This article is part of our special report Broadband: driving recovery?.
A regulatory remedy for European broadband
"Lawmakers and regulators must abandon their fixation on low prices."
The McKinsey Quarterly, 2002 Number 1
- Regulators must be worried as their vision of deregulated markets leading to widespread broadband penetration and broad consumer choice has been delayed;
- The challenges facing broadband are no longer technical or demand related, but economic;
Policy makers and regulators must abandon their focus on continually pushing prices lower and instead focus on three key issues:
- Improve the economics of local telephone service: incumbents have universal penetration whilst new companies lack this scale and therefore face higher costs, placing them at a disadvantage;
- Strengthen the cable television industry: telecom and television regulators must work together to allow cable companies to expand profitably;
- Open the gate to attackersby unbundling the system, encourage the deployment of alternative access and (where competition is weak) couple incentives for incumbents with specific broadband coverage targets;
- Enlightened regulation alone will not be enough to cover Europe with broadband: companies must also fix some major operational problems;
- Lawmakers and regulators must steer toward an integrated set of policies that stimulate competition for broadband and local services and allow the financing of these improvements.
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- Recent story on telecoms:ELiikanen says EU should promote broadband internet access(21 January 2001)