1. IntroductionThe utopian internal market where obstacles to the provision of electronic communications services are eliminated is attractive. Consumers benefit from choice and quality for effectively priced communications services while electronic communications providers enjoy fairer competition and greater legal certainty. EU internal market rhetoric offers much. Electronic communications providers are tantalized by promises of effective free movement, regulatory barrier elimination and fairer competition. True, some success has been achieved. Certain inter-state barriers to market integration have been reduced. But, the current legal framework for pan-European electronic communications networks suffers from serious design defects. Flawed national administrative and regulatory practices continue to frustrate providers, retard competition and fetter competitiveness at national, EU and international levels. Operators continue to face significant obstacles to cross-border electronic communication service provision. Burdensome and defective regulatory frameworks generate legal uncertainty and raise unnecessary costs for business. Inefficient national administrative procedures continue to hinder growth. Europe's regulatory framework for electronic communications is bedeviled by seven deadly sins. Their cost should be assessed financially in terms of provider revenue lost and international competitiveness undermined. On the international stage, the effectiveness of the EU regulatory framework must be measured objectively against the extent to which EU legislation allows, facilitates or even requires Member States to establish and/or maintain dubious regulatory practices at the cost of commercial efficiency. 2. Sin 1: Contemporaneous ex ante regulation & ex post competition management The contemporaneous application to the same sector of ex ante regulation and ex post competition rules is wrong. It breeds legal uncertainty and imposes unnecessary resource burdens on electronic communications providers. It is not fair that undertakings in regulated sectors are obliged to do business while being subject to two sets of competition management requirements, those of the regulators and those of the general competition authorities. When compared to their US counterparts, EU electronic communications providers are at a distinct disadvantage. US sector regulation (as a rule of thumb) precludes application of all anti-trust rules in markets supervised by the national telecommunications regulator. Network and service markets falling within the regulatory competence of the Federal Communications Commission ("FCC") are immune from the enforcement jurisdiction of the competent US anti-trust enforcers, the Department of Justice and the Federal Trade Commission ("FTC"). Under the US Telecommunications Act, 1996 only when the FCC declares a particular market (over which it held regulatory competence) competitive can that market revert to the sphere of competence of the Department of Justice and/or the FTC. FCC regulated providers can allocate resources efficiently to pursue business plans and implement regulatory compliance strategies within the well-defined walls of the applicable telecommunications legislation. US providers enjoy legal certainty. So long as US providers satisfy FCC requirements, they remain insulated from the enforcement activities of the US anti-trust authorities. Ireland (as also the EU) relies on three models to manage competition in the market place: merger regulation, ex ante sector regulation and ex post competition enforcement. Merger regulation is the system providing for ex ante control of market structures by a competent state authority which is designed to prevent or disable the future development of anti-competitive behaviour within those pre-defined market structures. Ex ante sector regulation is the framework for regulation of (anti-) competitive behaviour by a competent state authority according to specific rules pre-defined in legislation and having regard to pre-defined market structures. Ex post competition enforcement is a regime for ex post punishment of anti-competitive behaviour, which has already occurred within relevant market structures defined ex post by a competent state authority. Active in the Irish electronic communications sector at the same time, the Competition Authority enforces national merger rules and ex post competition laws while the EC Commission enforces the 2004 EC Merger Regulation and the Commission for Communications Regulation ("Comreg") supervises the ex ante regulatory framework. Bernstein's well-worn description of the cycle of regulation through birth, growth, maturity and death of a regulator may usefully put the development of the regulatory model for communications into context. There should be a staggered move through sector specific regulation, from state-controlled provision of network and services to the general ex post management of competition between private undertakings by competent competition authorities. Sector specific regulation when enforced must preclude ex post competition management. The central theme of any model for the effective management of competition in the EU's communications sector must be legal certainty. The costs of over-regulation are real for those supervised by more than one regulator. Providers already regulated by national communications regulators must pursue business plans while also looking over their shoulder to avoid prosecution by the ex post competition managers. Application of the EU's 2004 Merger Regulation estops enforcement of general EC and national competition rules. Irish sector specific regulation should also exclude enforcement of the general competition rules until such time as regulated electronic communications markets are deemed competitive by the regulator, as happens in the United States. 3. Sin 2: The imposition of dominance criteria A sector is said to be regulated when the behaviour of its economic operators is managed by an independent body within pre-defined market structures having regard to pre-defined legal obligations with the goal of achieving fair competition in those market structures which sector,...
Seven Deadly Sins Of Electronic Communications Regulation In Ireland
|Author:||Mr Tom Carney|
To continue readingREQUEST YOUR TRIAL