Spanish Government to Propose Broadband Access as Universal Service

Following a period of public consultation, the Spanish government has announced that it will start a legislative process which aims at making broadband access—defined as Internet access at a speed of at least one megabyte per second (1 Mbps)—a legal right everywhere in the country from 2011. Once the needed amendments to the current telecoms law have been approved by the parliament, Spain's telecoms regulator CMT will call one or various tenders to mandate the service provision. In case the tender fails, the mandate will be awarded by decree.

Outlook and Implications

• Broadband is the New Telephony: What the Spanish government essentially proposes is to add broadband access—a service that the operators will have to provide—at a regulated price and regardless of the location. As such, broadband will be basically given the same status as fixed-line telephony has had for a long time. Thus far, the current set of universal services have always been delivered by incumbent Telefónica, with other telcos contributing to expenses according to their market share, in order to share the cost of provision in the areas where it would on merely commercial terms be viable. The Spanish initiative is basically another chapter in a European Union (EU)-led drive to speed up the expansion of broadband infrastructure in the rural areas, which is—rather interestingly—happening at the same with a varyingly intense crackdown on Internet privacy by an increasing number of member states. The most effective way of preventing an individual from downloading illegally copied files is to disconnect the involved broadband subscription altogether, yet such practices have stirred a debate whether it is legitimate in the first place to deny something that has been defined as a legal right. (With the obvious counter-argument going that a good many of other rights can—to an extent—be compromised if enjoyed illicitly.) It is worth noting that adding broadband access to the list of universal services is not an argument for or against anything in this debate; it simply about ensuring that the adequate infrastructure will reach every inhabited corner of a country.
• Mobile Broadband the Key for Universal Coverage: IHS Global Insight's view is that the evolution of the universal service concept is—as far as broadband provision goes—largely about formalising something that would be delivered by the market anyhow. If the obligation would concern only fixed broadband, then it could indeed prove quite a regulatory burden for the operators, but since the concept also includes mobile broadband this is not the case. Most notably, in Finland, which in next June will become the first country to do what Spain wants to do now (see Finland – Europe: 15 October 2009: Finland First to Make Broadband Access a Legal Right), the 3G networks have not only complemented but also substituted fixed broadband in many locations, and we expect that it is only a matter of time until the same will happen elsewhere in the EU. In the Finnish case, the key for 3G expansion has namely been the liberalisation of the 900-MHz frequency band—earlier reserved for GSM voice services—for data, which has enabled the carriers to deploy their networks across regions where it with the traditional (2,100 MHz) 3G bands would not be possible. Outside the major cities, this has resulted in 3G offerings with significant price advantage against the fixed variants, pushing more and more subscribers to migrate to mobile broadband and eventually allowing the government to make broadband as a whole a legal right, without any fuss from the operators. The Spanish regulator intends to reallocate the GSM bands within a year, conveniently before the new broadband obligation will come into force (see Spain: 23 October 2009: Yoigo Likely to Be Allowed to Enter Spain's 900-MHz Refarming—Ministry). However, as with Finland, the Spanish government's definition of broadband as 1 Mbps is not very ambitious even today, and it will be much less so in 2011. This will make a case, firstly, for a revision of the universal service regulation fairly shortly after its reinforcement, and secondly, a close scrutiny that operators—which has not exactly excelled anywhere in delivering the advertised 3G speeds—will live up in practice to what has been required by law.