Panelists Debate Success of U.S. Deregulation in Broadband

Experts on both sides of the Atlantic squared off on Monday about whether the United States’ broadband policies were a success.

By William G. Korver, Reporter,

WASHINGTON, June 9– Experts on both sides of the Atlantic squared off on Monday about whether the United States’ broadband policies were a success, with Europeans arguing that U.S. broadband cost too much, and an American praising a deregulatory telecom policy.

Costs in the U.S. Are rising because competition is “drying up” with the consolidation of telecommunications companies, said Aryeh Friedman, senior competition and regulatory counsel at British Telecom. He also said that U.S. internet speeds declined in comparison with the United Kingdom.

By contrast, Thomas Hazlett, professor of law and economics at George Mason University School of Law, said that deregulation of broadband by telecommunications carriers in 2003 led to a “substantial increase in deployment” of digital subscriber lines (DSL).

The panel, titled “Transatlantic Perspectives on Broadband Policy: Inter- versus Intra-Platform Competition,” was co-sponsored by the Centre for European Policy Studies in Brussels, and the Technology Policy Institute, a new Washington-based think tank. The event was hosted at the National Press Club.

Friedman also stated that more than 99 percent of households in the U.K. are now DSL-enabled, with 55 percent broadband penetration. He said that 90 percent of DSL subscribers have speeds of 3 megabits per second (Mbps) or higher. He also said that the U.S. has not subsidized enough money into deploying broadband.

The large number of providers in the U.K. meant that Network Neutrality was “really not a debate”over there.

Hazlett also addressed wireless broadband, and said that the U.S. government had not done enough to make use, for broadband, the vast amount of radio frequencies currently reserved for television broadcasting.

Andrea Renda, a senior research fellow at the Centre for European Policy Studies, said that some feared that the European Commission might suffer if it followed the model of structural separation used by the U.K. Enforcing such competition might create an “everlasting monopoly,” he said. Further, it might not ever present the Commission with an opportunity to roll back regulation when the market becomes competitive.

In any case, Renda said that “the future is mobile.” He also cautioned against comparing broadband penetration in the U.S. with that of a small country like Denmark.

Marvin Sirbu, a professor of engineering, public policy, and industrial administration at Carnegie Mellon University, said that broadband penetration levels in the U.S. and France were fairly close. But the differences in prices were start, with a typical purchase costing $12.60 per megabit per month in the U.S. versus $3.70 per megabit per month in France.

Sirbu attributed this difference to a market with more competitors in France, versus a duopoly of cable and DSL providers in the U.S.

The differences in approach are “highly related to the Anglo-Saxon” fondness for checks and balances versus the French historical preference for centralized planning, he said.

Complimenting the panel’s discussion, Ambassador David A. Gross, U.S. coordinator for international communications and information policy, extolled the remarkable progress of the world in telecommunications.

Gross said that telecommunications had “broadened as no one could have reasonably anticipated or expected” over the past 10 years. The world has experienced a “quantum leap,” he said.

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