and member of the board of the ERG presented the Dutch situation as an effective (impressive) broadband duopoly:

• 94% households are served by cable
• 99% households are served by KPN
• 50%-70% of households are served by alternative operators

The Dutch regulation process has been tailored on infrastructure competition with LLU being the core building block since 1997. Today OPTA is shifting regulation efforts to less broadband access regulation, focusing only to high quality wholesale broadband access. In concluding the key NGA issues for the future, according to OPTA, are:

• Future of infrastructure competition (is duopoly enough?, smooth transition from copper to fiber)
• Market consolidation (future market structure)
• Convergence and bundling (How NGA affects other markets?)
• End-user interests (Freedom/ease of choice, lock-in problems, customer service, universal service)

Enzo Savarese, commissioner of the Italian NRA (AGCOM) discussed the convergence as a business strategy. He distinguishes two types of convergence; horizontal convergence that deals with content production and service creation and vertical convergence that deals with content distribution over different network technologies, devices and operators

He also presented the Italian situation where 95% of broadband is due to DSL offerings making the case of Next Generation Access Networks (NGAN) buildup quite expensive and unlikely to reach mass market / increased country coverage in the near future.

He concluded that the greatest challenge in NGN would be to promote a favorable environment for the operators to invest in convergence (both vertical and horizontal). [But, why should NRAs encourage vertical convergence/integration?!]

Gloria Calvo Diaz, member of the board of CMT discussed the various trade-offs for a successful regulatory process. Regulatory tools are meant to translate and not reduce reality and as such they have to:

• Ensure a plain, fair field of competition and do not try to drive market processes
• Balance regulatory efforts between intra and inter platform competition
• Provide investment incentives and at the same time encourage service competition
• Balance between vertical and horizontal convergence
• Enable, facilitate and incentive market players to coordinate and partner (and not only compete)

George Papapavlou from the European Commission for Information Society and Media was the last of the speakers. He presented the broadband status of many of the member states and he identified 3 key broadband rollout factors in EU:

• Platform competition (when more than one broadband infrastructure is available)
• DSL competition (when no other broadband infrastructure is available)
• Special cases countries

Two special cases were presented (the other cases are more or less well-known). The case of Estonia (no effective regulation but increased infrastructure multiplicity – due to EU funding for infrastructure investments) and the case of Bulgaria (increased competition but no regulation – due to unofficial LAN operators that use their internet connections to serve customers)