1. Plum Consulting, London, T +44 (0)20 7047 1919, www.plumconsulting.co.uk Relevant markets - The Times They are a-Changin Brian Williamson ETNO MLex Regulatory Summit, Brussels 25 April 2013

2. Plum 2013 2

3. Market changes to 2015 & beyond 3 When the facts change I change my mind, what do you do Sir? John Maynard Keynes

4. Plum 2013 Focus on broadband 4

5. Plum 2013 Intensifying platform competition 5 Supply sideDemand side LTE & smartphones near ubiquitous by 2015, implementation of July 12 statement accelerates fibre (including VDSL) Growing at 10 percentage points pa

6. Plum 2013 Intensifying over-the-top competition 6 WhatsApp first launched 2009 OTT messaging to overtake global SMS in 2013 Gigaom, January 2013 The impact of OTT is real - applications are competitive

7. Plum 2013 Regulation should change too Risk of circularity leading to over-regulation Consistency with July 12 statement Separate consideration of non- discrimination from price control Dont price regulate multiple products/points in value chain 7 Need clear focus on retail competition & all suppliers as starting point for analysis Focus on wholesale market Only one supplier Over regulation

8. Plum 2013 Steps for NRA to follow under revised recommendation 8 No Yes Withdraw regulation Step 1: Start with retail market Focus on access, direct constraints & sub-markets List of relevant wholesale markets Guidance on remedies Step 4: Proportionate remedy on operator with SMP Step 3: Define notional wholesale market and test three criteria Step 2: Is retail market competitive absent regulation?

9. Plum 2013 Retail markets as starting point for analysis Focus Access not services Broadband not narrowband All available technologies Bottlenecks may arise in following markets Dedicated high capacity broadband access in corporate services market Broadband access at a fixed location for mass-market customers Mobile broadband Is competitive Should be considered in assessing competition in broadband access at a fixed location for mass-market Scope for inclusion in retail broadband market depends on national circumstances and future usage 9

10. Plum 2013 Proposals for list of markets MarketProposalReasoning 1RemoveAnachronistic in broadband world Access-based and platform-based competition 2RemoveOTT competition Mobile voice competition 3 & 7Remove (with safeguards) OTT competition & low price (due to regulation) Symmetric obligations Threat of price control if prices rise 4 & 5New approach Platform competition & changing technology Trade-offs to consider in relation to preferred approach 6KeepCorporate market for dedicated capacity sufficiently distinct from mass market 10

11. Plum 2013 Calls - access, origination & termination Consistent with focus on broadband access propose that existing Markets 1 & 2 be removed from the list of relevant markets Mobile & fixed voice competition Over the top competition for communications services Broadband access will remain regulated where justified Call termination Markets 3 & 7 Over the top competition & alternative means of reaching people other than phone number (Facebook identity, device identity in iOS etc.) Termination rates already low due to regulation Costly in time and money to continue current approach Move to alternative approach to provide assurance of good outcomes –Interconnection and symmetry requirement (Article 5) –Backstop – re-regulate if termination prices rise? 11

12. Plum 2013 List of wholesale markets In relation to corporate services Wholesale terminating segments of leased lines In relation to broadband at a fixed location Wholesale market for passive remedies; and/or Wholesale market for active remedies Appropriate wholesale market for regulation depends on national/local circumstances Access obligation should apply at only one level - active or passive - in a network Passive remedy may not be technically/economically feasible/attractive e.g. with VDSL/vectoring Passive remedy may be preferred with co-investment 12