On June 25, 2008, EU Commissioner Vivianne Reding addressed the annual conference of European Competitive Telecommunications Association (ECTA) in Brussels.The main messages of her speech were:
* The technological and economic developments paving the way for high-speed broadband networks have the potential to increase competition to the benefit of consumers. But they can also lead to new bottlenecks and re-monopolisation of end user markets.
* A key element in my vision for Next Generation Access (NGA) regulation is to ensure that all parties, entrants or incumbents have sufficient incentives to move in these markets.
* Regulatory restraint as a carte blanche for incumbents to re-monopolise markets where the buds of competition are flourishing is not a policy option if we want competitive markets.
* It is very important that the conditions to invest exist and regulatory certainty is one of those conditions. Today, the regulatory landscape in Europe is unfortunately heavily fragmented in this respect.
* Regulatory guidance by the Commission is therefore required and appropriate in order to foster investments and maintain competition between infrastructure networks and service providers in the broadband area.
* In the forthcoming Commission Recommendation on Next Generation Access, the Commission intends to ensure consistency of regulatory approaches by establishing three principles of NGA regulation for the next 5 years:
First of all, access regulation which has been imposed in the past on dominant network operators will be continued, extended and if necessary reinforced also in case of a switch by the dominant player to a next generation network. Technological change should not, in itself, lead to a change of the regulatory rules in place.
Secondly, we want to encourage investment into next generation access networks by a stable and predictable regulatory environment. We are still discussing the final details of this in the Commission, but I believe that the best way for encouraging long-term investment is to establish a priori a number of principles that national regulators should take into account when regulating access prices with regard to next generation access networks. In my personal view, these should include a risk premium of around 15 per cent.
Thirdly, we must manage the transition from the system of measures applicable to SMP operators [= operators with significant market power] to tomorrow's next generation access measures. We have to recognise that the "ladder of investment" that has brought us to unbundled local loops will in the future have to adapt to the different end-to-end network architecture. Alternative operators will increasingly be given an incentive to roll out their own infrastructure closer to the customer. Or, where this is not feasible, will have to go back to bitstream remedies. In order to manage this transition in a predictable fashion for both SMP operators and alternative network operators, regulators must impose transparency obligations on SMP operators so that they cannot use these 'informational asymmetries' to thwart or delay alternative infrastructure investments or to destroy the competitive potential of alternative players.
EU Commissioner Reding concluded: "A competitive race to invest is the best way to ensure timely investment in next generation networks. I believe such a race to invest can happen even where there is currently only one infrastructure so long as adequate access is given to passive infrastructures. But I also believe that the geographic reach of competing infrastructures is likely to be limited and so access regulation in other forms will need to continue in this case.
Competitive operators have served Europe well in the past and a vibrant, competitive market is what Europe needs if it is to continue to prosper and deliver on its promise".
Blog Posting Number: 1140
Tags: telecommunications, broadband, Next Generation Access
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