Internet connectivity is having a profound impact on business and individuals. The move from narrowband to broadband Internet access results in higher connectivity and enables the deployment of new sorts of services. Over the past years, it has already had a big positive effect on Internet usage and is likely to continue in the foreseeable future.
The term broadband is often used to describe a broad set of technologies offering data rates that can vary widely. A distinction is usually made between higher bandwidth (services at speeds greater than 384kbits/s), current generation broadband (speeds of 2Mbit/s and over) and next generation broadband (speeds of 10 Mbit/s and over). An average broadband connection is currently said to be 25 times faster than a dial-up connection.
According to the 2007 report on the EU Telecoms sector published by the European Commission on 19 March 2008, high-speed internet connections can currently be found in one out of five households across the EU, but this is still well below the bloc's 30% target (EURACTIV 19/03/08).
The main issues in the broadband discussion are:
Preventing a new
- the role of government versus private sector in making the necessary investments;
- the deployment of Next Generation Networks - already extensively deployed in the US, Japan and South Korea, but slow to be taken up across the EU despite being increasingly considered as a key element for development in the sector in years to come (EURACTIV 26/06/08);
- questions relating to legacy infrastructure (the technological infrastructure that guides online traffic and needs to be constantly updated);
standardisation, eg. of cable modems;
deregulation and unbundling of the local loop, and;
licensing issues in wireless broadband access.
On several occasions, EU Information Society Commissioner Viviane Reding has expressed "two main concerns". The first is that "broadband is not yet available to all. Deployment costs are high, particularly in distant and scarcely populated areas. In these circumstances, private operators often do not offer broadband because it is not profitable to do so."
Secondly, she points out: "The gap is not just about access. In rural areas, speeds tend to be lower and prices tend to be higher, discouraging use of advanced services."
She says filling these gaps is important "both economically and socially", pointing to studies in the United States, which show that "thanks to broadband, there was an increase of 1% in the employment growth rate of communities with wide broadband coverage, compared to those without."
The European Competitive Telecommunications Association (ECTA) wants member states to implement divestiture (making under-performing companies sell off assets), penalties and more effective regulation to deliver a competitive broadband Europe.
But a statement by the European Telecommunications Network Operators' Association (ETNO) argues: "Let the market do its broadband work." It states that positive market developments are due to competition, and not Internet-specific regulation. New innovative packages should be encouraged - not restrained - by regulation, particularly in the field of bundled offers. ETNO says it is essential to abstain from any intervention regarding retail prices that may either distort competition or block the development of price packages that support the take-up of the Internet. Any extension of regulatory obligations, such as mandatory price-regulated wholesale flat rates, may adversely affect incentives to the development of high-speed access services.
The EU's employers' BusinessEurope has urged member states to take appropriate actions to promote the take-up and roll-out of broadband in Europe, saying quantitative targets are essential.