Be Careful What You Wish For: Why Europe Should Avoid the Mistakes of US Internet Access Policy

Over the last few years, policy makers in the European Union have elevated the digital agenda to the highest tier of regional objectives. To reach certain goals, EU policy makers have looked at the results in the US high-speed Internet access market to find insights and alternative regulatory approaches. This policy brief offers a summary analysis of data from the US and EU high-speed Internet access markets to highlight the relationship between policy choices and market outcomes. Our purpose is to debunk the mythology about the robust success of American high-speed Internet access policy and to support clear-eyed decisions in Brussels that will foster a robust Digital Single Market.

Far from reversing course and following the US down the road to divided markets, high prices, and sluggish upgrades, the EU has the opportunity to continue promoting the competitive market framework that has served European consumers well. The goal of policy in this arena, after all, is not investment for its own sake but, rather, investment within the context of a competitive market that prompts the delivery of better services and spurs greater adoption. Most importantly, adoption should be the primary objective, because that is what drives widespread economic activity. But without the lower prices for better services that competition will bring, adoption will not increase. This competitive framework also has the virtue of better promoting the creation of new digital businesses and thus supporting European innovation.