Saturday, July 08, 2006

Proposed deregulation in Europe ignores convergence

At BackChannel we normally maintain a neutral view on de-regulation, with all it's ups and downs without it there would be no public internet, no near universal Broadband etc. etc. But sometimes you have to hop off the fence.

The vision behind the proposed creation of a European Uber-regulator seems more suited to the mid 80's than the late Naughties.

Viviane Reding, the commissioner responsible for Information Society and Media has been speaking about possible moves by the European Union to increase deregulation in Europe by forcing the Former PTTs to 'structurally separate' their various telecoms business as was done by the UK regulators Ofcom in the early 80's.

The proposed deregulation would only effect former PTTs and would undermine the ability of these largely successful European Operators to compete in their own markets. Whilst at the same time handing a significant competitive advantage to US, Far Eastern and even Australian based companies, who would be able to leverage infrastructure and cross subsidise to their hearts content

The move would force them to break up their existing business, seperating telephony fixed from mobile, internet business from consumer each from the other and don;t even talk about content delivery. All this just as the technology starts to converge, just as companies gear up for triple and quad play, and just as interest in converged telecoms is starting to rise.

In future, virtually all telecoms services will have an element of Internet in their fundamental make up. So it will become technically impossible for Telcos to "Structurally Separate" Telephony, from Datacomms, from IPTV.

The impact of the cellular networks, the Internet and in particular the underlying IP (Internet Protocol) technology is largely missed in Ms Redings statement.

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