The Hungarian Communications Market Developments and ...

The Hungarian Communications Market Developments and Regulation between 2004 and 2008
degree of ex ante regulation may be required also in the long run,
e.g. in the case of providing national and EU-level interoperability of
electronic communications systems.
As long as there is not yet effective or infrastructure-related competition,
nonetheless there is a real chance for it to develop, the main
task of the Authority is to ensure competition between the different
platforms. In this respect, facilitating efficient investments along
competing platforms (infrastructures) and providing for the conditions
of competition between the platforms at the highest possible
level should be the very essence of regulatory approach.
If the development of effective competition does not seem possible
through the promotion of natural competition between infrastructures,
however, there is a real chance for it to develop through
competition between services, regulatory approach should focus on
the promotion of gradual investments. One form of this is the development
of an effective investment ladder.
If the possibility of infrastructure-based competition is minimal, the
regulator must establish the conditions for long-term competition of
services, as this allows for the highest level of competition feasible,
thus facilitating the realization of consumer objectives. The basis for
establishing competition of services is the provision of equal access
to value chain elements and bottleneck infrastructure.
The development of competition must definitely contribute to the
protection of consumer interests. Should, however, market structure
not allow for the development of any form of competition or should
wholesale interventions to support the competition of services be
unable to promote the realization of consumer objectives, the Authority
shall resort to retail price control, the prescription of minimum
quality levels and the enforcement of regulation as per Article 109
of Eht., concerning undue preference to specific consumers and the
unreasonable bundling of services, as an ultimate instrument in order
to directly realize consumer interests.
It is a precondition of effective competition that consumers are
able to choose from various offers and are able to switch to any
service provider they prefer. This requires transparency, that is,
consumers should have appropriate, clear and comprehensible
information on the services available, thus enabling them to compare
individual offers. Further precondition of switching are reasonably
short switch periods and the lowest possible costs of switching.
A part of these consumer rights may also be asserted by competition
itself, as competition enforces higher level customer relations as
well as more comfortable and client-friendly conditions. Should, however,
market mechanisms alone fail to guarantee this, it is regulation
that must establish the preconditions of effective selection by consumers
and the ability to switch between service providers/services.
In the course of achieving the third essential regulatory objective,
that is the consideration of sectoral interests, investment level and
financial stability are of particular importance. To this end, the Authority’s
intervention shall be such as not to initiate drastic changes
in the short run at the level of individual market players and to enable
them to react to regulatory changes and to conduct their business
efficiently. Furthermore, the Authority shall monitor financial stability
at a cross-sector level and shall refrain from putting it at risk through
its measures.
In addition to the main guiding principles, the Strategy also lays down
so-called specificity principles describing the degree of possible differentiatedness
of regulatory interventions. Accordingly, the Authority
• regulates without technological preferences, which means that
the Authority is carrying out technology neutral regulation, yet
taking the applied technological features of electronic communications
services into consideration;
• formulates competition, consumer and sector objectives and
principles, which are beyond specific markets and services,
however it may define service-specific regulation at the level of
the actual interventions;
• may apply differentiated regulatory interventions depending
on the relevant market positions of the SMP service providers
operating on non-overlapping but similar markets;
• may apply distinct regulatory interventions taking into consideration
the local geographical peculiarities;
• considers only the launch of new services as emerging markets,
avoiding regulation in the early stage;
• continuously reviews the necessity and extent of specific regulation
of markets relying on market and technological trends also
taking into consideration the EU Directives.
The Authority’s actual regulatory and market surveillance activities
are governed by the implementation principles. Accordingly, the
Authority
• follows the principles of transparency, long-term predictability and
consistency in its regulation. The regulation is based on pre-defined
and communicated objectives, principles and methodology;
• examines the impact of alternative means and ensures the
efficiency of regulation through compliance with the principle of
proportionality and net benefit before intervention decisions are
made. It takes into account the pace of evolution of sustainable
competition and the time and cost requirements of implementing
regulatory interventions;
• intends to cooperate with players involved in the electronic
communications market. Therefore the Authority elaborates
the necessary details of regulation based on the behaviour of
SMP operators and other market players and their commitment
towards the effective competition;
• intends to always act in a predictable and concurrently resolute
manner, being aware of the fact that the basis of effective
regulation lies in enforcement and the applicability of severe
penalties.