The Internet Before the wave of inflation

The Internet Before the wave of inflation

Price release for A1 could mean price increase for all Austrians […]

While inflation was already close to 6% in February anyway, since the Russian invasion of Ukraine, skyrocketing energy prices have also been added, and rising wheat prices are worrying many people. Now the Internet in Austria is also facing a wave of inflation. Specifically: the Internet providers are expected to increase the tariffs in the foreseeable future – but not voluntarily. Because there is a deregulation of A1 Telekom Austria, which should lead to higher prices for all others.

The background: Most Internet providers have to use the existing Internet lines of A1, because it is often not possible to set up their own infrastructure. As a result, A1 enjoys a de facto monopoly position in large parts of Austria and has so far had to make it available to other providers at regulated prices, similar to electricity and gas networks.

ISPA President Harald Kapper: “Affordable Internet is a basic need – price release would be paid by end customers”

Whether A1 continues to have this monopoly position is reviewed every five years by the competent regulatory authority, the Telekom Control Commission (TKK). Surprisingly, a report by the authority came to the conclusion that A1 would no longer have a dominant position in parts of Austria, especially in the big cities. This is also justified by the fact that there was already sufficient competition from mobile broadband. This ignores the fact that mobile broadband cannot technically meet the increased demands of home office and video streaming, among other things, and thus fails as a real compensation on the market. A second report published last week therefore even proposes deregulation across Austria, i.e. A1 will then massively increase the prices for the use of its infrastructure by other providers throughout Austria, as their new draft contracts show.

“Of course, the Internet providers cannot work at a loss and must then pass on these prices to their customers,” explains Harald Kapper, President of ISPA. “Affordable Internet access is a basic need for many people today. In recent years, we have seen what this means: exchange with family and friends, access to vital information and, last but not least, hundreds of thousands of workplaces in the home office. Deregulation is not an end in itself. Giving A1 a free hand as a quasi-monopolist in large parts of Austria ultimately only means more profits for A1, to the detriment of domestic small and medium-sized enterprises and paid for by end customers. The construction of this infrastructure was originally paid for by the state, so the citizens are asked to pay twice here! We therefore demand that the TKK act in the interests of the customers and that A1 remains regulated.“

*ISPA – Internet Service Providers Austria is the umbrella organization of the Austrian Internet industry. It was founded in 1997 as a registered association and represents around 220 members from the areas of access, content and services, among others, to politics, administration and other bodies. The aim of ISPA is the promotion of the Internet and the communication of market participants with each other.

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