Last updated: October 3, 2011 - 8:43am
Telecoms operators’ profits on their ageing copper networks in Europe may be stifled to spur investment in high-speed broadband under plans put forward by European Union telecoms commissioner Neelie Kroes.
Commissioner Kroes said she was “very interested to explore a new pricing model ... creating the conditions for the replacement of the old copper network with fiber”. Her plan would impose extra regulations on the owners of copper networks, such as France Telecom and Spain’s Telefónica, by lowering the price at which they are forced to grant network access to smaller rivals in so-called unbundling deals. Incumbent operators could be exempt from the lower charges if they opt to invest in fibre networks to replace copper ones. Private investors have been reluctant to invest the €270bn Commissioner Kroes estimates is needed for Europe to match Internet speeds in parts of the US and Asia. The former EU competition enforcer said she saw “some truth” to arguments that large incumbents were delaying investing in Internet lines for fear of cannibalizing their business. She acknowledged that artificially reducing the price of copper lines would make broadband packages cheaper – potentially making it more difficult to convince consumers to upgrade to fiber.
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