EC Public Consultation on NGANs Regulatory Guidelines

European Commission has issued a public consultation for a set of proposals that are aimed to spur competition and encourage the development of FTTH. After the end of the consultation period (mid-Novemeber) the Commission will adapt the comments of the responders to a formal recommendation in 2009. [Press Release available]

Viviane Reding, the Commissioner for Information Society & Media have always tried to unify the regulation framework of Telecommunications in Europe. In this respect, EC announcement attempts to prevent dominant telecommunications companies from recreating monopolies in next generation fiber-optic networks by:

1. setting a risk premium for networks that will unbundle their ducts and fibers. Unofficially, the risk is estimated to be between 8-12% but it is expected to finalize above 12%. However, the announcement does not make reference of a specific figure.
2. describing a pricing methodoloty for calculating the fees that will have to be paid for new services
3. provisioning for bit stream access but only in the case where lower level remedies fail to address distortions of competition
4. pushing for more infrastructure competition (i.e. small companies to deploy their onw networks)

No side shows much of excitement for the proposal:

1. Incumbents argue that the proposal reduce their incentives to invest in NGAN. Their main lobby ETNO (European Telecommunications networks Operators Association) talks about “regulatory pressure” from Brussels.Instead they wish to share the risks of NGANs with the new entrant operators. “Considering that Europe is currently lagging behind other regions in fiber deployment and that investment effort is slowing down, the key focus of the recommendation should be on how to boost risky investment,” said ETNO director Michael Bartholomew.
2. ECTA (European Competitive Telecommunications Association),the Incumbent’s opposition lobby association argues that guaranteeing access to smaller operators is a must
3. NRAs via their association ERG (European Regulators Group) describe the pricing proposal as “overly prescriptive”

Needless it is to state that this proposal confronts already taken actions by at least German and Spanish regulators with both trying to grant some sort of regulation holiday to DT and Telefonica.

Full coverage at: EurActiv,Telecoms.com, Inquirer.net,
Opinions at: CommunicationsDirect News, Financial Times,
Background: EU pushes for high-speed internet for all, EU promises to act on high-speed Internet networks