Sunday, June 28, 2009

Europe: How to Reward the Risk of Investment into Fibre in a Competitive Environment

[ec] ... the call by the 27 Heads of State or Government at the European Council in March 2009 for the Commission to come up with a unifying broadband strategy by the end of this year is at once an important challenge but also a great opportunity. The Commission is committed to responding to this call for action. Not only do we need a European Broadband Strategy to prompt a speedy recovery from the economic crisis, we also need a broadband strategy at European level to extract the synergies from national strategies. This call for action therefore comes at a most crucial time.

The capital outlays potentially needed for deploying FTTH, VDSL or DOCSIS 3.0 networks throughout the EU are clearly significant. Regulatory incentives will influence what regulated firms and access seekers are likely to do on this front. And regulation will also, to a certain extent, define the parameters of competition – just as in the past ten years of successful liberalisation. It goes without saying that a healthy competitive process will in turn have positive repercussions on investment.

Investors in these networks therefore need to be able to make financial returns commensurate with the risks they incur. Cost-oriented access as in today's copper world may under these new circumstances need to be modulated, subject of course to the continued possibility of market entry and sustainable new entrant business models.

Viviane Reding EU Telecoms Commissioner Towards a European Strategy of High Speed Broadband for All: How to Reward the Risk of Investment into Fibre in a Competitive Environment ECTA conference Brussels, 25 June 2009

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