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Access Regulation in the Electronic Communications Directives - Incentive structures in UMTS-network governance

Nilsson, Ola (2001)
Department of Law
Abstract
The development within mobile telecommunications has been very rapid during the last decade. The next step will be the introduction of so-called 3G services distributed over networks utilizing the UMTS standard. In order to facilitate the development of this new infrastructure the national governments has allocated a certain portion of the frequency spectrum to this traffic. The Member States of the EU have distributed licenses that give the highest bidders the right to utilize this scarce resource. The winners of the licenses have expected to be able to use the revenues created by the oligopoly-like market situation to finance both the necessary construction of heavy infrastructure and the price of the licenses. The Member States on the... (More)
The development within mobile telecommunications has been very rapid during the last decade. The next step will be the introduction of so-called 3G services distributed over networks utilizing the UMTS standard. In order to facilitate the development of this new infrastructure the national governments has allocated a certain portion of the frequency spectrum to this traffic. The Member States of the EU have distributed licenses that give the highest bidders the right to utilize this scarce resource. The winners of the licenses have expected to be able to use the revenues created by the oligopoly-like market situation to finance both the necessary construction of heavy infrastructure and the price of the licenses. The Member States on the other hand want competition between the licensees to result in pricing structures oriented towards marginal cost. They have thus come into a situation where their behavior is governed by two contradictory incentive structures. They want licensed operators to extract enough revenue to finance the building of new networks and the purchase of the expensive licenses but they do not want them to use their exclusive rights to take advantage of the limited competition to raise prices or threaten public interests. Just after the auctions were completed in all Member States a new regulatory framework for telecommunications was adopted. This new framework was based both on the Community competition rules and the old complex pattern of telecommunications Directives. The applicability rules of the new framework are taken from the competition rules as defined by the Commission and by the ECJ. The remedies against anti-competitive behavior are taken from the old regulation of fixed telephony. The resulting regulation has become potentially very intrusive against the network owners. If the regulation is found to apply to them they can be subject to both obligations to provide access to their networks and to various forms of price control. This potentially affects the networks owners' profitability to such a degree that they may hesitate to investment in building the networks. This thesis analyzes the difficult weighing of interests that the Member Sates must make in order to control the competitive situation and still give incentives to invest. In order to do this the thesis studies what incentives guide the behavior and strategies of the telecommunication operators and of the legislators. It further examines how the Member States through Community legislation are attempting to achieve their goals and how operators are affected by this. (Less)
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author
Nilsson, Ola
supervisor
organization
year
type
H3 - Professional qualifications (4 Years - )
subject
keywords
EG-rätt, Rättsekonomi
language
English
id
1560622
date added to LUP
2010-03-08 15:55:26
date last changed
2010-03-08 15:55:26
@misc{1560622,
  abstract     = {The development within mobile telecommunications has been very rapid during the last decade. The next step will be the introduction of so-called 3G services distributed over networks utilizing the UMTS standard. In order to facilitate the development of this new infrastructure the national governments has allocated a certain portion of the frequency spectrum to this traffic. The Member States of the EU have distributed licenses that give the highest bidders the right to utilize this scarce resource. The winners of the licenses have expected to be able to use the revenues created by the oligopoly-like market situation to finance both the necessary construction of heavy infrastructure and the price of the licenses. The Member States on the other hand want competition between the licensees to result in pricing structures oriented towards marginal cost. They have thus come into a situation where their behavior is governed by two contradictory incentive structures. They want licensed operators to extract enough revenue to finance the building of new networks and the purchase of the expensive licenses but they do not want them to use their exclusive rights to take advantage of the limited competition to raise prices or threaten public interests. Just after the auctions were completed in all Member States a new regulatory framework for telecommunications was adopted. This new framework was based both on the Community competition rules and the old complex pattern of telecommunications Directives. The applicability rules of the new framework are taken from the competition rules as defined by the Commission and by the ECJ. The remedies against anti-competitive behavior are taken from the old regulation of fixed telephony. The resulting regulation has become potentially very intrusive against the network owners. If the regulation is found to apply to them they can be subject to both obligations to provide access to their networks and to various forms of price control. This potentially affects the networks owners' profitability to such a degree that they may hesitate to investment in building the networks. This thesis analyzes the difficult weighing of interests that the Member Sates must make in order to control the competitive situation and still give incentives to invest. In order to do this the thesis studies what incentives guide the behavior and strategies of the telecommunication operators and of the legislators. It further examines how the Member States through Community legislation are attempting to achieve their goals and how operators are affected by this.},
  author       = {Nilsson, Ola},
  keyword      = {EG-rätt,Rättsekonomi},
  language     = {eng},
  note         = {Student Paper},
  title        = {Access Regulation in the Electronic Communications Directives - Incentive structures in UMTS-network governance},
  year         = {2001},
}