EU may consider regulating broadband pricing

The gap between broadband haves and have-nots in the European Union has widened during the past year, a trend that might warrant price regulation similar to that imposed on the market for mobile roaming charges earlier this year, the European Commission said Monday.

Fewer than 6 percent of Bulgarians have access to broadband Internet access, while nearly 40 percent of Danes do, the Commission found in its latest study into broadband penetration across the 27 member states of the E.U.

The main reasons for poor market penetration in countries such as Bulgaria are the absence of any real competition for the former national telecoms monopolies, and inadequate Europe-wide regulation, the Commission concluded.

"It is unacceptable that the gap between the strongest and weakest performers in Europe is growing. Europe must act now to get its broadband house in order. I will make specific proposals on this as part of our package of reforms for the E.U. telecom rules on 13 November," said telecoms commissioner Viviane Reding.

Still basking in the widespread praise she enjoyed for slashing the price of using your mobile phone abroad, Reding is now considering a similar intervention in the broadband market, to force down prices in uncompetitive markets in the Union.

Asked if Reding would intervene to force down broadband prices, her spokesman Martin Selmayr said: "Prices play an important role, but price regulation should only be a last resort."

Overall broadband penetration has continued to grow throughout the Union in the last year. The average number of subscribers has grown from 14.9 percent of the population to 18.2 percent, despite the relatively modest penetration rates in some member states. In the best performing countries -- Denmark (37.2 percent) and the Netherlands (33.1 percent) -- one-third or more of the population has broadband, with a substantial proportion using an infrastructure other than that offered by the former national monopolies, the Commission said.

On July 1, there were more than 90 million fixed broadband lines in the E.U., of which some 20 million lines have been added since July 2006, an increase of 28.7 percent. Proportionally, growth during this 12-month period was highest in Denmark (7.7 lines per 100 inhabitants), Luxembourg (7.1 per 100), and Ireland (6.7 per 100).

DSL remains the main broadband technology, with some 72.5 million lines. However, DSL growth has slowed compared to when it was measured in July 2006, while alternative technologies such as cable, fibre to the home, or wireless local loops are more widely used, totaling some 17.7 million lines, the Commission said.

There has been intense competition in DSL subscriptions, demonstrated by a high growth of unbundled local loop products: 55.4 percent of all alternative operators' DSL lines (17.6 million lines) are either fully or partially unbundled now, compared to 45.9 percent in July 2006.

However, the Commission warned that many European citizens are being denied the benefits enjoyed in the more competitive countries in the E.U.