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Local Loop Unbundling and Bitstream Access: 20 Regulatory Practice in Europe and the U.S

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Local Loop Unbundling and Bitstream Access: 20 Regulatory Practice in Europe and the U.S View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Research Papers in Economics DIW Berlin: Politikberatung kompakt Local Loop Unbundling and Bitstream Access: 20 Regulatory Practice in Europe and the U.S. Pio Baake, Brigitte Preissl (Editors) Johannes M. Bauer Per Björstedt Erik Bohlin Elena Gallo Anders Henten Sven Lindmark Martijn Poel Enzo Pontarollo Knud Erik Skouby Jason Whalley Berlin, 2006 DIW Berlin: Politikberatung kompakt 20 Johannes M. Bauer1 Per Björstedt2 Erik Bohlin2 Elena Gallo3 Anders Henten4 Sven Lindmark2 Martijn Poel5 Enzo Pontarollo6 Knud Erik Skouby7 Jason Whalley8 Pio Baake9, Brigitte Preissl (Editors) Local Loop Unbundling and Bitstream Access: Regulatory Practice in Europe and the U.S. Berlin, September 2006 1 Michigan State University, USA. [email protected] 2 Chalmers University of Technology, Sweden. Corresponding author: Erik Bohlin, [email protected] 3 Wind Telecomunicazioni, Italy. [email protected] 4 CICT, COM•DTU, Denmark. [email protected] 5 TNO Information and Communication Technology, The Netherlands. [email protected] 6 Università Cattolica del Sacro Cuore, Italy. [email protected] 7 CICT, COM•DTU, Denmark. [email protected] 8 Strathclyde Business School, United Kingdom. [email protected] 9 DIW Berlin, Department Information Society and Competition. [email protected] IMPRESSUM © DIW Berlin, 2006 DIW Berlin Deutsches Institut für Wirtschaftsforschung Königin-Luise-Str. 5 14195 Berlin Tel. +49 (30) 897 89-0 Fax +49 (30) 897 89-200 www.diw.de ISBN 3-938762-10-1 ISSN 1614-6912 Alle Rechte vorbehalten. Abdruck oder vergleichbare Verwendung von Arbeiten des DIW Berlin ist auch in Auszügen nur mit vorheriger schriftlicher Genehmigung gestattet. DIW Berlin: Politikberatung kompakt 20 Contents Contents 1 Introduction ......................................................................................................................... 1 2 From facility-based competition to equality of access: The Italian way ........................ 6 2.1 Introduction.................................................................................................................. 6 2.2 The different levels of LLU ......................................................................................... 9 2.2.1 Bitstream access............................................................................................... 9 2.2.2 Full LLU........................................................................................................ 11 2.2.2.1 Collocation...................................................................................... 13 2.2.2.2 LLU access charges........................................................................ 14 2.2.2.3 Shared access.................................................................................. 17 2.3 The relation between the pricing of different services............................................... 17 2.4 Delays in LLU implementation.................................................................................. 19 2.5 The Agcom’s market analysis.................................................................................... 21 2.6 Access bottlenecks and broadband diffusion ............................................................. 25 2.7 Some open questions: ladder of investment or equality of access? ........................... 28 2.8 References.................................................................................................................. 32 3 Regulation of local loop unbundling in the Netherlands: The regulatory strategy, the many difficulties and the impact on infrastructure and services competition......................................................................................................................... 34 3.1 Introduction and main points ..................................................................................... 34 3.1.1 Overview of the regulatory strategy .............................................................. 34 3.1.2 Main features of regulatory framework......................................................... 35 3.2 Regulation of access to the local loop........................................................................ 39 3.2.1 The EDC model and its application to LLU.................................................. 39 3.2.2 Unbundling obligations.................................................................................. 42 3.2.3 Regulatory provisions with specific dynamic aspects ................................... 43 3.2.4 Obligations with respect to the provision of collocation spaces.................... 44 3.3 Wholesale and resale obligations and the respective tariffs....................................... 45 3.3.1 Regulations with respect to consumer prices................................................. 45 3.3.1.1 The model used............................................................................... 45 3.3.1.2 The relation between regulated consumer prices and wholesale tariffs.............................................................................. 46 I DIW Berlin: Politikberatung kompakt 20 Contents 3.4 Implementation of regulation..................................................................................... 47 3.4.1 Impediments of implementation: delays and deficiencies............................. 47 3.4.2 Litigation: appeal cases to regulator and court .............................................. 47 3.5 Performance indicators.............................................................................................. 48 3.5.1 Diffusion of broadband technology ............................................................... 48 3.5.2 Quality of access............................................................................................ 52 3.5.3 Division of market between incumbent and new entrants............................. 52 3.6 Conclusion and outlook............................................................................................. 56 3.7 References.................................................................................................................. 62 4 Regulation of local loop access – infrastructure versus service competition in fixed broadband access: The case of Denmark............................................................... 63 4.1 Introduction................................................................................................................ 63 4.2 Overview of the current regulatory philosophy ......................................................... 64 4.3 Main features of the regulatory framework ............................................................... 66 4.4 Regulation models and provisions ............................................................................. 68 4.5 Regulation of access to the local loop........................................................................ 69 4.5.1 The model used by the regulator to determine the access charges ................ 70 4.5.2 Unbundling obligations.................................................................................. 72 4.5.3 Regulatory provisions with specific dynamic aspects ................................... 73 4.5.4 Obligations with respect to the provision of collocation spaces.................... 75 4.6 Regulation of access to higher levels in the network, i.e. BSA ................................. 75 4.7 Wholesale and resale obligations and the respective tariffs....................................... 76 4.8 Regulation with respect to consumer prices .............................................................. 77 4.9 Implementation of regulatory rules............................................................................ 78 4.9.1 Impediments of implementation .................................................................... 78 4.9.2 Litigation........................................................................................................ 80 4.10 Performance indicators.............................................................................................. 81 4.10.1 Diffusion of broadband technology ............................................................... 81 4.10.1.1 Regional and local broadband initiatives........................................ 82 4.10.2 Quality of access............................................................................................ 84 4.10.3 Intermodal competition.................................................................................. 84 4.10.4 Division of markets between the incumbent and new entrants ..................... 85 4.11 Conclusion and other issues relevant for regulation of local loop access.................. 86 4.12 References.................................................................................................................. 88 II DIW Berlin: Politikberatung kompakt 20 Contents 5 Sweden’s telecom liberalisation and local loop unbundling: Moving from consensus to enforcement.................................................................................................. 90 5.1 Introduction................................................................................................................ 90 5.1.1 Overview over the current regulatory philosophy ......................................... 91 5.1.2 Main features of regulatory framework......................................................... 92 5.2 Regulation of access to the local
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