ECTA Regulatory Conference 2006
State of Implementation of the Regulatory Framework
An Industry (Alternative Operator) Perspective
(the 10-minute version)
Yves Blondeel, T-REGSOverview
1. Introduction: key objective of EU regulatory framework = competition 2. Primary legislation
3. Secondary regulations
4. Discussion of clusters of wholesale & retail markets (planned/skipped) 5. A few words on:
• consumer triple/quadruple (double quadruple) play
• business services
6. Alternative operators’ sentiment and messages to EU institutions 7. Q&A and discussion
Objectives of the Framework
Success of the EU regulatory framework should be
assessed on the basis of real results, i.e. achievement of the objectives set out in Art 8 of the Framework Directive From an alternative operator’s self-interested perspective
(but clearly supported by the phrasing of the Directive), the primary objective is the promotion of competition (Art 8.2) Examining the transposition process, primary legislation,
secondary regulations, infringement proceedings, and the list in the Recommendation on Relevant Markets, is there substantive evidence of:
– Promotion of competition? (evidence…) – Increased competition? (a little evidence…)
Primary Legislation
All Member States transposed Directives (achieved 2006; deadline was mid-2003)
For alternative operators, the issue is maltransposition
– Distinguishing ‘accidental’ and ‘deliberate’ maltransposition – Distinguishing ‘trivial’ and ‘serious’ maltransposition
• EC/ECJ must address all cases, but focus is needed on:
– NRA powers to carry out mandate under EU directives
• SMP analyses must cover ANY market with issues, no restrictions • Full menu of remedies must be available to NRA without restrictions • Ability for NRA to define alternative ‘remedies’ without restrictions
– Effective appeals system
• Who has right to appeal? (not only SMP operator)
• Appeals role attributed in some cases to ill-equipped entities • Delays incompatible with dynamic telecommunications industry
Secondary Regulations
Many Member States still lack elementary secondary regulations
and/or effectively implemented remedies (often cut&paste Access Dir)
(3 ½ years after implementation deadline)
For alternative operators, the issue is effectiveness
– Deregulation where sustainable, targeted regulation where needed
EC/ECJ must address all cases, but focus is needed on:
– Numbering (VoIP numbering regulations conflicting with Directives)
– Number portability (availability, procedures, costs, avoid barrier to entry) – Rights-of-way (availability, procedures, non-discrimination, fees)
– Carrying out market analysis, i.e. really putting it into practice
• In spite of 500+ notifications, the 1st round is still NOT complete… • Remedies are still often merely theoretical / cut & paste
• In many Member States, awaiting approval of reference offers, definition of cost-accounting systems/cost-models, margin-squeeze tests, timeframes for wholesale product launch, timeframes for migration processes, etc. (e.g. WLR) • Issues being ignored (consumer triple/+quadruple play+, Ethernet for business)
Consumer triple/quad market
What would be the market situation in the absence of regulation? (wholesale & retail)
What would be the market situation if network-independent VoIP could develop on a pan-European or global basis if the current obstacles were removed? Is voice still a stand-alone product in a triple/double quad play environment? Quid market definitions?
Consumer triple/quad market
What has been done (where it was effectively done)?
¾ Retail access: regulation maintained or reinforced (prohibition on unfair bundling) ¾ Retail calls: status-quo or phasing-out of regulation (price-caps going out of fashion) ¾ Wholesale (voice) access: regulation reinforced (WLR – theory vs practice)
¾ Wholesale termination: regulation reinforced (altnets benefit more often than not) ¾ Wholesale transit: regulation maintained or slightly phased out
¾ Wholesale local loop unbundling: regulation reinforced (‘no brainer’?)
¾ Wholesale broadband access: regulation reinforced (but… bitstream for IPTV…??) ¾ Retail TV market: no assessment except NL
Retail Network-independent VoIP
Regulatory classification
PATS vs ECS vs Information Society Service Æ major implications, including
Obligations to provide access to emergency services (Correct) routing of emergency calls
Consumer protection regulations Number portability
In spite of European Commission (June 2004) and European Regulators’ Group statements (Feb 2005) Æ Total lack of harmonisation of legislation, regulations, and of EU regulators’ positions, except for PC-to-PC only VoIP
Numbering regulations
Total lack of harmonisation of regulators’ positions
Some allow use of geographic numbers, including for nomadic VoIP Some created special non-geographic number ranges for nomadic VoIP
Economic regulation
VoIP inside or outside relevant retail markets for access and calls? Lack of harmonisation of regulators’ positions (objective factors in play)
M I S S E D O P P O R T U N I T Y M I S S E D O P P O R T U N I T Y
Business services market
What would be the market situation in the absence of regulation? (wholesale & retail)
What would be the market situation if xDSL and Ethernet access were recognised as substitutes of traditional
interface leased lines? Quid market definitions?
Business services market
What has been done (where it was effectively done)?
¾ Retail leased lines: regulation largely focused on defunct ‘minimum set’ with (but buoyant market of retail xDSL / Ethernet replacements)
¾ Wholesale leased line terminating segments: regulation reinforced, but 2 (5?) out of 25 Member States recognised Ethernet as the essential new access product
¾ Wholesale leased line trunk segments: divergent and confused market definitions, SMP dependent on market definition (ranging from 12 network points per country to 5500 network points per country)
Alternative Operators’ Messages (1)
Informal pressure by Commission on Member States canbe effective (rarely for intentional maltransposition) Opening formal proceedings by Commission can be
effective and has led to Member States addressing
problems (rarely for intentional maltransposition, doubtful about effect in case of absence of secondary regulations or absence of market analyses)
Less than 10 ECJ decisions on infringement proceedings; simply not enough to give a strong signal and to yield real effect
EC/ECJ should focus on ‘the market enabling/structuring issues’, not on the ‘easy wins’.
Alternative Operators’ Messages (2)
Single-minded focus by EU institutions remains needed to ensure that national legislation/regulation is in place that enables the achievement of effective competition on all levels of the value chain for electronic communications networks and services
Member States / NRAs have been instructed by
Commission to conduct market analyses, but little pressure has been exerted to ensure that the market analyses
result, where SMP is found, in effective (rather than theoretical) regulatory interventions
This single-minded focus should not be distracted by the 2006 Reviews (however important these are)
Q&A and Discussion
Yves Blondeel, T-REGS
Telecoms Regulatory Expertise Europe Z.1 Research Park 310, B-1731 Zellik, Belgium
Tel +32 2 463 1889, Fax +32 2 463 2329 [email protected]
