Broadband Needs Clear Regulatory Vision, Says Analysys.

Business Editors/High-Tech Writers

SAN FRANCISCO--(BUSINESS WIRE)--March 25, 2003

The economies of Europe and the USA may miss out on the full benefits of broadband unless an appropriate regulatory vision is created for the future of the telecommunications industry, according to a new report 'Regulating the Telecoms Market: competition and innovation in the broadband economy' from Analysys, the global advisers on telecommunications, IT and media (www.analysys.com).

"The advent of broadband technologies has enabled the beginnings of a fully 'networked economy', where people and IT systems can communicate ubiquitously, rapidly and cheaply through always-on fast communication networks," said Ross Pow, one of the authors of the report.

"We have already seen some big changes to the way that companies do business, to where people work and to how governments interact with their citizens, and broadband offers the basis for a huge amount of innovation across the whole economy, much of which cannot be predicted at the moment."

However, the report highlights that the structure of the broadband market means that realizing this innovation and its associated benefits will not be straightforward. The deployment and delivery of broadband involves a number of different layers (ducts, cables, network transmission, services, and content and applications), each of which has quite different economics.

"While competition will be the primary means by which economic benefits will be secured, with lots of players offering innovative services and applications," added Pow, "it may be necessary to consider a market structure that has fewer players at the duct and cable layers in order to realize the required level of investment in rapid, widespread and commercially-viable broadband rollout."

This, according to Analysys, requires regulators and policymakers to consider continuing with an industry-specific regulatory model, rather than moving to a purely competition-based approach as is currently being pursued.

Acceptance that it is appropriate for the regulation of broadband telecoms to take into account the potential scale of benefits that it can bring to the wider economy will also be required.

The report recommends that a primary goal for regulators and policymakers, in developing a vision of the telecoms market, should be to maximize the level of innovation in networks, services and applications and, while competition at the higher layers is essential in achieving this, the heavy investment in the underlying physical infrastructure may require alternative approaches to ensuring the ubiquitous availability of broadband access.

Written by Tim Hills and David Cleevely with Ross Pow, the report explains what new regulation in Europe and the USA means for the evolution of the telecoms industry, both now and in the future. It is available to purchase online at http://research.analysys.com/store. Prices start from EUR2400. For more information, telephone Analysys on [phone] or email [e-mail].

An extended version of this release and the report's executive summary are available to journalists on request.