Do Prices, Speeds Benefit From Robust Broadband Wholesale Policies?

“Open access” policies—unbundling, bitstream access, collocation requirements, wholesaling, and/or functional separation—have played a core role in the first generation transition to broadband in most countries with high access rates and lower prices, a new study by the Berkman Center for Internet & Society suggests.

The authors suggest the same principles will be important in the next phase of development, where higher speeds must be provided, as well.

The highest prices for the lowest speeds are overwhelmingly offered by firms in the United
States and Canada, all of which inhabit markets structured around “inter-modal” competition—that is, competition between one incumbent owning a telephone system, and one incumbent owning a cable system, the report argues.

The lowest prices and highest speeds are almost all offered by firms in markets where, in
addition to an incumbent telephone company and a cable company, there are also competitors who entered the market, and built their presence, through use of open access facilities, the report says.

The argument, in essence, is that robust wholesale policies contribute meaningfully to providing consumers with faster speeds and lower prices.

There is a logic to the argument which is hard to disagree or agree with in the abstract, since another huge issue is the setting of policy frameworks that encourage robust investment in new broadband networks by private entities.

No policy will be effective, in any particular country, if private capital cannot be raised to build the networks. Conversely, any policy can work so long as adequate capital can be raised.

And though the temptation is to argue about the implications for strong "network neutrality" policies, that is a different issue. The issue here is the same argument national policymakers had when the Telecommunications Act of 1996 was weighed, namely, "what is role for wholesale policies" in setting pro-growth and pro-competititive policies?