Total Pageviews

Wednesday, January 06, 2010

Collusion between cable and DSL - the love that dare not speak its name?

Its always close to impossible to demonstrate collusion in mobile or fixed broadband markets - operators trot out the old line that its a dynamic marketplace, lots of potential entrants, even if entry barriers to wholesale are impossibly high and its only tinkering around the retail margin (see Tele2 for an example of a well-run entrant ruthlessly keeping costs down and chasing market share in mobile and VDSL).
The last two days have left me pondering that regulatory analysts are not as dumb as competition economists might hope - an excellent post by Rudolf on the Netherlands market and the cable-DSL standoff that may result, much as BT and Virgin are doing the same in the UK. Its very low-grade competition - no-one aiming a knock-out blow, rather like the Haye-Valuev fight for those pugilistic science aficianados amongst you.
Even more significant is the intervention by Larry Strickling, boss of the US NTIA, the brains behind their broadband plans - who argues publicly that as mobile 4G is unlikely ever to offer real price-feature competition that will substitute for cable-DSL duopoly, that the US should be thinking much more aggressively in opening to feature competition:
"locally, where residential consumers make their purchasing decisions, they frequently have limited, and often no, choice among broadband Internet access service providers".
Better results through unbundling has echoes from the 2009 Harvard report on broadband, and European policy over the past decade.
Will this led the EC Cartel Taskforce to leap into action? Not a hope, as Rudolf states: "KPN said it was happy where it was and the other two said the same. This is not collusion in the: Yoohoo, send in the European Commission and the anti-cartel police kind of way, but the effect is the same and much harder too prove. "
But its always nice to remind ourselves that the 'competitive markets' emperor is freezing his butt off.

No comments: