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Wholesale access to telecoms infrastructure: EU consultations on regulation and pricing

Nick Pimlott
11/11/2011

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United Kingdom

Wholesale access to telecoms infrastructure: EU consultations on regulation and pricing

This alert was featured in Tech Bytes, our technology law newsletter.

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Across the EU, national regulators regulate the way that dominant telecoms operators sell access to their networks to other telecoms operators.  The European Commission is concerned about different national approaches in this area and on 3 October launched a pair of consultations on harmonising the rules for access to the infrastructure and services of dominant players by other operators and the method of fixing the prices that those operators will be charged for that access.  Depending on the outcome of the consultations, the Commission could decide to issue guidance in the form of a “Recommendation”. 

As part of their duty to ensure that telecoms markets are competitive, national regulators must assess different communications markets to see whether one or more operators are dominant.  Where there is an operator with “significant market power” national regulators can impose non-discrimination obligations.  Broadly, these obligations ensure that a dominant operator does not treat its competitors any less favourably than it treats its own internal downstream divisions.  Exceptionally, a regulator can force a dominant operator to separate its infrastructure access division from its downstream services divisions.

This “non-discrimination” remedy is defined at a high level in the Access Directive and inevitably there are national differences in its application and enforcement.

The Commission states that regulatory consistency will benefit operators, particularly given the predicted investments in next generation fibre-optic networks and will allow operators to be active in several countries without being subject to varying regulatory regimes.

National regulators also regulate the wholesale prices that dominant operators charge alternative operators for access.   Regulated prices are cost-oriented, but even where different regulators use the same cost model for the same products, there are still wide price differences from one Member State to another.  Dominant owners of telecoms infrastructure have argued that forcing them to allow access to their competitors at fixed prices acts as a disincentive to investing in next generation networks. The consultation pays particular attention to the way that differences in the pricing of access to traditional copper and next generation fibre affects the incentives to invest in next generation networks.

The consultations close on 28 November 2011.

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