Telcos grasp the Net

Internet growth in Europe is threatened by the predatory tactics of the former monopoly telecoms carriers, according to the European Internet service providers? lobby, EuroISPA, writes Matthew Slater. Speaking in Brussels at a conference on telecoms pricing, Marco Barbuti, president of the Italian Internet Service Providers? (ISP) association, said incumbent operators were extending their market dominance to the Internet. ?Telecom Italia did not exist on the Internet two years ago, but now it has 51% of the market, and in the past four months it has taken over 70% of all new customers. They are doing this by offering the service at one-ninth of its costs,? Barbuti claimed. ?Soon the only discussions about the Internet in Europe will be conducted by ex-monopoly telecoms companies, and that is not good for the health of the Internet in Europe,? he added. Herbert Ungerer, a European Commission telecoms competition expert, said: ?The commission accepts that there is a real threat that telecoms operators will leverage themselves downstream as a result of their own fears about the Internet and voice telephony. ?This means ISPs will be squeezed by their own high telecoms costs and low cost rivals. But if we are to act we must follow a public procedure,? he said. Ungerer added the EC was aware of the difficulties faced by European Internet service providers. ?Prices for Internet backbone capacity are falling, and will continue to do so. I think the balance of power on the Internet will begin to change over the next two years, and in the meantime the Commission will hit any competition abuse very hard,? he predicted. The emergence of Internet service providers in Europe had been one of the major success stories of the telecoms liberalisation process, Ungerer said. VNU NEWSWIRE