EU Telecoms Framework Review - BT views
The Framework Review offers a timely opportunity to modernise the EU Telecoms Framework, building on what
has succeeded to date, and updating to meet the challenges of investment and competition in fixed and mobile
infrastructure, and the convergence between telecoms and new services.
A corner-stone of the current regime is the reliance on competition law principles (SMP) to assess effective
competition. This should not be diluted – more consistent and effective implementation of remedies should be
prioritised over interventions which could make regulatory decisions more arbitrary and fragmented. Key
characteristics of a revised Framework should include:
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Encouragement of long term commitments from NRAs to provide certainty and clarity;
Regulatory policies to encourage large scale investment;
Support for consolidation when it benefits competition and brings investment;
A better regulatory balance between service quality and price;
A level playing field particularly with regard to Pay TV;
Effective and consistent implementation of wholesale access regulation to support cross-border business
service provision;
Simplification of current regulations with duplication removed where possible alongside consistent
application of regulation supported by appropriate institutional arrangements.
Competition and SMP
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The Framework is based on the application of competition law principles (SMP). This approach is tried
and tested, and grounded in extensive competition law and economic theory and practice.
Introducing a different, more arbitrary, threshold (as discussed within BEREC) which does not have the
associated precedent and practice will create inevitable uncertainty, chilling investment and innovation,
and more inconsistency of approach between NRAs.
Ultrafast Broadband
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Regulation should support investment but should not make technology choices;
The current EC approach provides the right balance of incentives and safeguards, with technology
neutrality, and price flexibility conditional on non-discrimination;
This model is delivering well in the UK with 95%+ coverage, rapid technology advances, and vibrant
competition including from cable – this requires continued massive investment with continued supportive
regulation;
State Aids policy needs to be made consistent with the Framework, allowing greater flexibility including for
urban areas.
Pay TV and Convergence
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The Framework needs updating to encourage a level playing field, applying a consistent competition
framework across the converging sectors and a consistent approach to all elements of bundled service
offers.
Wholesale Access for Cross-border Business Service Provision
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Implementation of the Framework continues to vary, with notable divergence in the market for cross-border
high-grade business access. In this market there is a genuine pan-EU retail demand, which requires the
EC and regulators to should focus on more effective / consistent regulation for access inputs to pan-EU
business service provision.
This is not a matter of changing the existing framework so much as ensuring that it is consistently and
appropriately applied across all member states. The EC should provide guidance to BEREC and NRAs
on the requirements of cross-border business service provision, including more consistency in reference
offers.
Frequency of market reviews
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The existing requirement for market reviews to be undertaken every three years creates a significant
administrative burden and can lead to less regulatory certainty, but the clear priority is to promote
regulatory predictability.
We can see benefits in allowing regulators with the flexibility to take longer views and set out regulatory
principles which can apply for longer periods.
Clear long term regulatory principles to span market review periods should be encouraged. Longer market
review periods may not always be appropriate though and NRAs should be able to conduct market
analyses on a regular basis where market changes justify it.
Universal Availability
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The USO construct cannot simply be extended to broadband, without proper consideration given to the
costs involved and the most appropriate way to recover these;
The Framework should retain key principles such as the unacceptability of funding contributions if these
constitute an unfair burden;
Any funding should be from as wide a base as possible.
Wireless / Spectrum
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Better coordination would be beneficial on licence duration (in favour of longer term) and spectrum pricing
levels;
Better coordination would help to identify best practice on spectrum usage rights;
Pan-EU licensing is not required and may introduce delay and competition issues.
Internet Platforms / OTTs
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Exponential growth in innovative OTTT services should be seen as a success for the whole internet
ecosystem.
The Framework needs to recognise this development and ensure NRAs review competition across the
new markets.
BT supports the principle that services should be subject to common rules where genuinely substitutable,
but believes this should lead to lifting telecoms regulation rather than imposing new rules.
Right of appeal on merits
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The current Framework requires that the merits of an appeal case are duly taken into account. This is an
essential component of a system of checks and balances, allowing market players (‘entrants’ and
‘incumbents’) the right to challenge decisions where warranted.
BT supports continuation of this essential right.
Institutional Issues
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The existing institutional balance has proved effective in delivering many of the benefits of a Single Market
but there is a need for more effective / consistent application of key regulated wholesale access remedies;
Serious consideration needs to be given to evolving the existing relationships and responsibilities of the
various institutions to ensure that these arrangements best promote consistent and effective application of
the framework.
NRAs should be required to provide full reasoned justification where they wish to deviate from EC
comments on market review proposals; the EC comments should have a formal status allowing them to
be used in evidence for national appeals.
BT Group plc - January 2016
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