Report on Competition in Broadband Provision by Maldoom, Marsden, and Sidak and Singer Presented to the European Commission

December 17, 2003

A report by Dan Maldoom and Richard Marsden of DotEcon, and Gregory Sidak and Hal Singer of Criterion Economics was presented in Brussels on October 15, 2003 to the Brussels Round Table conference "The Future of the European Telecommunications Industry," attended by member company CEOs, members of the European Parliament, Commissioner Erkki Liikanen, and other regulators from the European Commission. The report, Competition in Broadband Provision and Its Implications for Regulatory Policy, examines mass-market broadband access and take-up, analyzing the current and prospective level of competition and drawing implications for public policy.

The report describes existing competition in the provision of broadband access and examines the effectiveness of such competition in delivering benefits to consumers. The report distinguishes between "facilities-based competition," where providers are using all (or some of) their own infrastructure, and "access-based competition," where providers depend on access to someone else's network. According to the report, although there is a general consensus that infrastructure-based competition is desirable in telecommunications and has an important role in delivering innovations such as broadband, that consensus has not always been matched by coherent regulatory policy designed to facilitate such competition. Nonetheless, the report reveals that broadband penetration has occurred at a rapid rate relative to the adoption of comparable technologies.

The report also explores the potential for growth in platform competition and assesses the impact of public policy on incentives to invest in infrastructure. On the basis of their analysis, Maldoom, Marsden, Sidak and Singer develop conclusions about the appropriate public policy towards broadband. Because broadband is delivered over many different types of platforms, including cable, satellite, fixed wireless and mobile, the current approach, the authors suggest that national regulatory authorities should question the current approach to broadband, which is heavily influenced by the existing regulatory framework for traditional telephony services and access to the local loop.

The report was commissioned by The Brussels Round Table, a forum for leading European telecommunication operators and equipment manufacturers, including Alcatel, BT, Deutsche Telekom, Ericsson, France Telecom, Siemens, Telefónica de España, and Telecom Italia.

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