EU Notes That Broadband Competition Means At Least Four Providers

from the that-seems-a-bit-more-like-it dept

Tue, Feb 19th 2008 6:56am — Mike Masnick

As the net neutrality debate is back in the headlines again, it's worth reminding everyone that this wouldn't even be a debate at all if there were real competition in the broadband market. Unfortunately, the FCC has chosen to use bogus numbers to determine if there's broadband competition, which allow them to claim that there's competition even if many people only have access to a single provider. Thankfully, it appears that Europe is going down a different path. It appears that European regulators have decided that it's not a competitive market unless there are at least four providers in the space. With less than that, regulations come into play to require line sharing (something the FCC did away with in the US), creating a more competitive environment.

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Filed Under: broadband, competition, eu

14 Comments

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Merijn Vogel, 19 Feb 2008 @ 7:39am

competition seems to actually work in europe
For television, telephone and internet there are quite a few providers in the Netherlands, one of the smaller EU countries. We can choose from a dozen or so mobile providers, half a dozen cable companies and half a dozen phone operators. Internet, television and phone are quite often bundled, and rather cheap.

For instance, all providers for internet give unlimited access, for very reasonable pricing. Many of the mobile providers give unlimited mobile access to the internet as well for only about $12/mo.
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Chronno S. Trigger, 19 Feb 2008 @ 7:53am

Broadband Competition
We presently have 5 broadband providers (6 if you count Verizon DSL and FiOS separately) where I live and more dial-up providers than I can count. But I don't think 3 count because they provide 300K down for $60/month starting. They normally provide business DSL and just happen to allow residents to plug in.

I know that I'm one of the lucky ones who has these options but it's still not proper competition. If comcast decides to throttle down my connection I can go to Verizon and pay unknown amounts or go to one of the other three and also pay unknown amounts starting at $60.

By the way, there is a new provider in the Greater Pittsburgh area. I saw them advertised on turner classic movies but haven't seen them since. I don't suppose anyone here knows who that was. They say their faster than Comcast and start at $40.
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matt, 19 Feb 2008 @ 7:56am

hmm
Given the nature of how deregulation has ended things up in the US I am concerned if something similar would happen in the UK and/or just how this competition is calculated.
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carl, 19 Feb 2008 @ 8:46am

line sharing is not "competition"
i was in the telco space during the bust of 2000. the "line sharing" provisions of the TCA at the time stifled investment in the last mile networks. why would verizon or sprint spend billions to upgrade their last mile when they would have to turn around and let some startup use those lines at a competitive price? how was verizon or sprint or whoever supposed to make back their investment in a reasonable amount of time? forcing someone to invest in infrastructure and then telling them they can't use that infrastructure for competitive advantage is not competition. it's socialism. now that this has been ended, companies like verizon are investing again - FIOS is the result of that. if you want to start a company and invest in building infrastructure, then by all means compete. in my area, time warner has a monopoly on cable tv. but you can get DSL. and once FIOS come into my neighborhood, i'll have yet another option.
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Anonymous Coward, 19 Feb 2008 @ 9:20am

Re: line sharing is not "competition"
They should have built it out as that's what we gave them several billion for back in the mid 90's as part of the teleco deregulation.
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Mike (profile), 19 Feb 2008 @ 10:26am

Re: line sharing is not "competition"
why would verizon or sprint spend billions to upgrade their last mile when they would have to turn around and let some startup use those lines at a competitive price?

Because the gov't was giving them rights of way and subsidies to make it worth their while... and because they can make plenty of money as a wholesaler.

how was verizon or sprint or whoever supposed to make back their investment in a reasonable amount of time?

Again, subsidies, plus wholesaling the infrastructure.

forcing someone to invest in infrastructure and then telling them they can't use that infrastructure for competitive advantage is not competition. it's socialism

It's not socialism. If you understand what natural monopolies are, you realize that it's better to create competition on top of the platform, rather than between platforms:

http://www.techdirt.com/articles/20080116/005211.shtml

if you want to start a company and invest in building infrastructure, then by all means compete

If the gov't is willing to give me billions in subsidies and grant me exclusive rights of way... then, yes, perhaps we can talk. But when those rights are limited to just a few providers, then it's not competitive at all. In fact, having the gov't give so much to telcos certainly seems a lot more socialistic than capitalistic to me.
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Dave Records, 19 Feb 2008 @ 11:16am

Re: line sharing is not "competition"
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Dave Records, 19 Feb 2008 @ 11:17am

Re: Re: line sharing is not "competition"
Would it not make sense to have an independent own the "last mile" and rent space to anyone in the co? That way we could have true choice.
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moe, 19 Feb 2008 @ 12:13pm

Re: Re: line sharing is not "competition"
Just wanted to re-iterate this ... we (U.S. taxpayers) gave the telcos over $20 billion (with a B) to build out the infrastructure. Where is it?

When you can show me that infrastructure, then I'll think about giving the telcos a fair shake. So far, though, they're in the hole big time.
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comboman, 19 Feb 2008 @ 12:19pm

Re: line sharing is not "competition"
why would verizon or sprint spend billions to upgrade their last mile when they would have to turn around and let some startup use those lines at a competitive price?
Let me get this straight, you're saying line sharing is not competition because they're forcing someone to sell something at a competitive rate? Do you know what the words competitive and competition mean?
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Matt S, 19 Feb 2008 @ 12:27pm

Re: Re: Re: line sharing is not "competition"
Well, the lesson seems clear. If the gov't tries to direct buildout using subsidies and forcing line sharing, the buildout doesn't happen. If the gov't gets out of the way and doesn't limit what the builders can do with their networks, we get FIOS and U-verse and Comcast bumping up to 16 megabits.

We're technologists, right? Seems like we should appreciate the empirical evidence.

Indeed, line sharing is not competition. It's one network resold by a number of parties. The only competition is in the logo that appears on the bill.

Internet access is not a natural monopoly. There is plenty of room for competition if we keep bureaucrats off the network. Look at mobile phones -- are they a natural monopoly? If so, how is it that we have so many competitors?
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Anonymous Coward, 19 Feb 2008 @ 12:54pm

As it stands, the govt. is making it difficult to bring in competition for broadband. In NJ, Verizon has to go town by town to get approval to lay fiber. My area is still waiting.

Without state pressure though, Verizon would wire the high density areas and probably leave the rural areas without access.

Neither regulation or market forces is the only answer, there has to be both if we want everyone in the US to have competition.
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Anonymous Coward, 19 Feb 2008 @ 2:30pm

Re: Re: Re: Re: line sharing is not "competition"
If the gov't gets out of the way and doesn't limit what the builders can do with their networks, we get FIOS and U-verse and Comcast bumping up to 16 megabits.

What the government needs to do is get out of the way and stop protecting the incumbent operators from competition. I don't know of anywhere in the US where you can freely build systems to compete with them.
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Anonymous Coward, 20 Feb 2008 @ 1:07pm

One point is the government you are actually talking about. Its not federal, its usually not state either. Usually it is your own city, town, boro or where every you live. Its your mayor and town council. You know, those guys who you wouldn't vote for if you actually voted.
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