The dark side of AT&T's $US17b investment plans

Stuart Corner
Thursday, 12 March 2009 02:19

IT Industry - Market

He told an ATUG breakfast meeting that cable modem service and DSL service providers had effectively been exempted from market power regulations, that wholesale non-discrimination obligations on wired broadband Internet access providers had been eliminated along with shared access for DSL and that there was no obligation to unbundle last mile access.

He added that a series of mergers had left the US with, largely, local duopolies. "In general, Americans have not more than two real fully competitive broadband options: one telephone incumbent and one cable operator...Competition in US broadband markets is no longer seen as adequate to prevent anticompetitive threats to network neutrality."

According to Marcus, "Apologists for US incumbents will say that the US is not doing all that badly." This he say, may well be true but is irrelevant. "US performance is vastly inferior to what it could have been...The United States had an enormous head start on broadband deployment over everybody else [and] ubiquitous cable television...It has high GDP, high disposable income [and] arguably should have been in the top three in the OECD in broadband adoption."

Marcus concluded. "The actual mediocre performance constitutes snatching defeat from the jaws of victory." He contrasted this with Europe where, he said, a pro-competitive approach had been adopted based on technical neutrality, the identification or markets susceptible to ex ante regulation, the identification of substantial market power, the imposition of remedies proportionate to the degree of market power and the elimination of remedies in the absence of market power.