ETNO

MLEX Regulatory Summit 2016

#ETNOMLex --- 24th June, Sofitel Hotel

Regulating for the user of the future

Closing Interview -Towards future-oriented EU laws

Michal Boni, Member of the European Parliament
Erik Debroek, Senior Vice President, Group regulatory affairs, Orange
Antonio De Tommaso, Co-Chair of BEREC Expert Working Group "Regulatory Framework" & Director of EU and
International Affairs Service, AgCOM

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- Europe has a good chance of coming out of the digital transformation in a stronger
position than when it went in. This is a major action item given the EU Commission's
ambitious target of raising industry's share in economic output in the European Union
from 16 to 20 percent by 2020;
- Europe need understand that ongoing massive transition will transform how citizens
interact with their governments, revolutionize entire industries, and change the way we
engage with one another;
- How might the regulatory framework be modified to stimulate investment and
competition in the supply of high-speed broadband access? In answering this question
we need to take account of the following fact that:
1. The EU needs high speed and ubiquitous broadband if it is to deliver additional
economic and social benefits to its citizens through the Digital Single Market. This will
require major investment in new technologies to upgrade Europes telecommunications
access networks;
2. Infrastructure-based competition stimulates infrastructure investment. This form of
competition has grown steadily in the EU over the past five years. But it is patchy. In a
typical member state around 50% of households and businesses are in areas where
there is infrastructure-based competition in the supply of broadband access;
- The new framework should facilitate the contribution made by electronic
communications to the European economic development and social welfare. Because
European consumers and businesses have demanding needs and show an ever growing
appetite for digital services, the pre-requisite is about high quality connectivity and
always faster broadband networks, continuously upgraded through sustained
investment. All other objectives should be subsidiary to this one;
- It is essential to have telecom investments at the forefront of European policy, at a
time when the EU is experiencing a massive and growing deficit compared to the USA:
while investment in telecommunications services has been around 94 per EU
inhabitant in recent years, it reaches around 188 per inhabitant in the US.


- The future framework should focus on guaranteeing market openness, upholding
competition and incentivising investment in order to secure widespread adoption of
high-performance connectivity. In other words, the objective in terms of competition,
and its implementation, should be rebalanced with more emphasis on supporting
infrastructure-based competition.
- While the current regulatory framework allows both infrastructure and service-based
competition, it has favoured over past years the latter, supporting short-term retail
price decreases based on heavy-handed network access regulation. For too long,
regulators have been focused on strictly controlling the price for the access to regulated
networks and denying network owners any competitive edge from their investment,
rather than be concerned by the risk of under-investment in new networks.
- It is now time to re-balance the objectives of the framework to favour more network
investment. To this end, mutualising the fixed cost of investment between competing
operators, as long as it does not reduce the productive capacity and the ability to
differentiate for each market player, can reduce the production cost of the industry
thereby optimising output and welfare for a given global level of investment.
- We should consider one of principle for the revised framework: Move from ex-ante to
ex-post sector specific regulation where possible!
- It is now 15 years since EU telecommunications markets were opened to competition.
As a result ex-ante measures which were designed to promote market entry have
become increasingly irrelevant. Over the past five years in particular we have seen
substantial consolidation between entrant market players and little new entry. At the
same time it is clear that ex-ante regulatory measures have reduced infrastructure
investment in the EU. In these circumstances it makes sense for NRAs to use ex-post
regulation more and ex-ante regulation less.
- To deliver on this vision, smart policy decisions are needed to ensure investment is
forthcoming and that it achieves the best possible outcomes;

- We need to have a good political framework, improve the legal certainty and flexibility.
It means better political climate and willingness among all Member States to engage in
integration and harmonization. It is our duty to avoid the fragmentation of solutions
important for the Digital Package, especially for the Digital Single Market, and overcome
all barriers. It refers to all possible areas: from the economy 4.0, to the rules crucial for
fair competition for platforms and much braver solutions in the area of allocation of the
spectrum, particularly in the future. One digital voice from the European Parliament and
the European Commission should reach all Member States, and allow them through the
Council to unite in actions and make decisions together;

- Having said that, I want to emphasize that we need the legislative framework adjusted
to the rules: as less as possible, as much as really necessary;


3x points to summarise:


- We need the new model of the regulatory system and the responsibilities of the
institutions: much more focused on the balance between: competitiveness - and
development / focused on the problem: what we really want to achieve via regulatory
actions? - Competitiveness at the country's markets or competitiveness of the Europe as
a whole vis a vis to the different competitive continents? (all over the world, globally)

- Where necessary, government intervention should be minimal. It should not take the
form of heavy-duty regulation of operations, which is self- defeating, but in the
adoption, oversight, and if necessary, enforcement, of certain principles. The networks
infrastructure must be built as open systems intended to support the greatest possible
diversity in: Access, Content, Uses and Architecture, where networks must be built as a
series of inter-operable components with well-defined published interfaces, which
permit maximum third-party competition.

- Connected cars, eHealth, smart cities are all developing at unprecedented speed.
Machine2Machine (M2M) and IoT are no longer future trends but the now and here.
This includes a 99bn savings potential in health care costs by 2017 according
estimates quoted in the OECD Digital Outlook 2015. We absolutely need to get the
foundations right for this digital revolution and this requires robust high-quality
infrastructure.

- In this context, I believe that Europe needs constant investment, innovation and
imagination.