L'angolo di Pierani

Dear Commissioner Kroes: who guarantees us that they will really use such margin to invest in fiber?!

Di seguito tutto quello che ho detto e quanto avrei voluto dire (ma il tempo è sempre tiranno) oggi alla conferenza ECTA, nel Panel High speed broadband: targets, cost reductions,  investment, regulation and pricing moderato da Fabio Colasanti, Presidente dell’International Institute of Communication, e con: Luigi Gambardella, Chairman di ETNO, Hartwig Tauber, Director-General FTTH Council Europe, Erzsebet Fitori, Director ECTA Brussels office, Leonidas Kanellos, Chairman del BEREC dal 2013 etc etc

I go back to the enlightening introduction of Mr Colasanti on un-contentious issues:

–          There is apparently a very large consensus among different stakeholders about the desirability of a rapid deployment of high speed networks, such agreement is reflected in the ambitious targets of the European Digital Agenda.

–          We all agree on the need of new online public services, development of e-skills, greater availability of content, all measures aimed at supporting the demand for high speed networks, although the argument of the lack of demand has been used too often as a justification for not investing appropriately in NGA …

–          we also agree on all those measures aimed at reducing the cost of deploying high-speed networks

WE – as consumers – DO NOT AGREE AT ALL INSTEAD on the necessety to keep artificially high the cost of copper unbundled loops or, even worse, to rise it – as I read in a recent article in one of the most important Italian newspapers, reported as a rumor coming from the Commission, which I hope will be clearly denied today!

–          In our opinion keeping high price of copper is not only contrary to the interests of consumers but, above all, it is in contrast with the general interest in the development of high speed broadband, as it will likely discourage investment in fiber.

–          We quite understand that the incumbents (and who provides them with the necessary money) want to have a certainty and assurance on the return of their investment in fiber but, on the other hand, their claim that price of copper is kept artificially high so that margins can be secured to invest in fiber seems to us somewhat peculiar.

–          In short: who guarantees us they will really use such margin to invest in fiber? If the copper is over remunerated why incumbent should never roll out the fiber? …. instead of using such inflated margin for example to recovering their debts …

How can we solve such enigma?

–          First of all I want to make it clear that the problem is not created by the incumbents around Europe, we do not have anything against them: putting myself in their shoes with a copper network fully amortized on which I no longer have to invest, only maintain, I would probably not embark myself on a complex investment to create a new fiber network, with the risk that this would entail in terms of return on investment and a number of other new dynamics in the relationships with all the competitors to take care of.

–          So the problem is not with the incumbents but with policy makers in Europe and Member States who should find the strength and courage – even before the technical solutions – to facilitate (and impose if needed!) in the public interest, choices of industrial policies indeed crucial for our future

–          In fact, if the increase in high speed broadband penetration and the laying of fiber is essential in the Digital Agenda strategy, since it can enable on the one hand, a more participatory and modern democracy and, secondly, an economic development with a considerable growth in GDP that can assume a countercyclical role in times of crisis, it appears to me without any doubt that the public interest should prevail over the legitimate but short-term and all turned on themselves interest of investors and incumbents.

–          In a provocative way it could be said that incumbents have never built up a network with their money: the fixed networks have been built by the States, while the mobile networks were rewarded with the mobile termination rates. With the fiber it would be therefore their first time to invest in a network! You may understand now why am I urging national governments and European Commission to “impose it” to incumbents by the typical instruments of a strong public policy.

–          The Commission is risking to take a completely different approach when it comes to copper remuneration as compared to the approach it was taken with regard to mobile termination rates – position of the Commission that we appreciated, shared and supported in that occasion !

–          Isn’t it illogic, obsolete, anti-economic to keep high prices of copper? Isn’t it endangering the future competition in the market and driving to a re-monopolization?

–          Isn’t it against consumers’ interest? End consumers at the end of the day, as always happens, will pay for the rising of the wholesale costs of unbundling with its downstream effects end … economic crisis is a problem also for consumers not only for incumbents …

–          Placing an entrepreneurial risk fully on consumers’ shoulders sounds good to you?

Qui invece trovate lo speech della Commissaria Neelie Kroes alla Conferenza di ECTA e qui un commento di Inno Genna: Kroes: l’ho fatto perchè me lo hanno chiesto gli investitori