Europe opens up high-speed Internet to competition

The 'Recommendation on relevant product and service markets within the electronic communications sector susceptible to ex-ante regulation' is a key measure in the new Regulatory Package for telecommunications in the European Union (EU) which is due to come into force in July.

Renato Soru, founder and CEO of pan-European Internet service provider Tiscali, welcomed the Commission's move: "Newcomers offering broadband need interconnection or bit-stream access to the incumbent's existing local network. Without this, competition is hindered – with the risk of a de facto Internet monopoly along national lines.

"The incumbents currently have a stranglehold on high-speed Internet in most EU countries, to the detriment of competition and customers. We are glad that the Commission chose to uphold the principles of competition and of the Single market and, if properly implemented, this Recommendation will ensure that high-speed Internet in Europe really takes off."

Locally, Tiscali World Online also fully supports the Recommendation. Says Graeme Victor, CEO of Tiscali World Online: "The international trend towards deregulation of telecommunications markets is something that the South African market has long called for in order to end the monopolistic framework in which we operate.

"However, with the unfortunate timing and consequent lack of international telecommunications company participation in the recent bid process for the Second National Operator (SNO), it looks like we are still a while away from any level of competitiveness within the telecommunications environment."

According to Victor, there are steps that Independent Communications Authority of South Africa (ICASA) could take in terms of liberalising the South African market framework.

He says: "Access to broadband services have only recently been provided by Telkom and these services are only available on a very restricted basis. The rates attributed to these services are substantially higher than those applied internationally.

"For the benefit and development of our local economy, our regulatory environment needs to establish a framework that encourages the fast rollout of broadband services at reasonable prices to consumers. If the current competitive environment does not facilitate this, then the regulatory authority in South Africa should follow the lead of the European Commission – and take appropriate steps.

"Ultimately, the benefits will be immense - by making services like ADSL accessible to a wider community of service providers, and by enabling them to deliver these services at affordable prices, means that Internet access services to home users and small businesses will be significantly improved," says Victor.