Europe's Consumers Could Lose in Auctions of Internet Spectrum

In Europe, the digital dividend may not pay off as well as it should. Across the Continent, the sale and redeployment of lucrative television broadcast frequencies for high-speed mobile Internet service — the so-called digital dividend — has so far done little to increase competition, instead reinforcing the position of existing market leaders.

Consumers appear to be in danger of losing out because the largest operators are using their superior financial and political clout to shut newcomers out of the bidding process and out of the mobile market, advocates said. Limiting competition is likely to have the effect of increasing the cost of mobile Internet services, slowing the adoption of its use and realization of the European Commission’s ambitious goal of providing broadband service with ultrafast, 30 megabit-per-second download speeds to every European household by 2020. “What is happening with the auctions so far has not been in the interests of consumers,” said Ilsa Godlovitch, the director of the European Competitive Telecommunications Association, a group in Brussels that represents smaller telecommunications operators in Europe. “These are only reaffirming a stagnant status quo in most of these markets, or even reducing competition.”