Our Competition Law and Regulation in the Telecoms, Media and Technology Sector conference begins tomorrow. We spoke to Dr Wilhelm Eschweiler, Chair of BEREC, to discuss their relationship with the TMT industry.
What have been the most interesting developments and BEREC projects in telecommunications regulation this year? Why?
Let me start with two major projects making this year an extremely exciting and challenging one for the Body of European Regulators for Electronic Communications, BEREC. They concern net neutrality and International Roaming.
Both projects are stemming from the Telecoms Single Market Regulation endorsed by the European legislator at the end of 2015. They both mandate BEREC with central roles in the further application process of the new provisions.
First of all, BEREC has been tasked to develop guidelines for national regulatory authorities, the NRAs, on the implementation of the new European net neutrality rules ensuring an open internet. Those guidelines are contributing to the consistent application of the net neutrality regulation across Europe providing guidance for NRAs when implementing the rules and assessing specific cases.
In the course of the year, BEREC held dialogue meetings with stakeholders at an early stage discussing the meaning of the provisions on reasonable traffic management, specialized services, transparency measures and commercial practices, including zero-rating.
In the aftermath the draft BEREC guidelines on net neutrality were published and consulted with the stakeholders over the summer time. And I can tell you that I was not the only one among the BEREC people being astonished about the number of contributions. Unprecedented for a BEREC consultation almost half a million submissions reached us stemming from a variety of different stakeholders: civil society, public institutions and independent experts, Internet Service Providers (ISPs), content and application providers and other industry stakeholders. The huge number of submissions received is impressively underlining the importance and sensitivity of the issue at stake and the key role BEREC’s guidelines are playing in this respect.
Secondly, BEREC has been mandated with various tasks in the sensitive and highly politically debated area of International Roaming.
Against this background, BEREC has been actively accompanying the further process after the decision of the European legislators to introduce a “roam like at home” regime by Mid-June 2017.
Therefore, BEREC inter alia has been consulted by the European Commission on the foreseen draft implementing act laying down detailed rules for applying a “fair use policy” and the methodology for assessing sustainability of “roam-like-at-home” services.
At the moment BEREC is preparing within a short timeframe an input paper providing a technical analysis on the European Commission’s proposal to define the mentioned “fair use policy” as preventing anomalous or abusive use beyond periodic travel across Europe.
In its response – published on 13 October – BEREC is once more reiterating the link between the fair use policy, the sustainability of “roam-like-at-home” and the wholesale market illustrating at the same time with a technical analysis the impact of the draft provisions of the European Commission. This includes the risks and effects on end-users, prices, competition, investment etc.
Besides these two projects, another ongoing major project – not limited to this year – will for sure decisively shape the digital future in Europe: the review of the framework for electronic communications.
After the European Commission has tabled its legislative proposals in mid-September 2016 the Telecoms review is now taking off. BEREC has been actively involved in the process from the very beginning. Starting with an extensive opinion issued already in December 2015, BEREC will provide input based on its regulatory expertise to the EU-institutions.
And by the end of this year BEREC will – after a first assessment of the European Commission’s proposals – deliver a first opinion with high level messages evaluating the future directions and measures proposed. BEREC will provide an extensive in-depth analysis of the European Commission’s legislative proposals in 2017.
Are there changes you would like to see with regard to the Telecoms review impacting the regulation of telecommunications? If so, what are they?
At the beginning BEREC conducts a general assessment with a view to the current Telecoms framework before reflecting in some more detail possible future changes impacting the regulation of telecommunications.
We have seen significant evolutions in technology, market structures, consumption patterns and expectations in the Telecoms world since the inception of the last framework in 2009 and witness the establishment of a new digital ecosystem.
The current framework for electronic communications has proven to be a success story – as can be seen from these developments. Decisive factors and key pillars for the successful framework are the future-proof regulatory objectives, the clarity of its regulatory principles and its flexibility. Therefore, we need to ensure the promotion of competition and infrastructure investment as well as high level end-user protection.
And with a view to the special competition law context: The pro-competitive approach as competition is the best driver for investment. It will remain crucial for the future success of the framework to follow down the road of applying well-established competition law principles, especially the significant market power approach with the dominance threshold test.
In the light of the focus on ubiquitous connectivity and the future road to the “Gigabyte Society” I am convinced that one precondition is essential: legal certainty and regulatory predictability to ensure confidence of investors and operators for long-term investment decisions.
In my capacity as BEREC chair this year I have been involved in inspiring discussions with investors several times. And after all I am convinced that – besides a sound business case – it is crucial for any investor to know a stable and predictable regulatory framework in place before investing for example in the roll-out of high speed broadband networks.
Looking ahead the current review process provides a valuable opportunity to re-think necessary changes to the Telecoms review through an evolutionary approach in light of the changing technological and competitive landscape.
Against this background it is inter alia worthwhile to think about a refreshment of the regulatory toolbox in order to ensure that regulators can tackle the challenges and can respond to the fast evolving and diverse market situations in the Member States. For example, greater flexibility with a view to the regulatory toolbox could lead to a re-assessment of the relationship between asymmetric and symmetric regulation in the light of potential local bottlenecks. This could for example take place where a general access obligation on a significant market power operator might no longer be an efficient means to prevent barriers to market entry.
As to the current set-up of BEREC the balance between the European and the national level is right.
However, there is room for improving the operational efficiency of BEREC within the current well-functioning two-tier structure preserving the rootedness of BEREC in its member regulators. Something we might think of is inter alia a simplification of some bureaucratic consultation procedures in the framework.
With an increase in mergers across the telecommunications sector, is there a need and scope for adapting the Regulatory Framework to address non-competitive oligopolies? What do you think we can expect from telecoms in the next twelve months?
The European electronic communications sector has seen the deployment of next generation access networks and technological convergence. However, due to mergers and acquisitions we see the emergence of (potentially) oligopolistic markets.
Furthermore, we see an increased move to supplying bundled services so just a limited number of operators own both fixed and mobile network infrastructures which is beneficial for consumers, but may also have a negative impact on the competitive landscape in the middle to long run possibly requiring ex ante regulation.
And recalling BEREC’s role and strategic pillars – promoting competition and investment, promoting the internal market and empowering and protecting end users – it is absolutely necessary from our perspective to have a competitive environment to achieve and ensure these objectives.
Having said this, the regulatory framework needs to ensure that national regulators are able to address duopoly scenarios. For example, in the situation where they are unable to find a single operator with significant market power in the relevant market but where two players are nonetheless not effectively competing. One crucial area where this could occur is the market for internet access, where duopoly situations (with only two infrastructure based competitors) are more likely to develop.
BEREC has addressed these challenges at an early stage in a comprehensive “Report on oligopoly analysis and regulation” already in December 2015 followed by subsequent work this year. Our report is highlighting the fact that duopolistic/oligopolistic communications markets face a high risk of evolving in a non-competitive manner and are less likely to support efficient and sustainable competition. This is well described with the buzzword “two are not enough”.
Against this background, BEREC’s report has identified several possible options for adapting the framework regarding the regulatory treatment of oligopolies, including potential market indicators of non-competitive oligopolies. And looking ahead BEREC is carrying out further work on this topic especially in light of the ongoing Telecoms review process including the consideration of possible practical approaches to address these concerns.
Which panels are you most looking forward to at the IBC TMT conference this year?
I have to confess that a straight forward answer to this question is rather challenging as the IBC TMT Conference 2016 is providing as usually a highly interesting agenda with a huge variety of different topics and aspects at the heart of current debates in the field of regulation and competition.
However, seen from a BEREC perspective with a regulatory focus I am obviously very much interested and keen to follow the panel on “European Telecoms markets and regulatory developments”.
Furthermore, I am very eager to listen to the presentation on net neutrality especially against the background of the above mentioned recent BEREC guidelines in this area.
In addition, the panel dealing with recent mergers is surely something I am very into it with a view to the above outlined BEREC work and impact on oligopolies with a view to electronic communications markets.
Finally, it will be certainly interesting and inspiring to follow overarching topics and developments mirrored and embedded in different panels and presentations of the Conference such as the Internet of Things and Big Data and the change in market dynamics these important developments will have.
