Looking Towards Europe: Regulation of Dominance in Nigerian Telecommunications

Abstract

Nigeria is yet to enact generally applicable competition laws. However in the telecommunications sector, sector specific competition rules were enacted with the regulator taking steps including determination of dominance in selected markets to enforce these rules. These developments are important in Nigeria as they could provide good domestic references for future application of both general competition law in Nigeria and sector specific application of competition rules in other network industries in the country. Furthermore with regulatory determinations of dominance relatively rare in the national communications sectors in Africa, Nigerian regulatory decisions are likely to be of interest to operators and regulators in other countries within the West African sub-region specifically and Africa in general.This article critically analyses regulation of dominant positions in the Nigerian telecommunications sector. It identifies the relevant legal provisions on dominant positions in Nigerian telecommunications and shows that while the Nigerian Communications Commission’s (NCC) approach in this area appears to be influenced by European Union (EU) law, the Nigerian rules have developed and are applied in a way different from the application of comparable EU rules. These differences in application manifest in a number of areas. For instance, while the Nigerian Communications Commission’s (NCC) approach in this area appears to be influenced by EU law, the differences between the differentiated sources of rules applicable to market power or dominance in telecommunication markets within EU law when juxtaposed with a common source of applicable rules in Nigeria appear to create problems. This is especially so when NCC appears to be following positions laid down in ex post EU competition case law while implementing a legal framework that is substantially influenced by EU ex ante sector specific regulation. Furthermore, NCC and at least one of the leading operators appear to adopt the view that regulation of dominance should be predicated on a finding of abuse of dominant position. This article argues that a finding of anticompetitive conduct is neither required in the Nigerian legal framework nor a pre-requisite in EU sector specific regulation, for the imposition of obligations on a firm that is in a position of dominance.In addition to these, the article also identifies a need for revision of the applicable regulations to stipulate the basis for market selection and refine criteria for the related concept of identification of the relevant market for purposes of dominance analysis. These steps are necessary not simply because comparable provisions are found in the EU regulatory framework which substantially influenced the development of the Nigerian legal framework; they ensure that identification of relevant markets in Nigeria is in line with international best practice and more accurately reflects local circumstances.The article further identifies specific issues with the NCC’s application of criteria for single dominance assessment. Firstly, there appears to be a misapplication of the market shares criterion. Secondly, on the determination pertaining to the mobile telephone market, the full range of actual competitors was not utilised in the assessment, furthermore very little of the NCC’s assessment is backed by available data and supporting evidence, and the entire assessment focused on application of its six criteria to the retail aspects of the mobile markets with the wholesale market completely ignored contrary to European application of rules from which the Nigerian criteria were derived. Thirdly, the article called for the commission’s adoption of a holistic view to the application of its regulations and recognition of the fact that decisions on dominant positions have important implications for services providers’ access to each other’s networks. With regards to the International Internet Connectivity market, the article argued that the NCC’s decision to rely only on ex-post regulatory intervention in line with the practice in other jurisdictions failed to appreciate the differences in the legal basis for regulatory action between Nigeria and the EU for instance. The EU has separate provisions for sector specific ex ante regulation and general ex-post competition laws, while Nigeria only has sector specific prescriptive regulations governing dominant positions. This entails that reliance only on as yet nonexistence ex-post basis for regulatory intervention would leave Nigerian service providers without a remedy.The manuscript posted here is an author original version of an article that was published in (2013) Competition and Regulation in Network Industries 14(4) 338-364.