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Ofcom and EU face off for high speed broadband row

Bureaucrats and Eurocrats set to butt heads on fibre investment

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UK and European telecoms watchdogs may have set a collision course this week over whether incentives should be offered to tempt broadband giants to invest in new high speed internet infrastructure.

The UK government says delays in rolling out fibre could be a barrier to economic growth, but has only just opened informal discussions with BT and the rest of the broadband industry on how to make it happen.

In a speech in Budapest yesterday, the EU's information society and media commissioner Viviane Reding issued an early call for national regulators to act to boost investment in optic fibre. She said: "The treatment of Next Generation Networks is one of the most important regulatory issues facing us over the coming years.

"I want regulation to encourage investment in future networks. Regulatory holidays are not the solution, what we need is appropriate regulation that safeguards competition while creating new incentives for investment."

The commissioner's comments are in contrast to the stance taken by Ofcom boss and die-hard market forces advocate Ed Richards yesterday. Following the government's hush-hush summit on high speed broadband investment on Monday, he said [our emphasis]: "Ofcom's role is to deliver a robust regulatory framework allowing industry to deploy when there is a clear business case for doing so and in a manner which brings benefits to consumers."

The philosophical difference will serve to strain already tense relations between Ofcom and watchdogs in Brussels. The UK regulator has recently publicly grumbled about Viviane Reding's move to create a European über-regulator for telecoms.

She, in turn, has accused national watchdogs of having too cosy a relationship with industry.

Reding, who won the UK ISP trade association's "Internet Villain of the Year" gong this year, promised yesterday to draw up policy recommendations for national regulators on next generation broadband by the middle of 2008.

Efforts at Ofcom, meanwhile, are focused on economic analysis and establishing Richards' "business case" for the £15bn cash injection it's estimated a national optical network would need. BT's strategy, in public at least, is to wait it out and see if anyone else can make the sums work.

Stephen Timms, the Department for Business, Enterprise and Regulatory Reform (BERR) minister in charge of fostering next generation broadband in the UK, has meanwhile just started work on his "vision statement", a document that will be designed to contain no policies.

Ofcom is in consultation until 5 December on what its policy should be. Creating new artificial incentives to invest has not been ruled out, but would be unprecedented in the internet age and against the market forces doctrine now expounded at the regulator.

An Ofcom spokesman said part of the consultation's aim is to establish if there are special features of the UK market that mean Brussels shouldn't get involved in regulating it. ®

Bootnote

Though press weren't allowed to attend the broadband summit on Monday, BERR has helpfully provided a YouTube video press release instead. It's democracy 2.0 - just like first time round, but with nobody there to call bullshit on government PR.

"We are leading the world in broadband penetration, take up and use," claims Timms in the clip.

No we're not. It varies slightly depending who you ask, but nobody ranks the UK as a contender for first. According to the EU (pdf, page 5), we're seventh in Europe, behind Denmark, the Netherlands, Finland, Switzerland, Luxembourg and the mighty Belgium.

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