Brussels - To promote investment in next generation access networks, what is needed is a positive regulatory approach that supports pricing flexibility and allows the deployment of all high speed technologies capable of delivering high speed access, says ETNO in its response today to the European Commission consultation on costing methodologies.

“ETNO members, who contribute to more than two thirds of NGA investment in Europe, share the Commission’s concerns about the deployment of high-speed broadband to meet the Digital Agenda targets and ensure that the economy as a whole can reap the benefits of broadband. ETNO believes however that a disruptive change from current costing methodologies as discussed by the Commission would discourage further investment both in fibre and other high-speed access technologies”, says Luigi Gambardella, ETNO Executive Board Chairman.

As demonstrated in a forthcoming new study conducted by Plum Consulting, lowering the price of copper via a change in cost-methodology would undermine regulatory certainty and reduce anticipated revenue from next generation access investment.

Trust in a balanced and predictable regulatory process in Europe has proven a decisive factor for investment decisions by network operators and outside investors. By proposing to lower copper prices except for those areas where the operator commits to investment in fibre networks, the Commission is risking to further undermine the attractiveness of investment in fixed networks in the EU. Lower copper prices would not only negatively affect incentives for investments by regulated operators but also by alternative players in other platforms.

By focusing on investment in fibre to the home by the regulated operator, the consultation does not take account of the key role that other platforms including copper networks through VDSL and VDSL Vectoring upgrades can play to deliver high speed access. In its Digital Agenda for Europe, the European Commission had insisted that targets for high speed broadband can only be reached by using all existing or future technologies, including FTTH/B, upgrades of existing copper networks, cable or next-generation mobile networks.

Regulatory barriers to a commercial migration to high-speed networks should be reduced as far as possible. Regulation should in particular facilitate the roll-out of new technologies also where this implies a change in available access products. Transition to fiber networks is a process and may vary depending on local conditions; fast copper switch-off as discussed in the consultation, therefore, does not appear realistic and would fail to accelerate NGA deployment. First experiences with commercial copper switch-off indicate that copper and fiber networks will run in parallel for a long period of time to ensure a smooth migration and reduce customer switching costs.

“Pricing of current networks, in today’s difficult context for the sector, is an extremely important factor influencing investors but also customers in the transition towards high speed networks. Lower prices for copper-based broadband access will not only hit already declining revenues but further discourage consumers’ willingness to migrate and hence market’ willingness to invest”, added Gambardella.

For more information, please contact: Thierry Dieu, ETNO Acting Director/ Communications Manager Tel: (32-2) 219 32 42 Fax:  (32-2) 219 64 12 E-mail: dieu@etno.be

ETNO’s 40 member companies and 10 observers from Europe and beyond represent a significant part of total ICT activity in Europe. They account for an aggregate annual turnover of more than €600 billion and employ over 1.6 million people. ETNO companies are the main drivers of broadband and are committed to its continual growth in Europe.