ECTA Tells EU to Protect Small Broadband ISPs from Dominant Telco Abuse

The European Competitive Telecommunications Association (ECTA), which represents alternative / smaller broadband ISPs, has demanded that the European Commission (EC) “take urgent action” to prevent dominant national telecoms operators (e.g. BT) from using “discriminatory conduct” against them and thus damaging their ability to compete in the new market for superfast broadband (FTTx etc.) services.

ECTA claims that incumbents, such as BT in the United Kingdom (UK), have been “receiving subsidies for years” and in return have often only delivered a partial fibre optic network upgrade via solutions like Fibre-to-the-Cabinet (FTTC), which only takes the fibre so far as your local Street Cabinet.

This “copper gravy train“, as ECTA describes it, has also allowed incumbent Telco’s to limit unbundled access (LLU) to their fibre-based network. As a result the group claims that many smaller operators have “struggled to make a return” on their investment or been driven out of the market entirely.

Tom Ruhan, Chairman of ECTA, said:

“It is time for a wake-up call. The liberalisation experiment which Europe began in the late 1990s is close to failing because regulatory rules are not supporting the business case for even leading telecoms competitors. If current trends continue, we may be back to monopolies and duopolies for broadband services in 5 years time. This will not deliver more investment in broadband and will have a negative impact on the services and prices consumers receive.

It is time the copper gravy train ended. Incumbents which have not invested should be held to account, and the whole system needs to be revised to make sure that all efficient telecoms operators can make a fair return on their investments, not just dominant firms.”

Similar complaints have been made in the UK against the governments Broadband Delivery UK (BDUK) office, which has set aside hundreds of millions of pounds (matched by investment from local authorities and the private sector) to help bring the country’s national infrastructure up-to-date (i.e. making superfast broadband speeds of 25-30Mbps+ available to 90% of the country by 2015).

Unfortunately BDUK’s rules have effectively isolated smaller ISPs from the process by excluding operators unless their revenue exceeds the threshold of £20m average annual turnover or they form part of a large consortium (highly unlikely in this complex market of differing technologies). This has left only the national Telco, BT, and an untested rival project, Fujitsu, to bid for the money.

ECTA fears that such situations will only serve to “strengthen [the] dominant position” of incumbent national operators and wants to see the EU take action, such as by cutting wholesale charges and opening up the market through improved regulation. The European Commission are currently consulting upon the issue with a view to improving regulation and tackling the problem of low-uptake, although not everybody agrees with their direction (here).

Supporting WIK NGA Progress Report March 2012 (PDF)
http://ectaportal.com/en/upload/File/Press_Releases/2012/NGA_Progress_Report_final.pdf