Portugal continues on the successful path towards broadband market deregulation
In its most recent market analysis – just submitted to the European Commission – the Portuguese regulator (ANACOM) decided, based on its assessment of market conditions, the proportionality of obligations and conditions to be imposed and any regulatory impacts on incentives to invest, to not impose any wholesale access obligations on the incumbent’s last mile fibre. Its regulatory obligations on copper lines and passive infrastructure (poles, conduits, in-building wiring) will continue. The regulator will also continue to monitor the market.
Intel strongly supports this ruling which would continue ANACOM’s successful regulatory approach that encouraged infrastructure-based competition in NGA networks (fibre and cable) and gave Portugal one of the highest FTTH coverage rates in the EU.
ANACOM’s approach is consistent with our view that where consumers have a real opportunity to switch among competing facilities, mandatory access obligations on new NGA (e.g., last mile FTTx) investment are not necessary to protect competition and unduly discourage broadband investment. Indeed, they may well discourage new entrants as well as incumbents from investing in new last mile facilities. This ruling also provides an opportunity to garner more experience addressing important empirical questions integral to the successful revision of the EU telecoms framework.
The European Commission, through the Article 7 procedure, must now decide whether to let the proposed measure stand. Intel urges the Commission to support ANACOM’s pro-investment, pro-competition and pro-consumer ruling.
In our recent (December 7, 2015) filing in the European Commission’s Telecom Framework consultation we explained the above position in more detail. There we recommended that access requirements not be imposed on an operator’s new last mile fiber (FTTx) investment where there is “effective” competition and we defined as effectively competitive those markets where consumers can choose among three facilities-based competitors. We also recommended that the regulator monitor market performance and require the incumbent to provide access to conduit and ducts available to competitors.
By way of example, a market where there is new incumbent fiber investment, cable modem access and the possibility of ULL entry would meet the effective competition test. Other forms of facilities-based competition (4G, municipal fiber and other alternatives might meet the case in some markets now or in the future) would be also considered. In Portugal, this approach based on the above definition of effective competition has encouraged substantial private capital investments in last mile network facilities, including fiber, and should be emulated.
Our review of the evidence and analysis supports the contention that markets that meet our test generally are rivalrous, see price declines and share changes, and attract more new investment and services.
See, for example, “Alternative Operators Investing in NGAs” by Herrera-Gonzalez and Garcia-Arribas, “National Fiber Strategies” by Arthur D. Little, “The deployment and penetration of high-speed fiber networks and services: Why are EU member states lagging behind?” by Briglauer and Gugler or “Why is Europe lagging on next generation access networks?” by Briglauer et al.
(2015), “Why is Europe lagging on next generation access networks?” http://bruegel.org/2015/10/why-is-europe-lagging-on-next-generation-access-networks/
(2014), “Alternative Operators Investing in NGAs”, http://econstor.eu/bitstream/10419/101387/1/795227388.pdf
(2013), “National Fiber Strategies”
(2013), The deployment and penetration of high-speed fiber networks and services: Why are EU member states lagging behind? Telecommunications Policy 37 (10), 819-835.