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Universal broadband for Europe?

How long before European regulators require CSPs to provide universal access to broadband? And how will these programs be funded?

On January 29th, Britain’s regulator Ofcom published the Digital Britain Interim Report. Action17 states:

We will develop plans for a digital Universal Service Commitment to be effective by 2012, delivered by a mixture of fixed and mobile, wired and wireless means. Subject to further study of the costs and benefits, we will set out our plans for the level of service which we believe should be universal. We anticipate this consideration will include options up to 2Mb/s.

While aggressive, Britain’s plan is not unique. Many European regulators are saying and doing much the same thing.

Sure, they will benefit end users and help stimulate domestic economies, but how will these universal service obligations affect CSPs?

Funding: the critical issue

Governments cannot pay subsidies directly to individual CSPs – doing so would breach EU state-aid rules designed to protect competition. The rules state that infrastructure investment or loans have to be made available to all CSPs, and not just targeted at individual players in the market.

To accommodate these rules, the German government is considering a subsidy to local governments that would in turn invest in new ducts for laying fiber-optic cables. Access to the ducts would be open to all CSPs on equal terms.

Alternatively, government may push funding straight to the industry as a whole, in the form of underwriting bonds issued by CSPs to fund the rollout of next-generation networks. The guarantee of government support, given equally to all CSPs, would reassure investors who are nervous about funding projects in the current climate.

France, like Britain, has pledged to give all households access to broadband by 2012. The country’s government plans to issue a tender early this year for CSPs interested in running its broadband universal service. The Spanish government also made a proposal on universal access at the end of last year, although it did not explicitly mention providing a stimulus to the wider economy as a reason for the move.

Governments are, however, dependent on bidders coming forward to run their broadband
universal services, a possible weakness. They have no power to compel CSPs to cooperate in providing universal service because broadband does not fall under the universal service obligation (USO) in European telecoms laws. In their current review of EU telecoms legislation, national regulators have not proposed adding broadband to the USO, although the process has not been finalized.

Individual governments can still include broadband as a universal service obligation, but
have no powers of enforcement under EU law.

With funding and enforcement such big hurdles, do you think the EU will ever agree to a workable universal service program for its citizens?

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