Download - Broadband for All through Universal Service?
New objectives in European Digital Agenda
Basic broadband access for all by 2013 Access for all to 30 Mbps and beyond
by 2020 Subscription by 50% of households to
100 Mbps by 2020
The Role of Effective Competition
Competition, based on ex-ante regulation, has led to over 90% market coverage:
At the end of 2008, fixed broadband networks covered almost 93% of the EU population (98% urban; 77% rural)
As a result of effective wholesale access and increasing level of competition significant decrease in end user prices
A pro-competitive legal framework is needed to move forward (see later)
Competition delivers higher speeds at lower prices
0
50
100
150
200
250
300
350
Apr-01 Sep-02 Jan-04 May-05 Oct-06 Feb-08
Year
Pric
e pe
r m
onth
fo
r eq
ual o
r fa
ster
spe
ed, G
BP
0%
5%
10%
15%
20%
25%
30%
35%
Per
cent
age
of b
road
band
line
s s
erve
d by
LLU
1Mbit/s
2Mbit/s
4Mbit/s
8Mbit/s
LLU fraction ofbroadband
Source: Analysys mason
UK: impact of unbundling on broadband prices and speeds
In competitive countries typical users receive 8Mbit/s, compared with 2Mbit/s in less competitive countries
Closed networks undermine NGA benefits
Triple-play (Phone + fixed calls broadband, TV) offer, December 2009
Country Technology Operator Peak speed downstream, Mbit/s
Retail price, EUR (incl VAT)
US FTTH Verizon 15 66.80 (discounted)
Germany VDSL DT 50 59.95 (discounted)
Germany VDSL DT 25 54.95
Belgium Probably VDSL Belgacom 18 70.15
France ADSL Alice (Iliad) Up to 28 19.99
Closed FTTH and vDSL networks controlled by incumbent give little or no speed, price or service benefit to customers
Analysys Mason: Effective regulated access would lead to lower prices and higher speeds in Belgium, and could double adoption of NGA in Germany
High broadband take-up in competitive markets
0
5
10
15
20
25
30
35
40
Nethe
rland
s
Denm
ark
Norway
Switzer
land
Korea
Icela
nd
Sweden
Luxe
mbo
urg
Finlan
d
Canad
a
Ger
man
y
Franc
e
Unite
d Kin
gdom
Belgiu
m
Unite
d Sta
tes
Austra
lia
Japa
n
New Z
eala
nd
Austri
a
Irelan
d
Spain
Italy
Czech
Rep
ublic
Portu
gal
Gre
ece
Hunga
ry
Slova
k Rep
ublic
Polan
d
Turke
y
Mex
ico
Source: OECD
DSL Cable Fibre/LAN Other
OECD Broadband subscribers per 100 inhabitants, by technology, June 2009
OECD
NGAN rollout is expensive but clearly profitable in some areas
VDSL
PON
P2P
SE PT ES IT
71.5% n.r. 18.3% 39.0% 67.4% 100.0%
DE FR
25.1% 25.2% 18.3% 19.2%
13.7% 18.6% 18.3% 19.2%
12.2% 17.6%
12.2% 12.6%
CountryNetwork Type
VDSL
PON
P2P
n.v. 1.6%
0.0% 6.8% n.v. n.v. n.v. 0.2%
0.3% 6.8% n.v. n.v.
Network Type
Country
DE FR SE PT ES IT
18.5% n.r. n.v. 39.0% n.r. 17.6%
Viability of NGA roll-out for incumbents across countries and technologies
Replicability of NGA roll-out for a second mover, 80 % access to existing ducts at current cost-based prices
Source: WIK-Consult
Effective regulation and strong enforcement result in higher levels of investment
Relationship between Regualtion and Investment
0
50
100
150
200
250
300
350
100.0 120.0 140.0 160.0 180.0 200.0 220.0 240.0 260.0 280.0
Institutions and Regualtory Score 2007
Inve
stm
ent
per
Cap
ita
2007
DK
NL
UK
NOIE
IT
FR
ESSE
HU
PT
FIDE
ATEL
CZPL
BE
Achieving Broadband for All
Universal service is not the best tool to
deliver broadband for all: Designed for traditional voice-based services
(market is already delivering) Payphones and printed directories are much less
relevant Inefficient funding mechanisms Dynamically developing markets
Other instruments already in place
The Role of Targeted State Aid
Where private investment in NGA networks is not commercially viable, for example in sparsely- populated, rural or remote areas, targeted state aid can play an important role in providing access to broadband:
Community Guidelines for the application of State aid rules in relation to rapid deployment of broadband networks
Public funding, not a sector-specific levy
The Role of Wireless Broadband
Where the deployment of high-speed fibre infrastructure is entirely unreasonable, even with public funding, wireless broadband can contribute to bridging the digital divide:
• Important, complementary, role for wireless broadband (not substitutable for fixed)
• Non-discriminatory, pro-competitive allocation of spectrum by Member States
• RSPP should recommend a catalogue of solutions to the competitive challenge
• Opening up the Digital Dividend to wireless broadband services by 2015, at the latest
• More spectrum allocated for the rollout of mobile broadband services