Wednesday, September 29, 2010

Phasing Out Sector-Specific Regulation in European Telecommunications

Posted by D. Daniel Sokol

Günter Knieps (University of Freiburg) and Patrick Zenhäusern (Plaut Economics) discuss Phasing Out Sector-Specific Regulation in European Telecommunications.

ABSTRACT: The European Commission Recommendation 2007/879/EC has become known as an important innovation towards phasing out sector-specific regulation of electronic communications. Eleven of the eighteen markets are no longer regarded as needing to be subject to sector-specific ex ante regulation. Although the important role of active and potential competition in telecommunications markets has been mentioned, the economically founded implications of the “three-criteria-test” in the Commission Recommendation 2003/311/EC have not yet been implemented. As a consequence, the relevance of regulation in the remaining seven markets remains vague. To provide a superior alternative, the analytical concept of a disaggregated regulatory approach is applied. Sector-specific regulatory interventions are to be limited to network-specific market power. As a consequence, only two of the seven remaining markets in the European Commission Recommendation 2007/879/EC are possible candidates for regulation.

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