[rayiner]

European unbundling rules mostly don't apply to cable or fiber, which are the dominant modes of broadband access in the U.S.: http://www.oecd.org/sti/broadband/2-7.pdf.

> There are still problems - e.g. BT is often accused of milking OpenReach rather than investing in the network.

The caveat is perhaps the opposite of what you suggest. Unbundling works okay in the U.K. because BT OpenReach has been allowed to be quite profitable. (Their profits as a percentage of revenue are between TWC and Comcast.) Unbundling in the U.S. failed, in contrast, because the FCC set wholesale rates so low there was basically no incentive to invest in DSL networks.

It's my theory that stuff that works in other countries fails in the U.S. because everyone is so ideological. In the U.K., the privatization of BT was preceded by tons of economic studies analyzing how to balance broadband availability and price against the need to make investing in broadband a profitable endeavor. In the U.S. it's entirely ideological. Pro-business free marketers on one side versus people who see broadband as a social justice issue, economics be damned. We lurch form one mode to the other based on who happens to be in power.

[vidarh]

It mostly does apply to fibre, where the fibre is installed as part of upgrading the dominant carriers network, which is to say: almost always.

Where other providers lay new networks, you're right, it doesn't apply, because when other providers lay new networks it is generally evidence there is an actual competitive situation. In the UK most of the fibre deployment is done by OpenReach, with Virgin Media second, and tiny ISPs focusing on high density urban deployments a distant third onwards.

> The caveat is perhaps the opposite of what you suggest. Unbundling works okay in the U.K. because BT OpenReach has been allowed to be quite profitable.

It works ok but could work much better. The problem today is that there is very limited reason for BT to upgrade. They've had to be dragged kicking and screaming into fibre upgrades, and have been given quite a lot of funding to incentivise it. If the UK had tied BT's ability to take out dividends from OpenReach to the amount invested in infrastructure improvements we could have done much better. In that case I'd even support allowing them to set higher profit margins. As long as it'd be matched with higher investments.

> In the U.S. it's entirely ideological. Pro-business free marketers on one side versus people who see broadband as a social justice issue, economics be damned.

But irony is that the European approach has been much more pro-business and free market than the US approach. The US approach is the one that has ended up with massive regulatory capture, but on behalf of the largest ISPs, where the European approach has centered on isolating and minimizing the un-competitive part of the business as much as possible exactly to ensure there's a free market competing over the rest.