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Electronic Communications Code
The European Commission wants to relax competition in the telecom market in exchange for investments, according to BEREC. In the proposal that is expected to lead to the Electronic Communications Code, various measures can be found that will result in regulators having to take a step back. The rationale seems to be that absence of regulation will lead to investments and that decreasing competition is an acceptable price. However, BEREC warns that this will not benefit end users and advises scrapping some of the plans.
Step back
If the plans are implemented unchanged, there will be a shift from ex-ante to ex-post supervision. Markets will no longer be regulated beforehand, but only afterwards, through general competition oversight. Regulators acknowledge the overarching philosophy that ex-ante regulation is gradually being reduced, but they expect that market bottlenecks will always remain or new ones will arise. This makes it risky to require regulators to suddenly take steps back in various areas.
Scrapping
BEREC advises to completely remove two new elements from the Code. Firstly, 'Co-investment'. The European Commission aims to encourage investments in new (broadband) networks in exchange for regulatory relief. In cases where there are co-investors, the regulator must now always remain neutral by definition. BEREC sees the possibility that a co-investor only participates financially, without contributing to the development of technology or services. This could actually strengthen an existing monopoly. There are already a few countries where co-investors are active within the existing rules. BEREC makes some suggestions for changes, which essentially allow the regulator to keep an eye on things.
A second point that BEREC is completely against concerns 'vertically separated companies'. The Commission proposes to scrap all rules for providers that have placed the network in a wholesale company. BEREC warns that then there would be no more regulation for providers who have only administratively carried out the separation, but in practice still operate as one company. If the intervention can only be ex-post, it will be too late according to the regulators.