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Table 3. Utilisation of LLU (As of September, 2008)
Ratio among
Total Lines
Dry Copper
Line-Sharing
Total
Number of
Metallic
lines
June,
2004
Sept,
2008
June,
2004
Sept,
2008
June,
2004
Sept,
2008
2004
2008
Number of lines
7,580 1,448,407
6,270 3,635,323
13,850 5,083,730
21,035,169
0.1
24.2
U.K.
Distribution(%)
54.7
28.5
45.3
71.5
Number of lines
650,000 7,900,000
0
100,000 650,000 8,000,000
29,200,000
2.2
27.4
Ger-
many
Distribution(%)
100.0
98.8
0.0
1.3
Number of lines
13,066 4,574,000
711,754 1,434,000 724,820 6,008,000
21,000,000
3.5
28.6
France
Distribution(%)
1.8
76.1
98.2
23.9
Source Calculated from ECTA (2009)
only when conduct regulation is deemed insuf-
ficient in securing fair competition (ERG (2007)).
It clearly opposed the introduction of structural
separation with ownership unbundling.
Some countries including France and Spain
rejected the introduction of functional separation
in their own countries and the German Ministry
of Economics and Technologies is against the
introduction of functional separation. However,
Sweden and Italy have introduced functional
separation.
Thus the attitude toward structural separation
varies from country to country. This is a reflection
of the fact that the costs and benefits analysis of
structural separation has remained abstract and
it has not been proved that benefits exceed costs
(OECD (2003)). Although OPTA, the Dutch
regulatory authority, suggested steps to evaluate
structural separation based on a survey of academic
studies (OPTA (2006)), it has not yet made a
proposal for actual evaluation. Here, I should like
to point out the fact that although the utilisation
level of LLU in the U.K. that adopted functional
separation is catching up to the level of France
and Germany (Table3), it is not demonstrated that
the introduction of structural separation on top
of conduct regulation is effective in promoting
competition. The recent discussions on structural
separation in the EU are a reflection of the slow
development of broadband and the reliance on
ADSL that is offered on POTS facilities.
The Japanese Broadband Market
The distinction between local and long-distance
services disappeared with the diffusion of broad-
band based on new technologies, so that now
we can only distinguish between access and
the network. Thus the discussions on structural
separation have now moved on to the treatment
of access division of incumbents in Japan.
The Japanese broadband market started to grow
in 2000 when the line-sharing and co-location
obligation was introduced 8 . As the line-sharing
charges were set very low (Table 4), service-
based new entry was encouraged. Softbank Corp.,
the largest new entry in the broadband market,
deployed aggressive marketing strategies based
on low price. As a result, Japan has been leading
the world broadband market in terms of price
and speed.
FTTx in Japan started to grow replacing ADSL.
Two NTT local companies and subsidiaries of
electric power companies are competing on the
facilities base in the FTTx market. They decreased
the retail price of FTTx to compete with Softbank's
cheap ADSL. As a result the number of users of
FTTx exceeded that of ADSL in the first quarter
of 2008 (Figure 2) and Japan is the first in the
 
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