1. BEYOND PUBLIC PRIVATE PARTNERSHIPS : PUBLIC PRIVATE INTERPLAY José Luis Gómez-Barroso UNED – Universidad Nacional de Educación a Distancia (Spain) jlgomez@cee.uned.es ITU Regional Experts Group Meeting for Europe Increasing Role of Public Private Partnerships in the ICT Ecosystem Geneva, 14-15 November 2012

2. Introduction Public activity in the telecommunications industry has experienced important transformations in the last decade: ► “reinvolvement” in infrastructure deployment ► “innovative” boosting measures ► decentralisation of some decisions Conceptually, even more important than the measures themselves is the fact that private agents often participate in their realisation and execution This collaboration will not be limited to establishing formal contracts but will be articulated in quite diverse ways

3. Introduction Intervention in / control of telecommunication services has been in the agenda of every government during the last century √ √ What makes telecommunication markets “special”? In market economies, the degree of state intervention (“the weight of the public sector”) is what differentiates ideologies (or maybe it would be better to call them tendencies) The debate comes back into focus in times of crisis New spaces for public / private collaboration in next generation communications are emerging

4. Structure Conceptual framework: why public action in telecommunications ? Public activity in practice ► From the 1950s to the mid-1980s ► During the liberalising period ► The 21st century approach The place of the private sector Conclusions

5. Structure Conceptual framework: why public action in telecommunications ? Public activity in practice ► From the 1950s to the mid-1980s ► During the liberalising period ► The 21st century approach The place of the private sector Conclusions

6. A rationale for public intervention

7. Characteristics of the good

8. Market condition

9. Economic development

10. Equity

11. Structure Conceptual framework: why public action in telecommunications ? Public activity in practice ► From the 1950s to the mid-1980s ► During the liberalising period ► The 21st century approach The place of the private sector Conclusions

12. Structure Conceptual framework: why public action in telecommunications ? Public activity in practice ► From the 1950s to the mid-1980s General framework Rationale for public activity Nature of intervention The European example ► During the liberalising period ► The 21st century approach The place of the private sector Conclusions

13. General framework

14. Rationale for public activity Characteristics of the good itself Market condition Natural monopoly Macroeconomic arguments Protection of the national industry (equipment providers) Equity Extension of the service (sometimes more theoretical than real) Non-economic arguments Strategic importance for national security reasons

15. Nature of intervention

16. Europe: from PTTs to the start of liberalisation

17. Structure Conceptual framework: why public action in telecommunications ? Public activity in practice ► From the 1950s to the mid-1980s ► During the liberalising period General framework Rationale for public activity Nature of intervention The European example ► The 21st century approach The place of the private sector Conclusions

18. General framework

19. Rationale for public activity Characteristics of the good itself Market condition Former monopolies network represents an “essential facility” Macroeconomic arguments Equity Non-economic arguments

20. Nature of intervention

21. The opening of the industry: general circumstances

22. The opening of the industry: European specificities Structural weakness of the national markets The creation of a Single European Market seemed as the most convenient decision to guarantee the continuity of a technologically leading industry The European Community could not ignore the consequences of the policies adopted by the United States and Japan It was necessary to define a common position for international negotiations, especially as regards the GATT Breaking up the national compartmentalization was trusted to allow operators to reach the optimal dimension for competing on a global basis

23. The way to a deregulated scenario 1987 Green Paper on the development of the common market Initial competition Directives 1992 Review Support from the White Paper on growth, competition and employment Support from the Bangemann Report Regulations introducing greater levels of competition Regulations completing the pillars of a deregulated scenario 1998 Complete liberalisation on January 1 The “ 1998 package ” was focused on the creation of a new competitive market and on the rights of new entrants

24. A new variable: Information society policies

25. Structure Conceptual framework: why public action in telecommunications ? Public activity in practice ► From the 1950s to the mid-1980s ► During the liberalising period ► The 21st century approach General framework Rationale for public activity Nature of intervention The European example The place of the private sector Conclusions

26. General framework

27. Rationale for public activity Characteristics of the good itself Telecommunications as a merit good Market condition Non-fully competitive markets Macroeconomic arguments Impulsion of a knowledge economy Equity Fighting against digital divides Non-economic arguments

28. Nature of intervention

29. Broadband in information society programmes “ e Europe An Information Society for All” was set out as a basic piece of the so-called Lisbon strategy, targeted at turning the European Union into the most competitive and dynamic knowledge-based economy by 2010 As an enabler for that, a widespread availability of broadband access at competitive prices was deemed necessary All national programmes acknowledge the primary role of the market in broadband deployment… …But they also admit the role of public policy in complementing the effective operation of the market i2010 and the Digital Agenda confirmed this line of action

30. Public funding of projects Any proposed measure has to be compatible with the Common market rules ► Article 107(1) of the Treaty of Functioning of the EU provides for the general principle of prohibition of State aid within the Community ► Article 107(3) of the Treaty of Functioning of the EU provide exemptions. Specifically, an aid that “does not adversely affect trading conditions to an extent contrary to the common interest” may be considered to be compatible with the common market The Commission has a positive stance regarding the application of the state aid rules to public funding for broadband Moreover, a part of the money comes from structural funds, wherever the conditions for their usage apply

31. Public funding of projects: Guidelines

32. Structure Conceptual framework: why public action in telecommunications ? Public activity in practice ► From the 1950s to the mid-1980s ► During the liberalising period ► The 21st century approach The place of the private sector Conclusions

33. Coming back from the extreme?

34. PPI beyond PPP

35. New spaces for PPI: a scheme for those relations Subsidiarity posits a hierarchical relationship across levels of social and political organisation ► Delegating responsibility should be done only when lower levels of organisation are unable to meet the challenge For the pragmatic logic, the private and public sectors can be envisioned as poles along a continuum ► Privatisation and collectivisation represent movement from one end to another ► Traditional public financing and provision of services would be at one pole, and private at the other

36. A expanded catalogue of tools

37. Structure Conceptual framework: why public action in telecommunications ? Public activity in practice ► From the 1950s to the mid-1980s ► During the liberalising period ► The 21st century approach The place of the private sector Conclusions

38. Almost all the “justifying” arguments are, to a variable extent, applicable The decision of adopting policies for generalising advanced telecommunication finds coverage in economic rigor Finding coverage does not imply being forced to intervene However, this intervention, should it be carried out, cannot be inconsistent with the assessment made of the analysis’ results Portfolio of reasons that, duly valued and ordered, make up a solid base on which to base each action

39. Conclusions In practice, it is not easy to decide when advantages can be expected from collaboration between governments and for-profit enterprises Partnering can introduce greater complexity and it does not necessarily result in decreased regulation “Environmental” factors experience, institutional conditions, general economic conditions, input markets, basic industry conditions, and regulatory governance condition the policies that are possible and, thus, the results achieved !

40. Conclusions The approach for NGN being deployed in an inclusive manner will be dominated by a learning curve process in the use of public-private policy tools “We’ve got to use everything that we’ve got” There is no single recipe for fruitful public-private collaboration ► Every community will have different economic and social requirements in relation to converged networks A single policy will probably not work for every location

41. BEYOND PUBLIC PRIVATE PARTNERSHIPS : PUBLIC PRIVATE INTERPLAY José Luis Gómez-Barroso UNED – Universidad Nacional de Educación a Distancia (Spain) jlgomez@cee.uned.es ITU Regional Experts Group Meeting for Europe Increasing Role of Public Private Partnerships in the ICT Ecosystem Geneva, 14-15 November 2012