Access regulation on NGA-A financial, market-led solution to bridge the gap between US and European diverging regulatory approaches
How to regulate wholesale access on next generation access (NGA) networks is probably the most pressing issue faced by European telecoms regulars today. The lack of actual competitive restraint from cable operators precludes the replication of US-like regulatory forbearance, as it might lead to the (re-) monopolization of broadband markets by telecoms incumbents, thus spoiling the celebrated achievements over the last decade, whereby competing operators have penetrated the market thanks to widespread access regulation over the DSL platform. However, as NGA networks are largely yet to be deployed, the threat of similar measures being extended is keeping incumbents from undertaking investments into NGA. This is particularly so given the perceived uncertainty about consumers' willingness to pay for next-generation Internet access services, which raises deep reservations about the viability of the business case for NGA. Such a stalemate is exacerbated by the difficulty of envisaging practical solutions to reach a "new regulatory contract", where conflicting interests are effectively balanced out for the benefit of the society overall. This article represents an attempt to address this vacuum. A "division of labour" between regulators and the market is proposed, in order to reflect distinctive capabilities in an incentive-compatible way. In particular, while regulators would be responsible for setting wholesale access terms, the market would be left to price the risk in NGA deployment through the functioning of a commodity option market.
Authors: | Siciliani, Paolo |
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Published in: |
Telecommunications Policy. - Elsevier, ISSN 0308-5961. - Vol. 34, 5-6, p. 287-298
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Publisher: |
Elsevier |
Keywords: | Next generation networks Access regulation Option markets Auction Regulatory forbearance |
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