Europe – Turns Out It’s Not Such a Great Broadband Model to Follow

by Mike Wendy on February 22, 2013

Susan Crawford likes to hold out Europe – a sort of contiguous, happy whole – as the model for how to wire more of America with broadband (the U.S. is already at 95%, but I digress).

But I love this.  Though the NY Times Opinion / Editorial staff seems to love Ms. Crawford and her confiscatory point of view, the reporter who covers the EU telecom beat (Kevin O’Brien) tells a different story about Europe – one that seems decidedly less dreamy than Ms. Crawford tells it.

Here are a couple of excerpts; the first from In Europe, a Push for Higher Phone Fees:

…[To] encourage more investment in high-speed broadband networks, regulators are considering helping the biggest operators increase a main source of income: the rent they receive from rivals that lease their landline grids…

…The priority is to create a stable environment for investing in broadband networks, which has been lagging amid the economic downturn. The slowdown is threatening the European Commission’s goal of building a high-speed broadband infrastructure by 2020.

Only 2 percent of the households in the European Union have access to broadband download speeds of 100 megabits per second or greater. In the United States, by comparison, at least 50 million homes, or nearly half, are connected to networks with speeds of at least 100 megabits per second. By 2020, the commission’s goal is for half of E.U. households to have access to this service. Meanwhile, only half of E.U. households have service at 30 megabits per second. By 2020, the commission wants all E.U. households to have this as an option… (Emphasis added)

And this today from A New Chance to Organize Europe’s Telecommunications Industry:

Imagine that the U.S. market for telecommunications was carved up by 200 operators owned by 45 rival companies, each able to sell phone and broadband Internet service only in individual states or, at best, small regions…

…That, with a few exceptions, is the status quo in the European Union, a trading bloc of 500 million consumers and 27 countries whose fragmented legal systems and competing national agendas have largely thwarted a single Continental market in telecommunications…

…E.U. policy tinkering alone may not be enough to untangle the national barriers to a single telecommunications market and create conditions for regional, head-to-head competition among big operators.

Wow.  No Pan-European head-to-head competition?  How could that be good for consumers?  Seems Susan’s Europe is a balkanized mess of a marketplace.  I mean, where’s the speedy, competitive and ubiquitous broadband?  And, which of the 27 different versions of Europe is she referring to when talks about how great “Europe” is?

Good lord, it never ceases to amaze how she can take a couple high-achievers from the EU 27, call them “Europe” and then compare them to the U.S., getting away with statistical homicide – that European “apple” committing fruitricide over a geographically immense and diverse, yet truly single U.S. orange.

You know I say this a lot, but we’ve got it pretty good all across our 50 states.  Yes, the FCC did all right when it decided that Internet service was to be regulated at the national level instead of the state level, like POTS.  And, it went one-better in deciding to avoid heavy-handed phone regulation which would have thwarted – not grown – the spread of facilities-based Internet services.  Even with Net Neutrality in place (which opens the door to restrictive phone regulation for the Internet), 15 years of largely unabated private investment has allowed Internet access to reach 95% of America. In over 85% of the U.S. we have at least two wireline, facilities-based providers of broadband.  And, there are at least four “national” facilities-based wireless carriers for consumers to choose from.  Moreover, there are numerous ways to access the Internet via broadband facilities, such as DSL, 3G, 4G, cable, cable-fiber hybrid, FiOS, broadband over powerline, WISPs, wi-fi and satellite.

U.S. broadband competition abounds.  As long as we can keep regulation to a minimum – where policy promotes rather than deters private investment in facilities – this sustainable, facilities-based progress will grow.

Europe might be a nice place to visit, but I wouldn’t want to broadband (verb) there.  Contrary to what tech Eeyore, Suan Crawford, might think, it is not a model to emulate for pro-consumer, facilities-based broadband growth.

{ 6 comments… read them below or add one }

txpatriot February 22, 2013 at 2:39 pm

I shudder to think that Crawford could be chairman of the FCC soon. I’ve seen no reports in which she claims to be not interested in the job.

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Mike Wendy February 22, 2013 at 3:24 pm

There’s a good write-up on this by Sam Gustin at Time, which may allay some of your concern: http://business.time.com/2013/02/21/as-fcc-chiefs-term-nears-end-speculation-mounts-over-possible-successor/

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txpatriot February 22, 2013 at 4:56 pm

“No chance”. That’s good to know.

IMHO Larry Strickling would be best, but I hear rumors that Obama may want to appoint a woman. Rosenworcel would be great but it would hard for her to pass over Clyburn. Other than being totally incompetent, Clyburn probably wouldn’t be too bad.

And since when has lack of competence ever been a bar to appointed office?

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Robert Mendez February 28, 2013 at 4:59 pm

Is it that you, like the last few administrations, prefer only lobbyists who will bend over in several directions to accommodate the poor stifled bells? Or is it that you prefer to crush the competitive capitalist model by choosing those who contribute most to your favored politicians? What is it about collaboration and competition that frightens you most?

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Alton Drew February 22, 2013 at 6:33 pm

Good points, Mike. The private sector managed to continue investing in broadband deployment in spite of a downturn here in the U.S. Europe appears to have a down turn be the excuse for not aggressively investing in broadband.

Professor Crawford doesn’t understand basic regulatory economics. Her vision is to treat broadband providers as monopolies. That is dangerous. Not only would that introduce more regulatory requirements, it would incentivize broadband providers to deploy fewer, not more, services. She would give them permission to act in the very fashion she opposes.

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Mike Wendy February 22, 2013 at 9:18 pm

Agreed. Another thing that is important but sounds “out there” is that she and her regulatory zealots would have control – an important motivator for some in the big government crowd.

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