Mec887Warwick Business School1 IDATE L’Europe en marche…….. Montpellier, 21 November 2002 “From Deregulation to Consolidation- the case of Europe” Martin.

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Presentation transcript:

mec887Warwick Business School1 IDATE L’Europe en marche…….. Montpellier, 21 November 2002 “From Deregulation to Consolidation- the case of Europe” Martin Cave Warwick Business School The University of Warwick, Coventry, CV4 7AL Website

mec887Warwick Business School2 The point of departure: the 1998 package Developed incrementally differentiated by market structural regulation: more or less free entry behavioural regulation retail price controls interconnection pricing universal service regulatory precondition: SMP (>25% of ‘large’ pre-specified markets

mec887Warwick Business School3 Conditions for the new regime Takes account of convergence maintains ex ante regulation in some markets provides for differential advance to effective competition in different markets, in member states with different histories and market sizes end state is competition law involves interactions between EC and NRAs

mec887Warwick Business School4 The modus operandi A.Market definition: ‘relevant’ markets identified, using anti-trust principles, as candidates for ex ante regulation; otherwise, reliance on competition law B.Market analysis: is there (single, joint or vertically averaged) dominance in the relevant markets - or others nominated by NRAs? C.Remedies, if yes, remedy selected from list in Directives (mostly relating to access).

mec887Warwick Business School5 Which markets are ‘relevant’/liable to ex ante regulation ? Three (cumulative) conditions in draft Recommendation barriers to entry and development of competition dynamic aspects relative efficiency of competition law and complementary ex ante regulation

mec887Warwick Business School6 Meaning of greater efficiency? Competition law would not adequately address the market failures because of (eg) extensive compliance requirement or need for frequent and/or timely intervention May be related to type of barrier to entry or competition

mec887Warwick Business School7 What markets are found ‘relevant’ in the draft Mostly wholesale operator by operator markets for fixed and mobile termination unbundled loops included broadcasting transmission included Markets may be extended to adjacent technical areas and segmented

mec887Warwick Business School8 Remedies May only be applied in absence of effective competition Must be proportionate and justified by objectives of regime as a whole Largely relate to access and interconnection Also include retail price caps

mec887Warwick Business School9 Some observations on the proposed remedies

mec887Warwick Business School10 An assessment of the regime Designed to corral NRAs down road to deregulation and reliance on competition law Places burden of proof for intervention on NRAs Seeks to confine remedies to least intrusive effective instruments

mec887Warwick Business School11 Risks Multiplication of ex ante markets by NRAs ‘One size fits all’ for large and small markets No detailed guidance on choice of remedies Complex and divisive institutional interactions