Philippe Defraigne

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IMPLEMENTATION OF THE EU TELECOM
FRAMEWORK INTERNATIONAL CONFERENCE OF DEPUTIES
OF EU CANDIDATE COUNTRIES Warsaw September
26, 2003
Philippe Defraigne Cullen International phil.defra
igne_at_cullen-international.com
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Timely implementation
Timely, effective and coherent implementation
of the new regulatory framework for electronic
communications by July 2003 European Council
of March 2003
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Transposition into national law
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Transposition into national law
Accession countries joining in May 2004
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Transposition into national law
Accession countries joining in 2007 and Turkey
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Market analysis
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1998 vs. 2003

• ? Western Europe
• ? 1998 big bang
• ? 2003 long term effects
• Central and Eastern Europe
• ? A bit of both?

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Who is regulated?
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What is regulated?
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Managing expectations
Was the new package hyped just like .com stocks
and 3G auctions? Over-emphasis was placed by the
Commission on the idea of  a lighter regime  in
order to sell the package. Furthermore, the new
package is not a prerequisite for deregulation
(e.g. double transit charges have been removed
from FTs RIO)
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Extension of regulation why?

• ? Technological developments
• ? Mobile
• ? Internet
• ? Broadband
• ? Incumbent operators market shares

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Wholesale remedies
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Retail remedies CS/CPS

• Operators with SMP in market for
•  the provision of connection to and use of the
  public fixed telephone network  must provide
• ? CS
• ? CPS
• (Art. 19 Universal Directive)

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Retail remedies price control
IF a given retail market is NOT competitive AND
Access remedies CS/CPS obligations AND
Objectives (Art.8 Fwk Dir) NOT achieved THEN
additional remedies at retail level (Univ.
Service Directive Art 17 Price Control)
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Retail remedies price control
additional remedies at retail level ? No
excessive or predatory prices ? Not to
discriminate certain end-user groups ? Not to
unreasonably bundle services ? To comply with
price caps ? To comply with other NRA measures
to - control individual tariffs - to orient
tariffs towards costs or prices on comparable
markets.
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Retail leased lines
IF market for minimum set of leased lines is NOT
effectively competitive THEN obligations imposed
on operators with SMP ? Non discrimination ?
Cost-orientation ? Transparency (Technical
Tariffs Supply)
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CL and SSR
Competition Law ? abuse of dominant position
(Art. 82) Sector Specific Regulation ?
creation of a competitive environment
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CL and SSR
Competition Law ? trigger for action is the
abuse Sector Specific Regulation ? trigger
for action is the Dominant Position
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CL and SSR

• SSR borrows CL concepts
• SMP Dominant Position
• methodology for market definition
• methodology for SMP designation
• CL has NOT superceded SSR

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Bronner case ECJ Nov 1998
Facts of the case Refusal by a major newspaper
publisher (Mediaprint) to give access to its home
delivery service to a smaller rival newspaper
(Oscar Bronner) Question is it abuse of
dominant position?
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Bronner case ECJ Nov 1998
Court ruling The refusal by a press
undertaking which holds a very large share of the
daily newspaper market in a Member State and
operates the only nationwide newspaper
home-delivery scheme in that M.S. to allow the
publisher of a rival newspaper, which by reason
of its small circulation is unable either alone
or in cooperation with other publishers to set up
and operate its own home-delivery scheme in
economically reasonable conditions, to have
access to that scheme for appropriate
remuneration does not constitute the abuse of a
dominant position
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Bronner case ECJ Nov 1998

• Court reasoning Three cumulative conditions need
  to be fulfilled before there is abuse of dominant
  position
• the refusal should be likely to eliminate all
  competition in the daily newspaper market on the
  part of the person requesting the service
• the refusal could not be objectively justified
• the delivery service should be indispensable to
  carrying on that persons business inasmuch as
  there is no actual or potential substitute for
  that home-delivery scheme.

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SSR goes beyond CL
but whats the limit? Two dangers ? NRAs do
not provide new entrants with sufficient
support to enter the market ? NRAs encourage
inefficient market entry.
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Harmonisation versus Subsidiarity

• Different level of justification for a harmonised
  approach
• Liberalisation
• Rolling out of Pan-European networks
• Harmonised level of protection for users
• Most efficient regulation (in the EU opinion)

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Harmonised objectives?
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