European regulation fails to solve broadband problem

Leased lines will power European business broadband, but are over-priced and of low quality
Written by Jane Wakefield, Contributor

The concept of an online Europe is in danger of derailment unless governments act now to reduce costs and increase quality of broadband services.

According to a Yankee group survey, European businesses are paying 150 times more for local leased line broadband connections than they do for international lines and 150 times what their US counterparts pay. This is despite the fact that it costs just two times more to roll out local broadband services than international services.

And now the company that commissioned the report, backbone firm Ebone, is, along with the European Competitive Telecommunications Association (ECTA), taking this issue to the European Commission. The concerns, Ebone claims, are gathering a good deal of industry support too.

Ebone's chief operating officer Duncan Lewis said the current situation is unacceptable. "eEurope is under threat due to the local broadband bottleneck and European governments are ineffective in delivering on their commitments," he said.

According to the Yankee group research, nearly 80 percent of big companies cited bandwidth increases as the single biggest change they intend to make to their businesses. leased lines were the preferred method of increasing bandwidth, with broadband fixed wireless access second, ahead of DSL. The Yankee group surveyed 87 large corporations across Europe.

"Leased lines are their key broadband option," noted Lewis, adding that without immediate action to shake up the market, businesses will not be able to compete with their US counterparts.

In the UK, Ebone and other telcos are reliant on BT for leased lines. Not only are they overpriced, said Lewis, but they are also of low quality and with no service level agreements customers can wait long periods for installation. "It takes between 20 and 150 days to get an access pipe to customers and that is hard for them to bear. It is hurting businesses who require affordable broadband to be competitive," he said.

With such "excruciatingly slow" delivery times, Ebone's director of corporate development has called on Oftel to force BT to offer service level agreements and implement penalties for failing to meet these. The watchdog ruled at the end of last month that BT must provide a new wholesale product for the leased lines market. Now the two camps have five weeks to find a suitable solution.

But the lead-line problem is European wide, not just confined to the UK. All European heads of government signed up to the EC's eEurope pledge in March last year. Crucial to this document was an awareness of the need to implement broadband technologies and implement legislation that banned overpricing and discrimination. According to Ebone this is currently just not happening.

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