Flexibility in the European telecommunications industry

Abstract

Purpose The purpose of this paper is to expose the necessity of introducing some degree of flexibility in the definition of wholesale access price of FTTx, in the EU competition regulatory framework, and incorporating new regulatory actions to boost investment substitutability to ensure that NRAs accomplish dynamic and/or static efficiency targets. Design/methodology/approach Given the European historical context, the current preponderance of cable and the strong heterogeneity in NGA networks rollout across Europe, a policy-oriented analysis defines a set of recommendations useful for member states whose NGA networks market is in a more advanced state of development. Findings Flexibility is necessary in jurisdictions holding a highly competitive NGA wholesale market at the three previously described levels to avoid that strong dynamic efficiency is passed-through into excessive retail prices which may decrease static efficiency in greater proportion, thereby generating a deadweight loss. Originality/value The novel measures pointed out are part of the on-going debate concerning the revision of the European regulatory framework for NGA networks.