In the UK, unbundling has had a very limited effect on pricing when compared to straight-up nationalisation.
Excluding Virgin's cable service, the last-mile infrastructure is wholly owned by BT Wholesale which, despite the name, is "independent" of BT Retail. It's operations are heavily bounded by legislation and politics - it is, in effect, a public corporation. So tied down are they, in fact, that they have a flat price list for almost all customers. Pricing innovation is precisely nil. I've have a copy from two years ago, but I'm under NDA wrt specifics.
(Note that none of the above is a criticism, the idea of letting them free to do what they want is horrifying.)
The result of this is strange to observe from an economists vantage point. On the one hand you can catch a glimpse of what perfect competition might look like in the consumer market as a thousand companies vie to maximise market share with an almost perfectly commoditised good, which in reality means packaging (with TV, phone, mobile, insurance, pretty much anything.)
Aaand on the other hand most of the country is paying £30/month ($50) for 6Mbps down/0.2Mbps up at 50:1 contention and a fair usage policy to boot.
Of course this is much better than straight up nationalisation as the private companies will at least innovate on peripheral services like billing and support, and will use a stronger punch when it comes to motivating BT Wholesale to stay on their toes.
Is this better than the US situation? Most probably. Is this the ideal solution? Most probably not.
I have a 152Mbps connection from Virgin which is around the same price, and am now in a super-exclusive club of Brits who get to moan about not being able so saturate a servers pipe (I want my downloads to read 18MBps every time, dammit!)
Excellent summary of the UK situation, although I'd say most people are paying quite a bit less than £30/m for their broadband service (or are you including line-rental in that?)
The other part of the regulatory environment here that's worth mentioning is the "MAC-code" system which makes it relatively straightforward to switch ISPs. The ease with which customers can vote with their feet is a major part of what keeps (most) retail ISPs competitive.
> In the UK, unbundling has had a very limited effect on pricing when compared to straight-up nationalisation.
This may well be, but unbundling itself has had a very large impact on competition and prices. Currently the cheapest broadband plan including line rent is about £10 from plus.net. Not many countries can compete with that and no country without unbundling comes even close.
Excluding Virgin's cable service, the last-mile infrastructure is wholly owned by BT Wholesale which, despite the name, is "independent" of BT Retail. It's operations are heavily bounded by legislation and politics - it is, in effect, a public corporation. So tied down are they, in fact, that they have a flat price list for almost all customers. Pricing innovation is precisely nil. I've have a copy from two years ago, but I'm under NDA wrt specifics.
(Note that none of the above is a criticism, the idea of letting them free to do what they want is horrifying.)
The result of this is strange to observe from an economists vantage point. On the one hand you can catch a glimpse of what perfect competition might look like in the consumer market as a thousand companies vie to maximise market share with an almost perfectly commoditised good, which in reality means packaging (with TV, phone, mobile, insurance, pretty much anything.)
Aaand on the other hand most of the country is paying £30/month ($50) for 6Mbps down/0.2Mbps up at 50:1 contention and a fair usage policy to boot.
Of course this is much better than straight up nationalisation as the private companies will at least innovate on peripheral services like billing and support, and will use a stronger punch when it comes to motivating BT Wholesale to stay on their toes.
Is this better than the US situation? Most probably. Is this the ideal solution? Most probably not.
I have a 152Mbps connection from Virgin which is around the same price, and am now in a super-exclusive club of Brits who get to moan about not being able so saturate a servers pipe (I want my downloads to read 18MBps every time, dammit!)