Governments, Competition and Utility Regulation

Governments, Competition and Utility Regulation

Edited by Colin Robinson

Governments, Competition and Utility Regulation continues the series of annual books, published in association with the Institute of Economic Affairs and the London Business School, which critically reviews the state of utility regulation and competition policy.

Chapter 5: Ofcom: a converged regulator?

Annegret Groebel

Subjects: economics and finance, competition policy, public sector economics


Annegret Groebel 1. OUTLINE OF THE NEW REGULATORY FRAMEWORK (NRF) One of the major reasons for reviewing the old regime of European telecommunications regulation was the technological development of convergence, creating innovative services offered either via new infrastructure or upgraded existing networks. Convergence causes rapidly changing market situations, both in existing as well as emerging markets. Market dynamics are changing and ‘hybrid’ markets, on the edge between classical telecommunications markets on the one side and broadcasting markets on the other, are coming into existence with services such as video on demand, where films are delivered via broadband networks on the PCs of individual users. Thus a typical mass (media) service is ‘changing colours’ becoming an end-to-end (telecoms) service. To deal with these changing market structures, regulators need more flexibility and also a comprehensive approach enveloping all kinds of services. As shown by the example of films that can be downloaded by individual users, thus becoming a customized service (tailored to the user), or interactive broadcasting services delivered via digital TV networks, once-separated markets converge, the underlying networks over which these services (substitutable in the eyes of consumers) are delivered must be governed or regulated according to the same rules. Otherwise distortions between the various platforms are created and intermodal competition can be distorted as shown by the example of the USA, where the distinction between ‘telecommunications’ and ‘information’ services does not work and was recently stopped by a court decision.1 Thus regulation can no longer maintain the distinction along the...

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