The extended gestation and birth of the European Commission's recommendation on the regulation of fibre networks

Purpose: The purpose of this paper is to set out the history and content of the European Commission's Recommendation on the regulation of next generation access networks, published in September 2010. The aim is to assess the Recommendation in terms of its likely impact on harmonisation and certainty of regulation within the European Union and on investment and competition. Design/methodology/approach: The approach adopted is to review the European Commission's Recommendation from the standpoint of regulatory economics. Findings:The publication in September 2010 of the Recommendation on the regulation of next generation access networks completed a process which had begun two years and two drafts previously. The paper sets out the background to the decision to prepare a Recommendation for national regulators supervising the installation of fibre based networks, where the fibre might go either to the premises (FTTP) or to the street cabinet (FTTC). It also describes the development of the Recommendation from the first draft in September 2008 to the final draft in September 2010. It concludes that the delay in issuing the Recommendation created an interval in which national regulators pursued their own diverse policies, to the detriment of harmonisation. In terms of investment and competition, the successive drafts appear to have diminished pressure on competitors to build their own infrastructures, with consequential effects on the likely form of competition. Finally, a degree of regulatory uncertainty has been created in member states where the regulator has pursued in its market reviews of fibre access products remedies which are at odds with the Recommendation. Originality/value: This is an early appraisal of a European Commission Recommendation which is likely to have a significant impact on European communications policy and regulation.