A regulatory remedy for European broadband

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

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

Main conclusions:

  • 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.

Subscribe to our newsletters

Subscribe