EU Regulatory Framework for electronic communications

Regulatory Framework

• The EU Regulatory Framework for electronic communications networks and services is currently Directive 2002/21/EC, specific Directives 2002/19/EC, 2002/20/EC, 2002/22/EC, and Regulation (EU) No 531/2012.
• Article 15 of Directive 2002/21/EC states, NRAs should take utmost account of both the Commission Recommendation 2014/710/EU and the SMP Guidelines.
• Article 15(2) of the Framework Directive stipulates directives for market analysis.
• The SMP Guidelines outline principles applied by national regulatory authorities (NRAs) for analysis of markets and significant market power (SMP).
• Article 16(1) of the Framework Directive states NRAs should take utmost account of the SMP Guidelines when carrying out an analysis of relevant markets.
• Article 14(2) of the Framework Directive states an undertaking has SMP if it enjoys a position equivalent to dominance, with the power to behave independently of competitors, customers, and consumers.
• The definition of SMP corresponds to the dominant position definition ascribed to Court of Justice of the European Union case-law.
• Article 102 of the Treaty on the Functioning of the European Union (TFEU) states NRAs should act in accordance with EU law and consider SMP Guidelines when assessing joint dominant positions.
• SMP Guidelines serve as a key instrument for NRAs in market analysis under the Framework.
• SMP Guidelines in 2002 have been a fundamental instrument in ensuring consistent market analysis since the start of the Framework.
• The SMP Guidelines are based on relevant jurisprudence of the CJEU concerning market definition and Article 102 TFEU.

Developments in Electronic Communications

• The present review of SMP Guidelines considers over 15 years of NRAs' and Commission's regulatory experience from the 2002 Guidelines.
• Guidance related to ex ante regulation is given, given the increased convergence of the electronic communications sector.
• Increased demand for retail broadband bundles puts pressure on electronic communications operators to be able to supply bundled retail solutions
• The role of NRAs is to ensure alternative operators can benefit from access and are sourcing relevant inputs which fall within the scope of the Framework.
• Regulatory measures since 2002 resulted in increased competition retail level and enabled alternative operators to complement network investments.
• Alternative operators have rolled out mostly in urban areas because this duct access is conducive to infrastructure competition.
• Alternative infrastructures can be reduced, because infrastructure can exist in the tubes or pipes already created.
• More local fibre initiatives were carried out in collaboration with governments or businesses.
• Copper upgrades resulted in local access products which act as a functional substitute to the traditional physical unbundling solutions.
• Technical developments make it increasingly possible to supply wholesale broadband solutions over cable networks.
• The incumbent either upgrades copper networks or races to invest in fibre to the premises where economic conditions favour this.
• Greater infrastructure competition of various types exists due to the fact network landscape varies both within and between countries (fibre).
• Necessary investments to build future-proof networks in the EU need a stable regulatory framework that is based on the SMP regime.

Stakeholder Feedback

• Public review of 2002 SMP Guidelines ran to gather feedback on the need to update all individual sections and procedural issues.
• Fifty-four stakeholders provided their views to the Commission.
• These participants included the Body of European Regulators for Electronic Communications (BEREC), five NRAs, industry associations, as well as one individual.
• The majority considered there did not require a major review based on competition law principles for method of market defintion.
• Commission guidance was requested on Over-the-Top players (OTTs) and the definition of bundle markets, both at retail and wholesale level.

Structure of the Guidelines

• The Revised SMP Guidelines exclusively focus on market definition, single and joint SMP.
• Unlike the 2002 SMP Guidelines; they do not include imposition, maintenance, amendment or withdrawal or regulatory obligations, powers of investigation and cooperation procedures and publication of proposed NRA decisions.
• The SMP Guidelines do not deal with co-ordination and/or collusion, nor do they address limited player market structures.

Regulatory Principles

• As set out by the article, NRA's have to conduct forward looking evaluation of the relevant wholesale market over the relevant period.
• The NRA should assess specific market characteristics and market developments to determine competitive nature in absence of wholesale regulation.
• NRAs should take into account existing market conditions, expected and foreseeable market developments in the absence of regulation.
• In conjunction with the "Modified Greenfield Approach"
• Market sector-specific regulation, decisions, and legislation in retail and wholesale market(s) should be considered during the next review.
• The relevant period should reflect the specific characteristics of the market over the next review by the NRA.
• The NRA should conclude the regulation is no longer needed at wholesale level if a market is prospectively competitive.
• The upstream wholesale market should be analyzed first when markets are vertically linked.
• NRA should start from with recent and old data that is relevant to developments in the market for the forseeable future.
• Readily avaiable data should be considered over any readily available data that already exists.
• Past market practice is relevant in determining future actions unless the characteristics have changed.
• Static and dynamic considerations with clear evidence should be reflected in market analysis to address market failures at a retail level.
• This should promote competition and the development of the internal market to the benefit of consumers.
• Regulation should be in accordance with the Framework Directive.

Market Definition

• Regulatory intervention should be sufficient to tackle the downstream markets
• This analysis should come from the functional understanding of the relationships between retail and wholesale markets.
• The retail market conditions may give NRAs an idea of wholesale market but can't determine SMP.
• It is not necessary to prove SMP at retail level in order to establish the wholesale market.
• The Commission should also analyze market power and boundaries across wholesale market to determine whether its effects are competitive.
• The direct and indirect competitive constraints should be looked as perspective from the end-users.
• Newly emerging markets should not be subject to regulation.
• Need for more careful assessment in the markets led that undertaking should be prevented
• Guidelines continue to be made in legal competition
• The adoption of the line should make the adaption be new to ensure full adoption or public consultation must be made.
• Market defintion is a tool to the boundaries between undertakings.
• Aim of the market is to systematically identify a competitive constraint that the undertakings are facing in the market
• Objective is to identify potentially SMP holding, those who can change undertaking behaviors of competition.
• If not they are consider to be independent against the competitors and consumers.
• Exactime Horizon should be identified by market and national circimstances.

Product Market Definition

• New frameworks have been set is that retail and wholesale markets are being longer consider
• Process is by understanding substitutability of product and analysis.
• Assess 2 needs of competitive traits = demand & supply substitutability.
• There is a change between competition that supplies increase rapidly without costs.
• Potential competition has more time increase more significant costs
• Market sectors with both direct and indirect restraints.
• Direct competition arises from whoelsale level
• Indirect constraints by retail demand supply
• Assess supply by seeing if they supplier are those offering or switched.
• One of the assessing supply is the application of hypothetical monopolist which is known as the SSNIP test (non transitory price)
• Asseses increase approx price that will customer may switch price towards substitute price for their price. The increase will determine the losses caused the price would not increase at all. If there is no increase, prices are under the same marketing. This requires the NRA.
• Must be competitive
• Cellophane
• Functionality of the analysis

Innovation and Technological Convergence

• These technological changes are impacting correct the delineation on the market/
• This convergence is using same infrastructure to produce multiple services.
• In short fibre is important and needed to have retail & mobile services.
• 5G is a great example of such development and synergies
• This in turn reduces supply chain, and impacts the analysis of supply side submission
• OTT services compete between some retail services. OTT operators over-the-top services have gained importance partial communication.

Bundiling of Services and Products

• Convergence is leading to products and services that has combine content or internet access by combining telephones.
• This is demand from customers using packages same operators have that flat fee that they may often use.
• Bundle is a bundle with telephony and standard services for many years
• Quad with mobile interent exist as retail services.
• They should look forward it will effect marketing
• To from bundles it cannot be taken apart and are separate. The majority of customers to switch a competitive product is not beneficial and profitable, this is because of what customers have to pay.

Relationship between Relevant, Retail, and Wholesale Markets

• The markets have demonstrated that is no more of the ex anti regulations.
• Customers will find this difficult in a retail atmosphere of regulatory intervention.
• Therefore SMP regulations should all start with analysis access to the markets is necessary to address it there cannot be
• Wholesale markets provide wholesale imputs market/vice versa
• Do not find find SMP at retail if something at the reatail level should be found.
• A forzen position at market level where identify how must can be at a top level to take care of it.
• If there are not asufficient interventions should find more down the supply chains
• Virtual verses access

Inter-Platform Markets

• Due to the fact retail has increased.
• Equivalnce at level and over cabable
• Look services for price so buyers can get what they can.
• Networks such as SSNIP is very important in assessing factors etc that be considered. The instance what set.
• Should consider realistic perspective has access services.
• It needs possible due to a standard

Inclusion of Self-Supply

• Due to the fact regulation whether its warrant the account is frequent in both markets.
• If something occurs such as the incumbrent operator has a hard time. There are other aspects that can occur.
• Market the services that are common the supply be can all the products has they are the same product market to external market.
• In cases where there is to substitutability and customers it will need to considered for delineation
• The same with the Strategic operator. Alternate operator should be assessed when the networks
• Sufficiently large are difficult
• Relevant to if 3rd party is supplied
• the the more proper or networks to also taken for proper assess to appropriate remedies

Chain of Sustitution

• Markets expand
• Substitability as the same products that prices
• Similiar concept is that one is broad technolocigal product are in the market with new stuff that should be relevant
• For to find how things should work
• If things are up to par networks not is where or where things will change

Geograpic Market Definition

• Geographic
• Not not
• National
• One must consider what this means
• Additional structural needs to have occur

Assessing Market Power

• Under Framework Directive
• Dominance in economics, meaning all actions be independent to consumers