> Basically, the government forced local loop unbundling, so that the phone companies were required to lease space in their equipment centers to competing ISPs at fair prices and give them access to local loops to offer DSL and other services.
Similar idea was implemented in Poland. It mostly means that you can now get the same crappy DSL connection from a number of providers instead of the single (formerly national) telecom. The quality probably did increase a little, and it is fairly affordable but I don't know a single person who's genuinely happy with that sort of Internet access. Most live in suburbs or outright rural areas and have no choice (the other options are flaky mobile, or expensive and high-latency satellite link).
Only real competition leads to improved quality. In large cities where you have properly separate providers -- cable companies, local area networks, mobile providers and the large telcos -- actually competing, you can get a decent TV package, phone with a local number, DVR, 10+MBit (and going as high as 120MBit) connection and maybe even mobile Internet dongle thrown in for ~$40.
Many European cities lack a cable TV infrastructure, preventing the use of faster DOCSIS connections like in the US. On the other hand, digging the densely populated European cities to install extensive optical fibre networks terminating either to buildings or local cabinets (with the remaining loop length being under 300 metres) is an extremely costly affair.
For those cases ADSL over PSTN is the only practical choice for broadband Internet access, but since the incumbent telephone operator (usually an ex-state owned company) owns the entirety of the PST network and related facilities like exchanges (subsided over the decades by the state, directly or indirectly) that puts other providers at a huge disadvantage, being unable to even offer any service.
That's why the LLU scheme was devised. Providers rent the telephone loop, rack-space and in some cases backhaul connectivity at the incumbent's exchange, install their own DSLAMs and provide both telephone and ADSL service. It's the only practical choice for competition in the ISP field. And at least for my country, Greece, it has worked marvelously with prices racing to the bottom and speeds jumping to the maximum of the protocol ever since the LLU scheme started.
Small steps are being made in many cities where fibre-optic networks are slowly being deployed, usually (and in our case) subsided by EU funds and planned to be offered under a scheme similar to LLU but it's a very long time until population (as opposed to geographical) coverage can reach good levels.
> On the other hand, digging the densely populated European cities to install extensive optical fibre networks terminating either to buildings or local cabinets (with the remaining loop length being under 300 metres) is an extremely costly affair.
In Stockholm, the city-owned company Stokab has been doing exactly this for the past 15 years or so. They started out by laying fibre in the inner city and leasing it to businesses. They've been pretty profitable, and reinvesting all their profits into extending their network, moving to less and less profitable areas.
The last year or so they've started connecting every apartment building in the entire city, suburbs and all, and they'll be done in a year or so with that. They hooked up my building last month, for free. And then it's up to us in the coop to pick an ISP and connect each apartment.
They were also smart enough to put in one fibre per apartment, so in some not-too-distant future, it should be possible to upgrade the building LAN to fibre, which means that every apartment gets an unbroken fibre all the way to their connection point. And that in turn enables the same business model as we have with DSL now, i.e. each apartment can freely choose ISP, and different ISP can then compete for the privilege of lighting up my fibre and give me internet.
Digging up suburbs to lay down fibre is extremely costly as you say, but renting that out is extremely profitable.
Similar idea was implemented in Poland. It mostly means that you can now get the same crappy DSL connection from a number of providers instead of the single (formerly national) telecom. The quality probably did increase a little, and it is fairly affordable but I don't know a single person who's genuinely happy with that sort of Internet access. Most live in suburbs or outright rural areas and have no choice (the other options are flaky mobile, or expensive and high-latency satellite link).
Only real competition leads to improved quality. In large cities where you have properly separate providers -- cable companies, local area networks, mobile providers and the large telcos -- actually competing, you can get a decent TV package, phone with a local number, DVR, 10+MBit (and going as high as 120MBit) connection and maybe even mobile Internet dongle thrown in for ~$40.