European Competitive Telecommunications Association

Brussels, 14.05.2018: ECTA today addresses an open letter to the co-legislators and to the European Commission to warn that closing the negotiations on the draft European Electronic Communications Code ('the Code') may turn an apparent legislative victory into a very real and lasting policy defeat, if negotiators settle for trading off competition against investment, as currently proposed.

With the negotiations set to majorly compromise the significant market power (SMP) regime that has underpinned moving the telecoms sector from monopoly to liberalisation for more than 15 years, connectivity is about to lose its competitive foundation. ECTA therefore cautions that, if adopted, the draft Code will be overall significantly worse for competitive market functioning, and ultimately will harm end-users, compared to the current EU regulatory framework.

To promote competition and investment in a sustainable manner, preserving and strengthening the current rules on significant market power, including the full toolbox for NRAs, is by far preferable to adopting the Code in its current form.

If the co-legislators wish to create a truly pro-competitive framework, which respects and builds on the proven fact that competition drives investment, the article on co-investment needs to be deleted and other key provisions to be substantially revised:

  • Article 74 is incompatible with promoting competitive investment and undermines the fundamentals of the regulatory framework so severely that it should simply be deleted (and also the broader provisions in article 76bis – on which there has not been any impact assessment). To reward undertakings with significant market power for proposing or entering into co-investment by lifting regulatory obligations does not render co-investment sustainable – but it does negate the special responsibility that they have for competitive market functioning and risks enabling them to re-establish the monopolies they enjoyed in the past.
  • Article 59.2 regarding symmetrical regulation should refocus on its initial objective of addressing issues of access to in-building cabling rather than extending it to issues addressed by the SMP regime.
  • Article 61 presents a unique opportunity to create a future-proof regime by defining reliable and effective means to address situations of jointly held significant market power. Failure to capitalise on this opportunity will leave NRAs unable to effectively address evolving market realities.

Luc Hindryckx, Executive Director of ECTA emphasizes: 'To adopt the Code in its current form means putting at risk the competitive fabric of electronic communications in the EU, without sustainably improving investment.'

and continues,

'The one-sided focus on improving incentives for incumbents frustrates competitors and their ongoing and planned investments. The overall balance is going to be negative, and ultimately, this will jeopardize affordable access to very high capacity networks for all EU citizens. A compromise compromising competition serves no one but the former monopolists.'

* * *

ECTA members are united in their belief that competition is the best driver of efficient investments and the greatest enabler of innovation, choice and benefits for citizens and businesses, as well as for the European economy overall. This is the key message that ECTA and its members promote in the discussions about the proposed European Electronic Communications Code.

For further information on the contents of this press release and ECTA’s positions, contact:

Luc Hindryckx, Executive Director, +32 (0)2 290 0102

Follow ECTA’s latest views and activities on the Code and other subjects at:  Twitter@twECTA

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