Network competition, not its lack, drives investment - even co-investment

Ian Scales
By Ian Scales

Sep 11, 2020

via Flickr ©  SGPhotography77 (CC BY-ND 2.0)

via Flickr © SGPhotography77 (CC BY-ND 2.0)

  • So claims European competitive telecom operator body, ECTA
  • It’s worried that with today’s focus on co-investment the old competitive principles may be in danger
  • It’s therefore drafted its own set of rules it hopes will be noticed by European regulators

Perhaps the most consequent issue today in telecoms and networks generally is not to be found amongst any of our current  technological obsessions -  cloud, edge, fibre access and so on - but around how to construct and maintain the competitive framework within which we’re going to see those powerful developments deployed. Getting that competitive element right will be crucial to avoid gumming up the industry with a series of monopoly choke-points (as has happened in the past).

How we got here

Competition is usually accepted as an  important - indeed crucial - driver by both vendors and service providers on their way up, but once they’ve arrived at the top it often becomes seen as a harbinger of cloying regulation instead. Funny that.

And, according to the European Competitive Telecommunications Association (ECTA), the perennial ‘is there enough competition?’ question needs to be asked again as the industry turns away, usually with the best of intentions, from its usual daggers drawn competitive instincts, to welcome in the concept of co-investment in networks. 

Network builders argue persuasively that various network cost-sharing arrangements are crucial if countries are to meet their various fibre build targets (see - After a slow start, fibre is now galloping towards the home stretch). 

But ensuring some semblance of real competition between providers must be part of the agenda for the long run, says ECTA. After all, sharing increases the propensity for players to collude in many ways, pricing being one important one. 

What ECTA desires is a framework which avoids this and at this stage it hopes to rev up the debate (pretty nascent at the moment) by “publishing for public information and commentary its redrafting proposal of the draft BEREC (Europe-wide regulator) Guidelines on Co-Investment.”

According to ECTA Director General Luc Hindryckx,  while “co-investment can be an important means to promote the roll-out of very high capacity networks. At the same time, it is important that the new rules of the European Electronic Communications Code for co-investment are not interpreted in a way that suggests that deregulation is required to incentivise investment.” 

The idea that competition drives investment (not its absence as is sometimes argued by telecoms incumbents)  is a central plank of ECTA policy, so it’s offering its alternative view of how the rules should be read to maintain and promote that essential understanding. 

Economic recovery demands diversification

Hindryckx says this is particularly important at a time as networks of very high capacity are evolving to become the basis for Europe’s economic recovery that, more than ever, requires all the sectors of the European economy to benefit from a diversified offer of digital products and services proposed by diversified players, small and large.”  

Chair of the ECTA Board of Directors, Emmanuel Forest, says that  BEREC’s approach of enabling stakeholders to actively make drafting proposals was the right one.

“The ECTA redraft draws on the wide variety of our members’ business models and experiences. We have therefore been uniquely able to address the difficult balance between incumbents, co-investors and access seekers. Our guiding principle has been that the networks of the future must remain open to participation and that such participation must make sense. At the same time, we are offering a reading that is fair also to those who cannot participate directly.”

Forest says that ECTA invites dialogue on this important topic for the future of competitive telecommunications in the EU. 

ECTA’s overview can be downloaded here

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