Study predicts broadband rise in Europe. (Newsline: for the latest industry developments).

The demand for high-speed Internet access in Europe will increase, but more competition is needed among local telephone providers if consumers want better broadband technology, according to a recent study by research firm Frost & Sullivan.

The firm predicts that the number of broadband

subscribers in Western Europe will grow from 3.8 million at the end of 2001 to 28.1 million in 2008. The study also predicts that as the telecom slump softens and home-office workers' telecommuting increases, the need for broadband will pick up in 2003. Demand will also increase as Internet surfers see the value of broadband-specific services such as video-on-demand, VPNs (virtual private networks), home networking and voice-over-DSL, the study said.

However, the report also notes that more competition is needed in the local telephone market to encourage carriers to upgrade their networks, and give better broadband technology to Internet surfers.

"The European Commission cites three key reasons why competition is making such slow progress in the European broadband market," Frost & Sullivan Analyst David Tait wrote in the report. "This includes incumbent telcos exploiting first-mover advantage, predatory pricing and regulatory delaying tactics."

Established carriers have used their weight to bury or stifle the efforts of competitors, which hinders the market and impedes technology advancement, an issue that also confronts carriers and regulators in the United States.

Tait points out that cities can build optical fiber networks that are run by independent operators, which provide equal network access for all broadband providers. He also urges governments to become more involved in building Europe's broadband infrastructure in rural and under-served markets through tax incentives to carriers, an idea that the U.S. Congress has debated as well.

But some analysts believe the debate remains open as to whether more government involvement will help broadband adoption in the United States. "One of the things we learned in the last five years is that competition is a much better driver of broadband than regulation," said Legg Mason, analyst for Blair Levin.