The EU’s broadband challenge, part 3: Barriers to reform

[Commentary] Here are five key challenges the EU Commission faces to realize a digital single market, catalyze the growth of an EU-focused Internet ecosystem, and spark investment in a next generation broadband infrastructure.

1. Taxation: Each European country has its own telecom tax regime.
2. Mobile roaming: Imagine if every time one traveled to a new US state, the phone would switch to roaming and the caller would pay a higher fee. This is the case in Europe today. The telecom industry opposes a new roaming regime because it decouples prices from the underlying operating cost structure.
3. Wireline infrastructure investment: In its failed attempt to promote broadband competition, European regulators forced companies to unbundle their copper networks and sell low priced wholesale access to new entrants.
4. Capital structure: European Commission Vice President Neelie and the EU Commission would like world-class networks across the EU, similar to the U.S. But they do not want to take the political risk to say the unpopular but inevitable word: consolidation.
5. Regulation: Each of the EU’s 28 nations has its own telecom regulator. The regulators coordinate through the Body of Europe for Electronic Communications (BEREC), but there is no overall authority.

[Roslyn Layton is an American PhD Fellow studying Internet economics at the Center for Communication, Media, and Information Technologies (CMI) at Aalborg University in Copenhagen]