Having a Cartwright Moment about Telecoms Regulation

So I read this article with some interest this morning on the Tube. Reading it requires subscription or sign-up (it was one of my 8 free articles a month – I’m not sufficiently motivated to subscribe, I’m afraid, though I’m a big fan of the FT WebApp.) For those non-subscribers, allow me to summarize one of the key points: forced unbundling of telecoms services in the EU (e.g. making companies like BT rent out their infrastructure to competitors at a regulated rate) has brought about great benefits for consumers (e.g. lower prices and more choice for broadband) but at the cost of these companies’ cash flow compared to their US counterparts who are not subject to this kind of regulation. AND (here’s the key part) therefore European telecoms companies have had less money to invest in network upgrades.

CartwfightNow – at the risk of channeling Cartwright from Time Bandits – why, if that’s the case, do I perceive that we have much faster broadband Internet speeds and choice of providers available in Europe than are generally available in US. In London, I have 80 megabit downlink / 15 megabit uplink to my house! And although I am a BT customer I could choose from a number of service providers who (though the magic of local loop unbundling) could provide similar services across the same wires. This is because BT have been investing in rolling out “fibre to the cabinet” (fttc) and fibre to the premises (fttp) technologies and then turning around and leasing that capacity through their wholesale division. My parents in New Haven, Connecticut (not exactly a technological backwater), meanwhile, are stuck with 1.5 megabit downlink from one monopoly provider as the only DSL option available to them.

So what’s going on here? Is there really a tidal wave of broadband innovation happening in the US and I just don’t perceive it?  From where I’m standing, the regulated unbundling seems to have worked well for both for competition and innovation in the broadband space. Am I missing something?

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1 Comment on “Having a Cartwright Moment about Telecoms Regulation

  1. Hi Dan – I think the bit you may be missing is “the experience of living outside London” :-). I get 1.2Mbs to my house via LLU’ed Sky and no other provider can do better! How far does your fttp cable stretch?


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