New LECG Study Puts Cost of Unbundling at 30 Billion Euros

by on October 16, 2007 · 6 comments

Its been clear for some time that unbundling regulation discourages investment by potential competitors in their own facilities. Now comes a new study providing some hard numbers on just how much is discouraged. The study, released last month by London’s LECG consulting group, and commissioned by European telcos, looks at the connection between “access regulation” and investment in competing broadband platforms. Based on data from 12 European countries, the authors conclude that a 10 percent reduction in the prices for mandated access causes an 18 percent fall in market share for alternative platforms. For Europe as a whole, this could mean E10 billion in lost long-term investment, and E30 billion in GDP loss.

Worthwhile reading for policymakers here in America, as well as their European counterparts.

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About James Gattuso

James Gattuso is a Senior Research Fellow in Regulatory Policy in the Roe Institute for Economic Policy Studies at The Heritage Foundation. Gattuso also leads the Enterprise and Free Markets Initiative at Heritage, with responsiblity for a range of regulatory and market issues. Prior to joining Heritage, he served as Vice President for Policy at the Competitive Enterprise Institute and also as Vice President for Policy Development with Citizens for a Sound Economy (CSE). From 1990 to 1993, he was Deputy Chief of the Office of Plans and Policy at the Federal Communications Commission. From May 1991 to June 1992, he was detailed from the FCC to the office of Vice President Dan Quayle, where he served as Associate Director of the President's Council on Competitiveness. He lives in Alexandria, Virginia with his wife Dana, 8 year-old son, Peter (whom he relies upon to operate his VCR), and his four year-old daughter Lindsey (who does the DVD player.) He has no known hobbies, but is not nearly as boring as he seems.

Read more articles by James Gattuso.

  • dimitris

    Telcos: “Unbundling is baaaad, mmkay?”

    Whatever. In unbundled Europe, I can still buy faster and cheaper DSL than what I can buy in the US. Here’s a juicy example:

    Greece: 10Mbit down/1Mbit up for EUR37.90/month, no volume limits, servers OK. Prices at bottom-left of page for the majority of non-Greek speakers reading this. The 29.90 number is for the non-LLU option, so there are extra telco racket fees in that case.

    Oh, by the way this also includes two phone numbers, using fully PSTN-interconnected VoIP from the same provider. These come with unlimited nationwide calling and “unlimited” (probably some restriction in the fine print) calling to landlines in international destinations including US, Canada, UK etc.

    I’ve also seen numbers like $20/month for 6Mbit DSL connections in Slovakia.

    Of course I’ve seen second hand reports of many more such offers around Europe, but the above is what I remember off the top of my head at the moment.

    So, the telcos say unbundling is bad? Puh-leeeeease.

    PS As I write this, I’m trying to counter the second attempt by my local telco racket (Qwest) to mess up the CLEC installation for my new DSL line. Please allow me to be a little bitter, OK? Thanks.

  • dimitris

    Telcos: “Unbundling is baaaad, mmkay?”


    Whatever. In unbundled Europe, I can still buy faster and cheaper DSL than what I can buy in the US. Here’s a juicy example:


    Greece: 10Mbit down/1Mbit up for EUR37.90/month, no volume limits, servers OK. Prices at bottom-left of page for the majority of non-Greek speakers reading this. The 29.90 number is for the non-LLU option, so there are extra telco racket fees in that case.


    Oh, by the way this also includes two phone numbers, using fully PSTN-interconnected VoIP from the same provider. These come with unlimited nationwide calling and “unlimited” (probably some restriction in the fine print) calling to landlines in international destinations including US, Canada, UK etc.


    I’ve also seen numbers like $20/month for 6Mbit DSL connections in Slovakia.


    Of course I’ve seen second hand reports of many more such offers around Europe, but the above is what I remember off the top of my head at the moment.


    So, the telcos say unbundling is bad? Puh-leeeeease.


    PS As I write this, I’m trying to counter the second attempt by my local telco racket (Qwest) to mess up the CLEC installation for my new DSL line. Please allow me to be a little bitter, OK? Thanks.

  • Anonymous

    it’s €, not E

  • Anonymous

    it’s €, not E

  • James Gattuso

    I realize that, but — as an ignorant American — didn’t know where to find that symbol. I did what I could.

  • James Gattuso

    I realize that, but — as an ignorant American — didn’t know where to find that symbol. I did what I could.

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