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ECTA joins in with warnings about European Electronic Communications Code

The European Competitive Telecommunications Association (ECTA) has sent an open letter to the EU to share its concern that the EU’s vision for a connected digital single market “risks being stopped dead in its tracks before it can effectively take off”. The reason, says ECTA, is that connectivity is about to lose its competitive foundation in the negotiations on the proposed European Electronic Communications Code. “The regulatory framework that the proposed code seeks to replace is anchored to the three objectives of promoting competition, the internal market and citizen interests. And within that framework, both innovation and efficient investments in infrastructure are activities that national regulators already today are held to promote when applying regulatory principles in pursuit of these objectives. The draft code adds to these objectives the promotion of access to and uptake of very high capacity (VHC) connectivity. This objective is fully shared by ECTA. The means envisaged to this end, notably to ensure availability of VHC networks, do, however, give serious cause for concern in our view.” ECTA says a political compromise will “undermine existing pro-competitive safeguards and allow arbitrary inroads into competitive market functioning. Most important, it also calls into doubt the premise that competition adequately motivates investment by agreeing that undertakings with significant market power (SMP) need deregulation as an incentive to invest. However, deregulation ignoring SMP to promote co-investment is antithetical to effective and sustainable competition. Indeed, it contradicts the well-established competition law principle that those with special power also bear special responsibility – including for investment in VHC networks… To now create investment incentives for former monopolists through regulatory relief, while threatening competitors with extensive (symmetrical) obligations without regard to their power in the marketplace both upsets the competitive balance and disincentives competitive investment. If you further loosen the definition of VHC networks, this will only reinforce these effects… Just as acceptance of the proposal to replace effective regulation by commitments offered by SMP undertakings only aggravates the resultant competitive imbalance… In sum, if you adopt the code in its current form you absolutely put the competitive fabric of EU electronic communications at risk, and with it access to VHC networks on affordable terms for all European citizens.” ECTA says there is only one guaranteed way forward: preserving the integrity of the SMP regime and it is far preferable to maintain the current framework than to adopt the proposed code. “Otherwise, VHC connectivity may come at a high price indeed, if it comes at all.” See ETNO letter at here and also note that ETNO, the incumbent operators body, has also expressed concern recently that the reform will make matters worse.

  • Monday, 21 May 2018

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