Flexibility in the European telecommunications industry
| Pages | 397-409 |
| Date | 14 August 2017 |
| Published date | 14 August 2017 |
| DOI | https://doi.org/10.1108/DPRG-04-2017-0016 |
| Author | Vitor Miguel Ribeiro |
| Subject Matter | Information & knowledge management,Information management & governance,Information policy |
Flexibility in the European
telecommunications industry
Vitor Miguel Ribeiro
Vitor Miguel Ribeiro is
based at ANACOM,
Lisboa, Portugal and at
University of Aveiro,
Aveiro, Portugal.
Abstract
Purpose –The purpose of this paper is to expose the necessity of introducing some degree of flexibility
in the definition of wholesale access price of FTTx, in the EU competition regulatory framework, and
incorporating new regulatory actions to boost investment substitutability to ensure that NRAs
accomplish dynamic and/or static efficiency targets.
Design/methodology/approach –Given the European historical context, the current preponderance
of cable and the strong heterogeneity in NGA networks rollout across Europe, a policy-oriented analysis
defines a set of recommendations useful for member states whose NGA networks market is in a more
advanced state of development.
Findings –Flexibility is necessary in jurisdictions holding a highly competitive NGA wholesale market at the
three previously described levels to avoid that strong dynamic efficiency is passed-through into excessive
retail prices which may decrease static efficiency in greater proportion, thereby generating a deadweight
loss.
Originality/value –The novel measures pointed out are part of the on-going debate concerning the
revision of the European regulatory framework for NGA networks.
Keywords Flexibility, Telecommunications, Access price regulation, Cost-based regulation, Retail-
minus regulation
Paper type Research paper
1. Introduction
A recent report released by the Body of European Regulators for Electronic
Communications BEREC (2016) identifies as key drivers behind networks rollout in Europe:
intensity of infrastructure competition, preponderance of demand-side factors and
prevalence of supply-side mechanisms. Implicit in the BEREC’s argument, regulatory
policy seems to be currently influenced by market forces, given the recognition that NGA
drivers are largely exogenous to sector-specific actions of National Regulatory Authorities
(NRAs). Consequently, a “new regulatory paradigm” may prevail in the Big and Available
Data (BAD) era: regulators may regulate without explicit intervention, and short-term
adjustments to market-specific conditions may become common knowledge.
A different opinion is deduced from the recent proposal of the European Commission (EC),
given the recognition that the current European Union (EU) competition regulatory
framework appears to fulfil the interests of the European citizens (EC, 2016a).
Motivated by this dichotomy, three questions are tackled. First, how far will markets 3a (market
of wholesale local access at a fixed location) and 3b (market of wholesale central access at a
fixed location for mass-market products) require access price regulation? Second, if required,
what form should it take? Third, are there any other forms of flexibility needed?
The paper is structured as follows. Section 2 provides an overview of the context
responsible for the current status of the European telecommunications industry. Section 3
Received 31 January 2017
Revised 15 April 2017
Accepted 2 June 2017
DOI 10.1108/DPRG-04-2017-0016 VOL. 19 NO. 5 2017, pp. 397-409, © Emerald Publishing Limited, ISSN 2398-5038 DIGITAL POLICY, REGULATION AND GOVERNANCE PAGE 397
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