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Cable Technology Feature Article

October 02, 2008

EU Warms to Facility-Based Competition

By Gary Kim, Contributing Editor

Up to this point, European Union telecom regulators have tended to focus on wholesale access to existing access networks as the preferred way of creating more competition in the communications market. That might be changing a bit as new optical access networks are envisioned and deployed. A new rhetorical stress now seems to be placed on opening up physical infrastructure so competitors can build their own, physically distinct fiber access networks, rather than leasing capacity from an incumbent provider.
Cecilio Madero Villarejo, director of the European Union Competition Directorate Generale has said regulators should encourage a “ladder of investment” for operators to roll out their own fiber networks on commercial terms, and only step in where an uneconomical market necessitates intervention.
The Commission now seems to consider infrastructure competition as the preferred regulatory option, not wholesale access to incumbent optical fiber. In part, that may reflect a new understanding that incumbents have little incentive to invest in new networks if competitors will have rights to lease capacity on those networks at low cost.
“We have no problem saying when possible that infrastructure competition should be the preferred regulatory tool to use by national regulators,” reports Luke Coleman of CommsDay.
But regulation remains essential wherever competition is not economically viable, he points out. “This heavy investment should obviously be taken into vaccount when setting the conditions for which access is mandated. A fair return on investment should be included in the access price,” he says.

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Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary's articles, please visit his columnist page.

Edited by Mae Kowalke