Last updated: October 21, 2008 - 8:49am
Broadband prices could rise by up to one-third if regulators in Europe insist on strict "net neutrality" rules that would block carriers from charging content providers premium prices to prioritize certain web traffic, a leading think-tank is set to warn. An industry-commissioned report from consultants at Copenhagen Economics, due to be published next week, is set to warn that imposing net neutrality in Europe will "pass on the cost of scarcity to all consumers" and significantly increase broadband prices. That, in turn, could depress broadband demand. The report's authors suggest, for instance, that the average monthly broadband subscription rate could rise from €33 ($44) to €44 in Sweden, and from €29 to €39 in Germany. In the latter case, the loss in "consumer welfare" from the increased cost and lower broadband penetration could be as much as €1.7bn annually. A separate report, due out in the next few days from the Centre for European Policy Studies, also concludes that "mandating net neutrality would not be a desirable option".
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