Commission set to open cable market

Date: 18/09/1997

By Peter Chapman

EUROPEAN Commission telecoms regulators are urging their boss to back moves to boost competition in the EU's monopoly-ridden cable television networks.

The call comes as Competition Commissioner Karel van Miert and his political aides are deciding what form a full-scale review of the cable TV sector will take following an in-depth study by US consultancy Arthur D Little.

As the debate intensifies, senior telecoms officials are pointing to parallels between cable TV and the mobile telephony market, which EU action has already prised open to competition.

“The mobile industry could have had one single company in member states with all the necessary radio stations and infrastructure, with other companies acting only as service providers. It was a substantial breach of their monopolies when we allowed the market to be opened,” said one top official.

The key issue Van Miert must decide is the extent to which telecoms operators such as Deutsche Telekom, with huge cable TV networks, are able to hold on to these assets.

One option is for the Commission to order a full-scale divestment of telecoms operators' cable networks. Another less drastic measure would be to allow firms like Deutsche Telekom to put in place accounting separation measures so that the cable ventures are effectively different enterprises. But this would still leave a lot of cable in the hands of the telecoms companies.

The senior official said a similar lack of competition in the fledgling mobile market in the early 1990s would have held back developments in what is now recognised as one of Europe's most innovative sectors.

“The operators would have put in place GSM, but it would have been much slower. Today, two-thirds of the market is GSM and that would have been unthinkable in a monopoly. People have to accept that competition is achieving something positive overall,” he said.