Internet, lies and telephony

Despite warnings that Europe has been falling behind in its use and exploitation of information technologies, many policymakers there have been slow to comprehend the full potential of Internet and related developments. Some wish to tax it, while others have yet to realize the substantial impact it will have on many economic sectors or have failed to see the links between telecommunications liberalisation, pricing reform and Internet growth. This article argues that Internet, among other things can provide a transition path for the incremental but demand-driven upgrade of telecommunications local access capacity and speed (in contrast to the earlier narrowband to fibre broadband supply-side vision). It also examines the endogenous relationship between Internet development and telecommunications pricing reform.