Bandwidth for all – The Peruvian case

Diálogo Regional sobre Sociedad de la Información

Bandwidth for all – The Peruvian Bandwidth for all – The Peruvian casecase

Roxana BarrantesRoxana Barrantes

Instituto de Estudios PeruanosInstituto de Estudios Peruanos

ACORN/REDECOM (Ciudad de México)ACORN/REDECOM (Ciudad de México)

(5 de setiembre de 2009)(5 de setiembre de 2009)

Content

1. What is the need and viability of building an alternate IP backbone network?

2. What safeguards should be in place to promote fair competition under this scenario?

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?

Current market

Do we need an alternate IP backbone network?

In fact, what Peru needs is an IP backbone network! Only one backbone along the coast and few kilometers

into the highlands. Mapa FibraOptica 2006.pdf

TdP’s fiber optic

network

Brazil

Colombia

Bolivia

Chile

Ecuador

Safeguards

The efficiency – competition dilemma keeps popping up! TdP should not be prevented from participating –that will

increase competition for the market but keep retail prices high.

Regulatory failure is non negligible.

Given TdP’s position in the Peruvian market, safeguards

must be in place.– Fixed – June 2009: 75% (LIS) – Mobile – June 2009: 63% (LIS)– Cable TV – March 2009: 69.5% (subscribers)– Internet – March 2009: 93.8% (subscribers)

Which safeguards?

Institutions matter

If promoted by the public sector, market design is key.

What kind of auction?

Should FITEL money be used?

If so, what is the correct subsidy amount?

Regulator to monitor compliance

What extra powers are needed to be effective?

Remember, the Peruvian regulator is the competition authority in

telecom.

Regulatory model matters

Shall we change the regulatory model?

Regulate networks / Deregulate retail services

Retailers are not to own networks (physical infrastructure).

New divestiture!

Calculate welfare losses from market concentration.

Diálogo Regional sobre Sociedad de la Información

Horacio Urteaga 694Jesús María, Lima - PERU

Teléfonos: ( 51-1) 3326194 / 4244856Fax: (51-1) 3326173

info@dirsi.net www.dirsi.net

Roxana Barrantesroxbarrantes@iep.org.pe

Instituto de Estudios Peruanos

Horacio Urteaga 694Teléfonos: (51 1) 332 6194

Fax: (51 1) 332 617399999999

roxbarrantes@iep.org.pewww.iep.org.pe