NERA Economic Consulting Study: 'Deregulation in European Broadband Markets' -- Broadband Means Growth
12 April 2006
LONDON, April 12/Deregulation of the DSL market could spur growth and boost employment. This is the conclusion of the latest study from NERA Economic Consulting, in conjunction with Mercer Management Consulting, entitled "Deregulation in Europe". The study shows the enormous economic impact of deregulation of the broadband market: in Germany alone, it could create 59,000 new jobs as well as boosting national income by 0.2% over each of the next three years.
Background
Deutsche Telekom is planning to upgrade its network to VDSL (Very high bit-rate Digital Subscriber Line) speeds which will allow Internet access to speeds of between 25 to 50 times faster than current ADSL (Asymmetric Digital Subscriber Line) technology. The high speeds will enable new applications and services such as online sales, learning, Internet-based health services, TV, and games.
The German Federal Government and the German regulatory authority, the Federal Network Agency, want to postpone a decision on the necessary level of regulation until data on concrete experiences of the market and competitive structures are available for review. This stance conflicts with the European Commission's position that new broadband networks should be regulated from the start.
This is the context for the NERA / Mercer study, which summarises the current economic discussion on how effective regulation of broadband networks would be, and quantifies the advantages of less stringent regulation using four European countries as case studies.
Deregulation brings clear economic benefits
NERA found that the German broadband population could grow from 8 million in 2005 to 20 million in 2020. Deregulation of new and existing broadband networks could also create more than 59,000 jobs and boost annual GDP by 4.5 billion euros, or 0.2%, annually. The study found similar results could be expected from deregulation of broadband services in three other countries: the UK, Italy, and the Netherlands. Together, over 265,000 jobs could be created in these countries.
About NERA
NERA Economic Consulting is an international firm of economists who understand how markets work. We provide economic analysis and advice to corporations, governments, law firms, regulatory agencies, trade associations, and international agencies. Our global team of more than 500 professionals operates in 20 offices across North and South America, Europe, Asia, and Australia.
NERA provides practical economic advice related to highly complex business and legal issues arising from competition, regulation, public policy, strategy, finance, and litigation. Our 45 years of experience creating strategies, studies, reports, expert testimony, and policy recommendations reflects our specialisation in industrial and financial economics. Because of our commitment to deliver unbiased findings, we are widely recognised for our independence. Our clients come to us expecting integrity; they understand this sometimes calls for their willingness to listen to unexpected or even unwelcome news.
NERA Economic Consulting (www.nera.com), founded in 1961 as National Economic Research Associates, is a subsidiary of Mercer Specialty Consulting, an MMC company.
About NERA's Communications Practice
Our experts have an almost unrivalled knowledge of the economics of telecommunications markets and of the methods of regulation used by governments. Many have significant practical experience of working in the telecommunications industry and regulatory agencies. NERA's experts have developed sophisticated economic analysis, financial modelling, and survey techniques that help address important strategic, policy, and regulatory issues.
