Pajama Entrepreneur

Viviane Reding, the European commissioner in charge of telecommunications will do everything she can to enforce functional (or structural) separation in the EU. According to this article in the NYT, the EU’s efforts to increase competition in the member states, by clamping down on the power of local telecom incumbents, has resulted in a dramatic rise in broadband penetration and in a few countries like France, lower prices and higher speeds. Here are a few excerpts from the article: 

“We have four countries that are world leaders — Sweden, Denmark, the Netherlands and Finland,” said Viviane Reding, the European telecommunications commissioner. “We have eight countries which have higher penetration rates than the U.S. and Japan. We are not doing badly at all.”    . . .  In an interview Tuesday, Ms. Reding vowed to press ahead with an effort to give regulators powers to force the so-called incumbent telecommunications companies to run their businesses in a way that would make it easier for new competitors to enter the market. In countries like Germany and France, former state monopolies have fought fiercely against such a move . . . Ms. Reding emphasized her determination to encourage greater competition in the market and to give regulators the power to force “functional separation” — obliging the owners of telecommunications networks to free the networks from their operating divisions . . . Asked about the recent increase in broadband penetration in Germany, Ms. Reding said it had occurred only under pressure from Brussels to encourage competition. “The German regulator was rather passive,” she said. “After I pushed him, he started to push his market.”    

Read the NYT article here.  My observation: Although the Netherlands is lumped in together with Finland, Sweden and Denmark as having the highest broadband penetration in the EU, I am not impressed at all with the rollout of FTTH in Amsterdam. In Paris, you can get 50 Mbps symmetrical service for 30 EUR. In Amsterdam, the FTTH project called Citynet has not even begun to announce when the center of the city will get FTTH service. I understand Reding’s frustration with local regulators, some of whom are friendlier to the local telco incumbent than others.  Viviane Reding’s recent victory in favor of consumers was forcing the mobile operators to lower voice roaming charges. She’s now trying to get them to lower data roaming charges, which are still outrageously high.  One of my friends got a bill for 10,000 EUR after she took video on her mobile phone and uploaded it to her blog . . . while she was outside the Netherlands!