Regulation by authorities promises 20-40 percent reduction in costs of broadband connections

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The cost to consumers of Internet broadband connections will drop in places by 20-40 percent next year, promises Rauni Hagman, director general of the Finnish Communications Regulatory Authority (FICORA). The reason is competition stimulated by prodding from the authorities.
      FICORA has just brought to a close a large-scale regulatory project, which meticulously scrutinised Finnish telecommunication operators to see if any of them had an overwhelming advantage in certain sectors of the market.
      FICORA's project was carried out in compliance with a 2002 EU directive on electronic communications.
      The findings of the project will help FICORA to address the problem with over-priced network charges, through which operators prevent competitors from entering their market areas.
     
"Local telephone companies are the bottleneck that hampers free competition in the broadband market in Finland", Hagman observes.
      There is only one fixed landline network in each area of the country and these networks are controlled by local operators. Outside service-providers are often charged exorbitant prices by these local operators for the use of their network.
      For opening a customer line in a competing operator's network, the service providers are charged in the region of EUR 168, compared with the EU average of EUR 67.
      For local operators' own clients, a typical hook-up price for an ADSL connection is significantly lower, around EUR 50.
      "Thanks to FICORA's intervention, overblown broadband connection prices will come down by 20-40 percent, in some cases by up to 50-60 percent, in the course of next year", Hagman promises.
     
An average monthly line rental of a broadband connection costs in the region of EUR 11.30, which is close to the EU average, though there is a fair bit of regional variation.
      In addition to the line rental itself, operators often add other related charges worth EUR 20-30 to the monthly bill.
      Local operators justify their aggressive competition and selling tactics with the rapidly increasing popularity of broadband connections. "Everyone wants to ensure the largest possible market share", one operator reasons.


Links:
  Finnish Communications Regulatory Authority (Ficora)

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