Bandwidth for all, Peruvian case

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Bandwidth for all, Peruvian case

  1. 1. Bandwidth for all – The Peruvian case Roxana Barrantes Instituto de Estudios Peruanos ACORN/REDECOM (Ciudad de México) (5 de setiembre de 2009)
  2. 2. Content <ul><li>1. What is the need and viability of building an alternate IP backbone network? </li></ul><ul><li>2. What safeguards should be in place to promote fair competition under this scenario? </li></ul><ul><li>3. What institutional conditions are necessary to avoid falling into the same oversights that have caused uneven network development and market inefficiencies in the region? </li></ul>
  3. 3. Current market
  4. 4. Do we need an alternate IP backbone network? <ul><li>In fact, what Peru needs is an IP backbone network! </li></ul><ul><li>Only one backbone along the coast and few kilometers into the highlands. </li></ul><ul><li>Mapa FibraOptica 2006.pdf </li></ul>
  5. 5. TdP’s fiber optic network Brazil Colombia Bolivia Chile Ecuador
  6. 6. Safeguards <ul><li>The efficiency – competition dilemma keeps popping up! </li></ul><ul><ul><li>TdP should not be prevented from participating –that will increase competition for the market but keep retail prices high. </li></ul></ul><ul><ul><li>Regulatory failure is non negligible. </li></ul></ul><ul><li>Given TdP’s position in the Peruvian market, safeguards must be in place. </li></ul><ul><ul><li>Fixed – June 2009: 75% (LIS) </li></ul></ul><ul><ul><li>Mobile – June 2009: 63% (LIS) </li></ul></ul><ul><ul><li>Cable TV – March 2009: 69.5% (subscribers) </li></ul></ul><ul><ul><li>Internet – March 2009: 93.8% (subscribers) </li></ul></ul><ul><li>Which safeguards? </li></ul>
  7. 7. Institutions matter <ul><li>If promoted by the public sector, market design is key. </li></ul><ul><ul><li>What kind of auction? </li></ul></ul><ul><li>Should FITEL money be used? </li></ul><ul><ul><li>If so, what is the correct subsidy amount? </li></ul></ul><ul><li>Regulator to monitor compliance </li></ul><ul><ul><li>What extra powers are needed to be effective? </li></ul></ul><ul><ul><li>Remember, the Peruvian regulator is the competition authority in telecom. </li></ul></ul>
  8. 8. Regulatory model matters <ul><li>Shall we change the regulatory model? </li></ul><ul><ul><li>Regulate networks / Deregulate retail services </li></ul></ul><ul><ul><li>Retailers are not to own networks (physical infrastructure). </li></ul></ul><ul><ul><li>New divestiture! </li></ul></ul><ul><li>Calculate welfare losses from market concentration. </li></ul>
  9. 9. Roxana Barrantes [email_address] Instituto de Estudios Peruanos Horacio Urteaga 694 Teléfonos: (51 1) 332 6194 Fax: (51 1) 332 617399999999 [email_address] www.iep.org.pe

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