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Give us a break, Cable Europe tells regulators, claiming that consolidation is good for society

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Manuel Kohnstamm, President of Cable Europe and the SVP and Chief Corporate Affairs Officer at Liberty Global, has called for European governments and regulators to look favourably on cable industry consolidation, effectively accusing some of them of standing in the way of progress. He noted how the growth of companies like Liberty Global has been good for consumers and also good for Europe, helping the European Commission meet its digital objectives.

Cable Europe supports efforts by the EC to streamline the regulatory regime around telecommunications but is frustrated by what Kohnstamm says are “the mixed levels of support and appreciation among European governments.” Worse, the cable advocacy organisation says some national regulators seem to question the principles that regulators should stand back as soon as markets have sufficient competition and that they should use the least invasive tools possible.

“Until now the burden of proof has been on regulators to demonstrate the need to intervene but some people believe this burden should be reversed,” Kohnstamm told Cable Congress 2017, the annual gathering of the cable industry, which this year is in Brussels. He is concerned that regulators are being given a blank cheque, and that their attitudes will prevent consolidation and lead to “further balkanisation” of the European telecoms market.

He complained that terms like ‘oligopoly’ are used as a form of abuse. “There is a view that big companies dominate at the expense of the consumer. That is not what we see here in Europe. Hundreds of smaller challengers are finally consolidating to become a real match for the former telecom incumbents.”

The cable industry has used this conference to outline its Euro-citizen credentials in the past, helping to drive broadband speeds ever higher (and far more effectively than telos, who cannot match the DOCSIS 3.0 and DOCSIS 3.1 enabled capability of HFC with their DSL, and who can only achieve ultra-fast broadband with the additional cost of digging fibre).

Kohnstamm committed the cable industry to partnering with the EU in its “bold goal” of achieving at least 1Gbps of connectivity into all European homes by 2025. He pointed out how fragmented the European telecoms market is compared to the U.S. or China, and emphasised how important scale is for innovation in this industry. He said progress towards that scale is painfully slow compared to the speed of change in the Internet age. He complained that it often takes cable and telecoms companies a year to get even small mergers and acquisitions approved.

Kohnstamm thinks Europe should take a leaf from the FCC book. He referred to the speech that new FCC Chairman Ajit Pai made to Mobile World Congress last month when he said America’s approach to broadband policy will be practical, not ideological. Kohnstamm quoted this passage:

“That means removing barriers to innovation and investment instead of creating new ones. That means taking targeted action to address real problems in the marketplace instead of imposing broad, pre-emptive regulations. And that means respecting principles of economics, physics, and law and acting with humility as we regulate one of the most dynamic marketplaces history has ever known.”

Later in the conference, Dr Manuel Cubero, CEO at Kabel Deutschland and the CCO for Vodafone Germany, noted the fantastic experience from the consolidations his company has been involved with in Spain and Germany. “We believe in consolidation – cable to cable and mobile with fixed, and especially mobile with cable. It works very well.”

Cubero thinks mobile/fixed consolidation has particular benefits to society due to the synergies that it creates. “We need scale and we are true believers that this benefits Vodafone customers,” he said.

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