High-speed broadband in need of regulations

Infrastructure firms wary of multibillion-pound investment required

Regulation could help the rollout of European broadband

Telecoms watchdogs will play a key role in ensuring the swift rollout of next-generation broadband networks, according to the European Commission.

Super high-speed services with bandwidth of up to 100Mbit/s are already available in some areas of France and Germany, and in the UK trials are under way. But infrastructure firms are not convinced of the business case for the multibillion-pound investments required to upgrade the telephone network.

Getting the incentives right will be crucial, European Commissioner for the Information Society Viviane Reding told a conference held in Brussels
last week.

“I see it as entirely appropriate for regulators to allow infrastructure providers to make a reliable return on next-generation access investments, in return for testable guarantees of non-discrimination,” she said.

The Commission is concerned that bundling broadband with telephone access and other services could limit consumers’ options.

“The traditional operators have every reason to try to channel traffic through their own services and to close off the open nature of the internet, especially if they are faced with demands from investors for more revenue to pay back major investments,” said Reding.

In the UK, the government is expected to make a vision statement on the future of high-speed access before the end of January. Earlier this month, the Department for Business confirmed that it would not force BT to invest the estimated £15bn needed to put high-speed fibre connections in every home.

Establishing a regulatory balance could prove tricky, said James Allen, principal consultant at Analysys.

“Any thought that BT may get some form of dominant position will deter companies such as Sky from spending millions on fibre networks,” he said.

“Conversely, if Ofcom does decide to regulate and gets its prices wrong, BT will never make an investment either.”