Alexandre de Streel

Market definitions in the new European regulatory framework for electronic communications

The regulation of electronic communications has been recently reformed in Europe. One striking feature of the review was to base most of the economic regulation – the so‐called significant market power regime – on antitrust principles. In particular, the regulated markets have to be defined according to competition law methodologies. This paper describes this approach and studies in detail the recently adopted Commission recommendation “on relevant markets susceptible to ex‐ante regulation”. The paper concludes with three policy recommendations. First, as regulation is more flexible and more complex, national regulators should co‐operate among themselves and national courts should only reform regulatory decisions in case of manifest error. Second, as regulation is not any more justified by the “original sin” of the previous monopolists, but by the inefficiency of antitrust to control market power, NRA should be cautious not to overly expand their intervention. Third, as ex ante market definitions are aligned on antirust principles, authorities should make sure that market definition is not a goal in itself but only a means to achieve the policy objectives of the sector‐specific regulation.

The Protection of the European Citizen in a Competitive E-Society: The New E.U. Universal Service Directive

A new regulatory framework for electronic communications (fixed and mobile telephony, Internet, cable TV, …) is due to be applicable in the Member States of the European Union in July 2003. This framework is composed of several Directives whose one – the Universal Service Directive – regulates the retail markets and the relationships between operators and end-users. The paper details this Directive and reviews its three-pillars structure: control of undertakings with significant market power, enhanced consumer protection, and guarantee of universal access to the most important electronic communications services. The paper shows that the new Directive is more an evolution than a revolution with regard to the previous regime. It maintains the faith in the market to deliver the best possible deal to the European consumers, and calls for a severe reduction of retail regulation and a more efficient provision of the universal service. The paper concludes by advocating for a migration of the concept of universal service from its liberalization origins to a European citizenship context.A new regulatory framework for electronic communications (fixed and mobile telephony, Internet, cable TV, …) is due to be applicable in the Member States of the European Union in July 2003. This framework is composed of several Directives whose one – the Universal Service Directive – regulates the retail markets and the relationships between operators and end-users. The paper details this Directive and reviews its three-pillars structure: control of undertakings with significant market power, enhanced consumer protection, and guarantee of universal access to the most important electronic communications services. The paper shows that the new Directive is more an evolution than a revolution with regard to the previous regime. It maintains the faith in the market to deliver the best possible deal to the European consumers, and calls for a severe reduction of retail regulation and a more efficient provision of the universal service. The paper concludes by advocating for a migration of the concept of universal service from its liberalization origins to a European citizenship context.

The Antitrust Activism of the European Commission in the Telecommunications Sector

This paper analyses the role of the European Commission in taking cases of abuse of dominance in the telecommunications sector since its liberalisation in 1998. The argument is that the Commission has played a very active antitrust role, in particular at the beginning of the liberalisation, and that its activism was blessed by the EU Courts. Indeed, the Courts see competition law as a complement, and not a substitute, to regulation. They have set a relatively low threshold for proving margin squeeze, the most common form of abuse in telecommunications; and they have allowed wide discretion to the Commission to deal with the inaction or failures of national regulatory authorities (NRAs). It is further submitted that such activism was justified in the early days of liberalisation when the telecommunications markets were still very concentrated, and when the NRAs were in their infancy and sometimes captured. However, this activism is less justified today because, on the one hand, competition in the sector has increased, and on the other hand most anticompetitive practices can be, and should be, addressed by the NRAs. Today, the Commission should instead concentrate on consolidating the expertise and the independence of the NRAs, and it should rely on its extensive oversight of NRA decisions to prevent violations of the competition law. The paper is divided into five sections. The first section reviews the main EU cases of abuse of dominance in the various telecoms segments. The next three sections deal with the main substantive and institutional issues raised by those cases. The second section describes the approaches of the Commission and the EU Courts on the relationship between competition law and sector-specific regulation. The third section analyses the tests established by EU Courts to control margin squeeze and refusal to deal in post-liberalised markets. It also compares them with the tests proposed by the Commission in its Guidance Paper on exclusionary abuses. The fourth section analyses the different uses made by the Commission of its antitrust powers in the telecoms sector, and their institutional implications. The fifth section concludes the paper.