Regulatory Framework For Electronic Communications Research Articles

Future-Proof Regulation against the Test of Time: The Evolution of European Telecommunications Regulation.

Regulation is sometimes designed to be future-proof, so that it can adapt to changing economic and technological realities. The EU (and UK) Regulatory Framework for electronic communications was expressly crafted to be able to adjust to the evolution of the industry. This article considers how well the regime has stood the test of time and, based on this analysis, what lessons can be drawn for regulation more generally. It appears that, by and large, the Framework has effectively accompanied the transformation of telecommunications in Europe. On the other hand, the EU legislature's commitment to future-proof intervention has waned over time. Every new review of the regime has represented a move away from the philosophy and mechanisms conceived to ensure that regulation would adapt seamlessly to industry shifts. This experience suggests that the failure or success of future-proof intervention primarily hinges on the intertemporal consistency of legislatures.

Regulation of Telecommunications: The Choice Between Market and Regulatory Failures

Abstract
 The paper examines the main regulatory frameworks of the telecommunications industry through the concept of market failure and analyses how and why the policy often leads to undesirable outcomes that might be considered as regulatory failure. The research uses the EU regulatory framework for electronic communications as a base for the analysis of the main policy objectives through the prism of the market failure theory with an eye to the interests of the main market players in the telecommunications markets. About any aspect of regulation allows to find ways to create opportunities for some groups of the industry and stifle activity of others. Despite the theory of market failure provides reasonable justifications for regulation of telecommunications markets, it is possible to argue that many of these problems are mainly the consequence of the policy and could be better solved by market mechanisms. The results of the research allow to look at the problems of telecommunications development and issues of the high level of concentration of the telecommunications markets as regulatory formed problems rather than consequences of the inherited industry’s characteristics.

154. PROTECTION AND PROMOTION OF THE END USERS’ RIGHTS OF PUBLIC ELECTRONIC COMMUNICATION SERVICES IN THE REPUBLIC OF MACEDONIA

Telecommunications are one of the fastest growing information and communication technology (ICT) industries in the world. Republic of Macedonia follows this trend and the growing development of the electronic communications services market has led to the initiation of a need for greater protection of consumers rights and promotion of the quality of services. Due to the lack of information about their rights, users are often subject to manipulation and abuse by providers of electronic communication services. The users of electronic communications services should be protected from the unfair practices of the companies that provide these services. Therefore, the EU has specific policies to protect consumers of telecommunications services, which include the right to free access to services and fair prices, and protection of the privacy of personal data. The EU Regulatory Framework for Electronic Communications is a series of rules that apply in the EU Member States. They encourage competition, improve market functioning and guarantee the basic rights of the user. The main goal is for European consumers to benefit from market liberalization that results in low prices, high quality and innovation in services. The results presented in this paper lead to a conclusion that by specifying the legal regulation in Macedonia and the mutual cooperation with the bodies that take care of the consumers rights in the field of electronic communications will contribute to faster, cost-effective legal procedures that will strengthen the legal safety of consumers.

Incentives for Investment in Fast Broadband: How Much Can Be Expected from the Proposed European Code?

In September 2016, the European Commission presented legislative proposals to replace the European Regulatory Framework for Electronic Communications (RFEC) with a new European Electronic Communications Code. Among the many stated objectives was to stimulate more rapid investment in fast and ultra-fast broadband. One can argue that the RFEC was put in place in 2002, at a time when networks were not yet liberalised or privatised, and when investment needs of existing copper networks were fairly consistent and predictable. As a consequence, the RFEC put great emphasis on achieving competition, relatively little on achieving investment. This reflects to some extent a preference for optimisation of static efficiency over dynamic efficiency, which was perhaps in order given that the former is far easier to analyse than the latter. In this paper, we review the regulatory instruments that provided in the European Code, and consider based on the economic literature, publicly available statistics, and our own analysis the degree to which the Action Lines in the proposed European Code are likely (individually or collectively) to contribute to increased investment in fast broadband in practice. Our assessment is that the proposed enhancements to broadband policy in the proposed European Code are broadly in the right direction, and collectively are likely to offer network operators a more profitable and predictable business case for investment in high speed broadband. Notwithstanding our observations that the case for FTTP/FTTP can often be significantly overblown, we would still say that this is a welcome or overdue change. The risks implied by insufficient specification of these provisions in the European Code, and the lack of clarity as regards technological neutrality, are however significant. We would hope that these provisions can be sharpened in the course of the legislative process.

Regulation of Telecommunications: The Choice Between Market and Regulatory Failures

Purpose – The paper examines the main regulatory frameworks of the telecommunications industry through the concept of market failure and analyses how and why the policy often leads to undesirable outcomes that might be considered as regulatory failure.
 Methodology/approach/design – The research uses the EU regulatory framework for electronic communications as a base for the analysis of the main policy objectives through the prism of the market failure theory with an eye to the interests of the main market players in the telecommunications markets.
 Findings – About any aspect of regulation allows to find ways to create opportunities for some groups of the industry and stifle activity of others. Despite the theory of market failure provides reasonable justifications for regulation of telecommunications markets, it is possible to argue that many of these problems are mainly the consequence of the policy and could be better solved by market mechanisms.
 Originality/value – The results of the research allow to look at the problems of telecommunications development and issues of the high level of concentration of the telecommunications markets as regulatory formed problems rather than consequences of the inherited industry’s characteristics.

Cultural Diversity in the Digital Age: EU Competences, Policies and Regulations for Diverse Audiovisual and Online Content

Cultural diversity is a multifaceted concept that differs from the notion of media pluralism. However, the two concepts share important concerns particularly as regards content production, content distribution and access to content. This chapter considers the EU’s role in contributing to diverse audiovisual and online content and assesses its limits.Although a signatory of the UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions, the ability of the EU to foster cultural diversity in the digital environment is confined on account of its constrained competences in the field of audiovisual media and online content. Notwithstanding, the EU develops a number of substantive policies that benefit the creation and circulation of cultural content either in an explicit or in an implicit manner. Following a value-chain approach, this chapter discusses the complementary role of various EU sectoral regulations towards this aim. The analysis focuses on the Audiovisual Media Services (AVMS) Directive (Directive 2007/65/EC – 2010/13/EU) and various aspects of the EU regulatory framework for electronic communications, particularly in relation to non-discriminatory access to bottlenecks in the distribution infrastructure and online platforms.The chapter advances the argument that existing EU policies have an important role to play for ensuring the free circulation of, and access to, cultural content. At the same time, aside from the cultural quotas in the above mentioned AVMS Directive, EU activity is less prominent in the field of content production. The analysis concludes by stressing the complexity of promoting cultural diversity in light of both cultural content supply and demand considerations. It also emphasises the importance of emerging policy issues, in particular net neutrality and findability.

Measuring the impact of market competition analysis process in EU׳s electronic communications sector: Catalyst or impediment towards market competition?

It has been a few years since the European Commission introduced the Common Regulatory Framework for Electronic Communications according to which all Member States are required to conduct market analysis in the relevant electronic communication markets and apply appropriate ex ante regulatory obligations in the case where competition was not at a satisfactory level. One of the main motivations behind the Commission׳s introduction of the Framework was the promotion of competition in electronic communications sector in regard to the welfare of EU citizens and the creation of a common market for electronic communications. Notwithstanding the fact that the telecommunications market has opened and new operators with new service offerings have emerged, a lot of criticism has been voiced regarding the Framework׳s effectiveness on several fronts (e.g. infrastructure based competition, wholesale/retail costs, uniform market structure across Europe). The paper takes another look at the implementation of the current Regulatory Framework and the ex ante remedies imposed across Member States. The implementation of the Framework is related to the evolution and competition of the fixed narrowband, fixed broadband and mobile group of markets, using indicators for an empirical discussion of the market analysis process in the EU. It uses data derived mainly from the European Commission itself and calculates indices that paint a clearer picture with respect to the evolution and competition in the above group of markets. Based on this process, the paper provides very strong indications that the current Regulatory Framework and in particular the market analysis process promotes competition both at wholesale and retail level. Finally, the paper suggests that the decision to remove market 15 from the list of markets susceptible for ex ante regulation should be revisited.

The Evolution of the European Regulatory Framework for Electronic Communications

The paper reviews the historical transformation of the European regulatory framework for electronic communications from the era dominated by state-owned enterprises to the presence of regulated competition. In the course of these developments, the vision of the roles of the public and private sectors in electronic communications changed in expected and unexpected ways. While the period is characterized by a shift toward less direct state intervention, the intensity of regulation has increased in many areas. Most recently, in the wake of the financial crisis, new forms of state intervention can be observed, including public investment in communications infrastructure and public-private partnerships. As a result of the reforms, Europe has been able to achieve major successes but it also suffered unanticipated setbacks compared to other regions. The European Union emerged as the global leader in mobile communications during the 1990s and was able to roll-out first-generation broadband access networks more rapidly than many of its peers. Recently, however, Europe as a whole has not performed as well in deploying next-generation networks and advanced mobile communications services. The paper offers a political-economic explanation for these developments and assesses their effects on the performance of the European electronic communications sector and the economy. From this analysis, the European model emerges as a unique institutional arrangement with peculiar advantages and disadvantages. Once these are recognized, sensible next steps to build the strengths while avoiding the weaknesses of the model can be seen more clearly.

Authorised Shared Access (ASA): An Innovative Model of Pro-Competitive Spectrum Management

ASA is a regulatory framework that allows for licensed sharing of underutilised spectrum by a limited number of rights holders through an individual authorisation scheme. There is significant momentum for ASA can be implemented rapidly in Europe under the existing EU regulatory framework for electronic communications, taking advantage of actual technological options and meeting the rise of mobile broadband that is posing new challenges to Administrations worldwide. Through ASA, Europe has the opportunity to take the lead and to explore new paths of optimal spectrum exploitation, reaping the benefits of the mobile internet revolution for industry and consumers in Europe and globally.

A Regulatory Framework for Dealing with Online Copyright Infringement (OCI)

Countries around the world are debating ways to better limit online copyright infringement (OCI) without unduly harming Internet freedoms. Courts and policymakers have focused so far on the substantive rights that must be balanced before implementing any measure to limit OCI: Are users' privacy rights preserved? Will the mechanism hurt freedom of expression? Is the measure too costly for Internet intermediaries to implement? Are users' procedural rights protected? Will the measure have other undesirable side effects on innovation and the Internet ecosystem? Relatively little attention has been paid to institutional and regulatory aspects, and in particular whether lawmakers could entrust a regulatory authority with the task of balancing these competing interests. In the UK and France, lawmakers have entrusted an independent regulatory authority with tasks associated with limiting OCI. In the United States, a private organization, the Center for Copyright Information (CCI), has assumed a quasi-regulatory role modelled after the French HADOPI. Even the Librarian of Congress, via its jailbreaking rules, plays a role affecting OCI. If we were to imagine an regulatory framework for dealing with OCI, what would it look like? The paper examines several existing regulatory approaches for OCI, as well as the European regulatory framework for electronic communications, and attempts to propose an regulatory model. The paper argues that a proper application of the proportionality test for OCI measures requires a dynamic and forward-looking approach, and that a regulatory authority is best placed to do this. Finding the right balance in a given situation requires technical expertise, a close observation of the market and frequent updating of regulatory solutions as markets evolve. The framework requires that the regulatory authority use a light touch, but that the authority have a full set of tools at its disposal and be able to reach all kinds of Internet intermediaries. The regulatory authority should give preference to voluntary stakeholder solutions and impose mandatory measures only as a last resort. The paper proposes three bodies of rules that would form the basis for the regulatory framework, and concludes by mentioning obstacles that may make the ideal model difficult to implement.

The need for a new approach to regulating fixed networks

The increasing danger of excess capacity in the regulated fixed networks calls into question the established long-standing pricing standards for wholesale services based on forward-looking long-run incremental costs (FL-LRAIC). Within the EU “Regulatory Framework for Electronic Communications and Services”, the FL-LRAIC standard has worked quite well in expanding markets, although even there price-squeeze problems have appeared. In contracting markets the price-squeeze issue, however, becomes paramount and lower prices both at the wholesale and retail levels would be efficient. Because both expansion and contraction could be relevant in the future, this paper suggests an optional approach based on the wholesale price formula p=min{ FL- LRAIC, Retail- Minus} with an optional replacement of per-minute charges by capacity-based access charges (CBC). This will generally protect alternative competitors against price-squeeze while at the same time allowing the fixed-network incumbent full downward price flexibility. It also protects alternative competitors and end users against excessively high prices.

Legal Analysis of Network Neutrality under EU Competition Rules and the Regulatory Framework for Electronic Communications

Network neutrality refers to a policy principle regarding access for online content and service providers to broadband infrastructure. It implies a general and ex ante obligation of non-discrimination for network operators when granting access to providers of online services, with the aim of excluding practices such as blocking access to non-affiliated content, degrading the quality of transmission, imposing unreasonable restrictions or prioritizing affiliated content. Whether such obligation should be anchored in regulation was first fiercely debated in the United States, and the issue is now gaining increased attention in other parts of the world, including the European Union, where the regulatory framework for electronic communications is currently under review. This article examines whether existing rules already provide the competent authorities with the necessary tools to take action against broadband providers discriminating or blocking content of those who are not prepared to pay a toll for the use of higher speed networks or better quality services. And if not, should the regulatory framework be adapted accordingly? It looks at both competition rules and the 2003 regulatory framework for electronic communications networks and services, including the legislative proposals published by the European Commission on November 13, 2007 and the discussions currently taking place in the European Parliament.

The State of Information Security Law: A Focus on the Key Legal Trends

Information security is rapidly emerging as one of the most critical legal issues facing companies today. Concerns regarding corporate governance, individual privacy, accountability for financial i...

Regulatory Approaches to NGNs: An International Comparison

The emergence of Next Generation Networks (NGNs) raises profound challenges for regulators everywhere. Different regulatory authorities have approached these problems in strikingly different ways, depending in part on the overall regulatory milieu in which they operate, and in part on the nature of the NGN migration envisioned by major market players. Also, the NGN core network raises significantly different issues from those of the NGN access network. The migration to NGN raises many of the same issues that were already on the table as a result of the broader migration to IP-based services, notably in regard to the de-coupling of the service from the underlying network. To these concerns are added profound questions related to the nature of market power. Will NGNs enable new forms of competition? Will competitive bottlenecks remain, especially in the last mile? Will NGN enable new forms of bottlenecks to emerge, especially in the upper layers of the network, perhaps as a result of new IMS capabilities? Regulators in the UK, Netherlands, Germany, Japan and the United States have been forced to deal with these issues due to relatively rapid migration to NGNs proposed by their respective incumbent telecoms operators. Many of the same issues are also visible in the recommendations that the European Commission finalised on 13 November 2007 as part of the ongoing review of the European regulatory framework for electronic communications. In this paper, we compare and contrast the many regulatory proceedings that have been produced by these regulatory authorities.

Legal Issues in Wireless Building Automation: an EU Perspective

Wireless building automation solutions promise to revolutionize home and commercial building management where fast deployment, increased building efficiency and optimal occupant comfort and convenience are top priorities. The ability to support people and/or device mobility, easy building reconfiguration, data, voice and video applications plus emerging indoor location-based services will unlock their future success. Wireless building automation systems are still at an early stage of development; however, as more and more building functions and applications are controlled electronically and wirelessly, constant occupant surveillance, tracking, personal profiling and security breaches, would raise deep concerns about the survival of privacy. Building privacy and security in the initial design should ensure that all necessary or required controls exist to protect access to and dissemination of personal information over the wireless building automation network. The applicability of the new EU regulatory framework for electronic communications and services will depend on the legal qualification of the network and services: private, public or a mixture of both.

Regulating the Digital Television Infrastructure in the EU. Room for Citizenship Interests?

This article argues that the regulation of the DTV infrastructure cannot be limited to economic concerns and that it must also address citizenship values. The analysis focuses on the regulatory framework for electronic communications (eCommunications) in the European Union, with a particular emphasis on the control of bottleneck facilities. The argument for bringing public policy considerations under the European framework on eCommunications faces major difficulties. This could be achieved only in the long term and is dependent on the shaping of the European democratic dimension and on a greater supranational competence in matters such as pluralism and diversity in the communications sector. Under the current framework, public policy concerns in the communications sector are gradually forgotten, while the regulators are giving in to commercial pressures. The maintenance of the status quo commits the protection of citizenship values to an uncertain future and, unless we are prepared to look beyond economic interests in eCommunications, the commodification of the public will become an irreversible aspect of a market-dominated reality.

European competition law in the electronic communications sector: evolution and critical analysis

Following a preparatory process that lasted about ten years, on January 1, 1998, the telecommunication services market was completely liberalised in most European Union countries. It was obvious that in the telecommunications industry, competition could not be quickly established simply by knocking down the legal obstacles. As a result, the first regulatory framework tried to meticulously “conduct” the development of competition in the market. Nevertheless, this scheme evolved along with technology and market competition development. A new regulatory framework for electronic communications was approved in 2002; its main objective is the rapprochement of sectorial regulation towards general Competition Law, based on an ex post intervention.

Innovation and Market Definition under the EU Regulatory Framework for Electronic Communications

This article provides a thorough analysis of market definition under the EU regulatory framework for electronic communications. Part I questions the implementation of the forward-looking approach to market definition in the context of the fast innovation process driving the electronic communications sector. Section I.A argues that demand-side substitution must address the competitive constraints imposed by the emerging services. Section I.B stresses that supply-side substitution is becoming a criterion increasingly relevant to delineate market boundaries given the convergence process in the communications industry. Section I.C points out that, in assessing supply substitution, regulators are required to take into account the likelihood of potential competitors to enter the market within a reasonable time frame. Accordingly, it is argued that potential competition must be addressed in defining the market (and not subsequently when assessing market power) whenever the financial ability and the profitability for potential competitors entering the market is established. Part II illustrates the challenges posed to market definitions by the rapid pace of innovation as the regulation of the emerging Voice over Internet Protocol (``VoIP’’) services comes under the EU policy spotlight. Section II.A argues that VoIP services put at risk the present definition of the relevant markets. In particular, regulators should carefully consider whether Voice over Broadband (``VoB’’) services are substitutable for traditional telephony. Section II.B stresses that addressing the constraints imposed by the substitutable VoIP services at the stage of the market definition is necessary to conduct a consistent market analysis and accurately apply ex ante regulation, especially given the development of bundling strategies. This article has been shortlisted for the 1st World Competition Young Writer Award.

Defining Markets for Ex Ante Regulation using the Hypothetical Monopoly Test

The EU is gradually systematizing its approach to ex ante regulation (notably with the publication of the recent regulatory framework for Electronic communications). Market definition is viewed as an essential first step in this, with the ‘Hypothetical Monopoly Test’ a useful conceptual tool for use in the assessment. This paper examines the use of this test for market definition when there are several differentiated goods or services under consideration. It sets out an analytic framework, discusses the pros and cons of using the test and illustrates its use in a Telecom context.

The ERG Common Position on Remedies under the New Regulatory Framework for Electronic Communications: An Economist's Perspective

The recently published ERG Common Position on remedies under the new regulatory framework for electronic communications has been received by many observers and industry actors as a very intricate and at times impenetrable document. However, while clearly being very dense, it is a particularly important contribution to the evolution of the new framework, as well as of regulatory policy in general. This is true not only because it provides a common reference tool for regulators, but also because, by drawing at the same time on their experience and on economic analysis, it builds a much needed bridge between the two. This paper offers an interpretation of the main concepts behind the document and attempts to clarify the reasons why it can be of great support in the process of harmonising regulatory intervention across the EU.