INVESTING IN THE INFRASTRUCTURE FOR A BROADBAND WORLD

convergence-blogANCOM is the National Authority for Communications Management and Regulation in Romania and they recently convened a conference on the future of communications infrastructure in Europe which provided a good example of how government, regulators and industry are working together to ensure a robust infrastructure is in place for our hyper-connected world.

At ITU, we recently worked together with ANCOM on a broadband case study for Romania, which demonstrated how Romania has pioneered affordable pricing for broadband which resulted in a higher broadband penetration, compared with other countries in the European region.

Europe has done very well in bringing benefits of broadband to its people. And this was shown in ITU’s Measuring the Information Society Report, which was published last month, where Europe leads the world both in terms of fixed and mobile broadband penetration, as well as in overall Internet access in households. As a proportion of average monthly income, Europe is among the cheapest regions (along with Asia) for mobile broadband and fixed broadband.

Europe’s leadership in this area is, of course, not a coincidence – significant efforts have been made to remove barriers to competition in the ICT sector. ITU applauds the consistent priority European Member States, and indeed, regional institutions and groups such as BEREC and CEPT, give to monitoring, debating and reviewing regulation in their markets.

Today, almost all European countries have opened up their ICT markets to competition, and the results are clear, with cheaper and more widely available broadband than in other regions.

But Europe is not complacent. The challenge for Europe and for all regions is to avoid stagnation of infrastructure development due to under-investment at a time when bandwidth demands are rising exponentially and while revenues are static or under threat.

And this is what I have understood to be the background to the European Commission’s proposal on measures to reduce the cost of deploying high-speed electronic communications networks and the Recommendation on consistent non-discrimination obligations and costing methodologies to promote competition and enhance the broadband investment environment.

Modern converged communication networks mean that: trenches have to be dug; ducts have to be laid; towers and masts have to be constructed; and cables and antennae have to be installed. We welcome any move to make the costs of network installation cheaper and fairer on a non-discriminatory basis, which can only be good news for consumers.

But to maximize consumer benefit, telecom operators need to be able to generate fair returns on their infrastructure investments, which is difficult if your margins are undercut in a highly competitive market, or if some of your key competitors no longer even operate a physical network.

In the move to a more efficient market, ITU welcomes the economies of scale and greater benefit for consumers which can be achieved through infrastructure-sharing and open access.

These are hot topics debated every year by the global regulatory community as part of ITU’s Global Symposium for Regulators (GSR), and these issues have featured regularly in our Best Practice Guidelines, which many of you have contributed to and are familiar with. At the next edition of the GSR in June 2014 in Bahrain we will be featuring infrastructure sharing and innovative regulatory approaches as part of the debate on meeting the demand for ultra-high speed capacity networks.

Nevertheless, these are difficult issues in practice, where market power can turn market position into abuse and we recognize the difficulties inherent in opening up infrastructure to use by different market players, many of whom are also direct competitors. We welcome the important attention this issue is receiving at the European level.

Just last month, Vice-President Neelie Kroes, addressed the Eighth Meeting of the UN Broadband Commission for Digital Development in New York.  The Broadband Commission is a group of some 60 senior representatives from government, industry and the UN family, who have come together to advocate the importance of broadband for economic and social development.

Vice-President Kroes explained the major shift from “27, and now 28, ring-fenced national markets” for mobile to a united regional market for mobile. While there was a lot of interest in the new proposals, there was also a lot of concern – especially among industry players – about the implications for the current ICT industry and existing market players, which is already undergoing a significant shift in business models and revenue streams, in the transition to all-IP.

And of course the industry is very concerned about where the investments for costly next-generation all-IP networks will come from.

It is good to note that investment in infrastructure was one of the key topics at WCIT-12, and the revised ITRs put in place new provisions designed to encourage investment.

In the 21st century, broadband has become essential infrastructure, just like roads, railways and power networks, and it is our duty to ensure that we bring the benefits of broadband to all the world’s people – wherever they live and whatever their means.

contributor_Doreen_BogdanBy: Doreen Bogdan

Mrs. Doreen Bogdan-Martin was appointed the Chief of the Strategic Planning and Membership Department in the General Secretariat as from 1 January 2008. She was previously the Head of the ITU/BDT Regulatory and Market Environment Division and was responsible for the programmes on Regulatory Reform and Economics and Finance. Doreen tweets at @DoreenBogdan

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2 comments

  1. Doreen, thanks for your insightful comments about a crucial topic for all of us.

    Europe shouldn’t rest on its (actually still not earned) laurels. In my opinion, the developed countries are too carefully trying to weigh pros and cons of fixed broadband, without knowing that there are no cons in the long run. At present, FTTH deployment in Europe is way below 10%. Vectoring is currently beeing hyped as a long term solution, which actually delays the ultimate goals.

    Bear in mind that our grand-grand fathers once have constructed railroads, inexorably driven by the vision of a much faster transport (of messages). Of course, a certain generation has to disclaim due to heavy investment. But sticking less to the ROI dogma would be much more sustainable, since there is a future generation to come.

    One cannot underestimate global broadband deployments, it will produce a much better quality of life and numerous new business models, fostering the prosperity of the global society. As the railways have been doing.

    Dominik

    Check out my young blog:
    http://dominikschweizer.wordpress.com/2014/01/13/fixed-broadband/

    1. Thank you, Dominik, for your valuable comments. I entirely agree that global broadband deployments will produce an enhanced quality of life and foster the prosperity of the global society – indeed, that is one of the core messages of the Broadband Commission (www.broadbandcommission.org ). Doreen Bogdan

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