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• W2257730694 abstract "Many Europeans incumbents and some alternative operators are starting to plan and in some cases deploy large scale fibre investments, resulting in significative changes for European fixed line markets. The technologies used and the pace of development vary from country to country according to existing networks and local factors. Currently, the incumbents’ preferred choice is FTTCab (fiber to the street cabinet) while the alternative operators’ choice is FTTH (fiber to the home), bypassing completely the incumbent’s network. The outcome of this battle is difficult to predict but the transition from broadband to very high-speed broadband will have definitely important consequences for industry, operators, local governments as well as the competitiveness of our nations.The 12th Implementation Report on European Electronic Communications Regulation and Markets 2006 emphasizes the enduring positive results from the European Regulatory Framework in terms of competition, investment (Europe invested in 2006 more than 47 billion euro, more in absolute terms than either the US or Japan), broadband penetration (7 European countries are ahead of the USA in broadband penetration and Denmark & the Netherlands are ahead of Korea, world leader in broadband) with resulting benefits to consumers in terms of prices and innovative converged services.However, European incumbent operators are asking for new rules to be able to recover their investments in next generation networks and regulators are concerned that the new infrastructures may create new monopolies at the access level3. As suggested in Williamson (2007) there are two reasons why the investment in Next Generation Access Networks (NGAN) is particularly risky: 1) These networks require a large up-front investment ahead of demand rather than incrementally in response to demand; 2) Investors tend to evaluate telecoms investment assuming no revenue uplift from new services will be available, but only cost savings from the adoption of the new technology.At the same time, regulators share the view that “NGA investments are likely to reinforce the importance of scale and scope economies, thereby reducing the degree of replicability, potentially leading to an enduring economic bottleneck....NGA may be likely to, at least, provide the same competition challenges to regulators as current generation wireline access networks.” This paper examines the mix of technical, regulatory, and business strategy issues that arise in implementing in Europe next generation broadband platforms. While the conclusions in terms of market structure are likely to differ market by market, our analysis suggests that the traditional “One size regulation fits all” approach is not going to work in Europe. In fact, although we do not think that fibre in Europe will follow the US example - the forbearance model - we strongly believe that regulation will need to be made more flexible. If promoting facilities-based competition is the goal, to assure a reasonable return on investment and guarantee fair competition it is necessary for regulation to adopt a case by case approach to regulate access (Dasgupta & Waverman, 2007). Based on the different underlying cost conditions of entry and presence of alternative platforms, it may be more appropriate to geographically differentiate the access regulatory regime. Geographic markets characterization should start with an assessment of the existing competitive conditions at the local level including, where appropriate, local exchanges. This approach will allow to focus on the existing degree of Local Loop Unbundling (LLU) competition as well as to point out the existence of intermodal competition at the local level. Essential facilities test and competition-specific considerations can help in triggering the geographically different regimes: forbearance where competition is feasible, sunset clauses, mandatory unbundling and bitstream can offer the right mix of incentives to the different industry players.The balance of this paper is organized into four sections. Section II, using some business case studies, discusses in more detail the economics of Next Generation Access Networks (NGAN), the need for a more flexible approach to deployment of these networks and why the idea that each player can choose a different technology and architecture to fit its need is at the heart of NGAN development. Furthermore, this section presents ad hoc geographic cases to show why geography matters in defining the right regulatory framework to guarantee efficient investment and development of competition.Section III provides an overview of the current European regulatory practice on geographic markets, using the body of knowledge on geographic markets from the European New Regulatory Framework and the recent regulatory experiences in the definition of geographic markets in some countries such as UK, Spain and Italy. At the same time, this section suggests how to shape regulatory policies for NGAN using the geographic dimension of the market definition in an NGAN framework." @default.
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• W2257730694 date "2007-08-15" @default.
• W2257730694 modified "2023-09-28" @default.
• W2257730694 title "The Economics of Next Generation Access Networks and Regulatory Governance in Europe: One Size Does Not Fit All" @default.
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