1. 1 New European Directives : n Impact on regulation : New legal approach n Impact on market Stimulation of network and service- investment ?

2. 2 Why new Directives ? Important question : orientation for NRA’S POLICY 1. Former (ONP) automatism superseded 2. Better adaptation to “multifunctional technologies” 3. Convergence (multimedia) 4. Harmonisation (ERG)

3. 3 BUT MAINLY : 5. Stimulating investment (major EU concern) 6. More flexible approach : only regulate where and if necessary 7. Objective : eventually only competition law (EU optimism)

4. 4 Method ? Is paradoxical : flexible regulation is the objective complex analyses are the method Indeed, 3 steps : market definitions market analyses imposing/not imposing regulation

5. 5 Analysis is done by applying competition concepts in the first two steps. –Market definitions : European Recommendation 18 markets ! (Including BROADCASTING) –Based on apportionment formulas (national, international, fixed, mobile, IC, Retail/Wholesale…) –Possibly : geographic division per Member state !

6. 6 Second step : market analysis n Does competition work ? n Or is there dominance ? n Joint-dominance ? Not only market share as criterion !

7. 7 If necessary : “REMEDIES” (ERG paper) n 5 kinds, going from SOFT to HARD n Can be combined (if necessary) n Transparency and Non-discrimination Accounting Separation Cost Orientation Access Obligation No cross-subsidisation

8. 8 But always : n Technology-neutrality n Stimulate Investments so concepts of : –“emerging markets” –Replicability” n Only ex ante regulation if necessary n Possibly impose rules on non-dominant players n Consultations

9. 9 Conclusion : n First steps will be important, delicate and time-consuming n (before finalisation : the old rules continue to be applied) n Risks of lack of transparency – coherence – stability n Risk of multiple “legal cases”

10. 10 All this must support the market and technological evolutions Especially : –3th generation mobile –Other markets : VDSL cable-broadband FTTH WLL Hotspots (emerging ?)

11. 11 But, MAJOR SHIFT TO EXPECT : From VOICE to DATA : mails VOIP/IP telephony In context where there is already substitution PSTN/MOBILE

12. 12 IMPACT ON : n new challenges for regulation n MORE IMPORTANT : –revenues fixed line operators –profit for customers n changes in interconnection approach n towards different access approach n stimulus for services / content development

13. 13 Some other concerns n sustainable competition : balance short term / long term n efficiency in source-resource management (frequencies – numbering) : dynamic policy n consumer protection : universal service police control – price caps

14. 14 Accounting and costing principles n Possible abuses : –excessive prices –margin squeeze / predatory prices –unfair discrimination n Needs : –SMP operators : transparent costing processes ensuring cost orientation –NRA : evidence of regulatory policing