Editorial: Europe’s consolidation conundrum

El Salvador this week suspended its planned auction of mobile broadband spectrum in the 1.7 GHz and 1.9-2.1 GHz bands. The suspension of this 40 MHz block of spectrum matters for the radio spectrum community as a whole because it reveals a tension at the heart of telecoms policy. What delivers the greatest social benefit: competition or consolidation?

One could argue that El Salvador’s spectrum regulator did not think there was a conflict between the two. On a special part of the website that advertises the auction, the tagline says its objective is to “encourage the development of networks… increase Internet penetration and promote competition in the telecommunications sector.”

The country’s competition authority disagreed, deeming the proposed auction “non-competitive” because larger players would be able to price out smaller competitors.

The tension between consolidation and competition can also be seen in the debate over the European Commission’s draft telecoms regulation. On one side, DG Connect and some trade associations want a more unified market with pan-EU companies even if this means more consolidation. 

On the other, BEREC and some members of the European Parliament believe that promoting competition is absolutely fundamental to a healthy telecoms market and are concerned the Commission’s package could undermine it.

EU member states will discuss the package at the end of this week. If enough of them feel the same way as Neelie Kroes about the prospect of further consolidation in Europe’s telecoms industry, then the legislation may pass before the current European Parliament reaches the end of its term in May 2014.

By this time next week, we should all be a step closer to knowing which vision is likely to prevail.