The Hungarian Communications Market Developments and ...

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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.
10 11 Key areas of regulation for the period between 2008 and 2010 NHH’s strategy has identified two key areas of regulation for the period between 2008 and 2010: the liberalisation of spectrum usage and the challenges related to the development of next generation networks (NGN). The objective of the liberalisation of spectrum usage is to achieve a more optimal usage of available frequency bands, which currently is a scarce resource, and thereby to promote both competition in infrastructure and market development. The Authority wishes to realize these goals through the licensing of spectrum trading, i.e. promotion of the development of secondary trading, as well as through easing the licensing procedure, opening further license-exempt bands, and enabling free usage of the technology/service selected in the given frequency bands. The regulatory tasks connected the secondary spectrum trading include definition of ownership rights, meeting the increasing need for interference management, and the coordination of market information. The term Next Generation Networks stands for a currently evolving packet-switched transmission-based new network system that enables the support of several simultaneous broadband services of guaranteed quality, while enabling service provision and transmission functions independently of each other. It offers unrestricted access to different service providers for users and, at the same time, it supports generalized mobility, which extends to all services requested by users. NGN may provide a potential drive for increasing competition at service and application levels, prerequisite of which is, however, that the NGN owner uses open standards. The Authority’s intention is to keep supporting this. The Authority considers to be a critical task to adapt the means for service competition to the NGN infrastructure. This will be required since, in the NGN network topology, the location of the last active equipment in the fixed network will change, which will result in a change in the possibility of co-location, and thus in the way of meeting unbundling and interconnection obligations. A number of other changes forecast the risk of incumbent service providers’ applying delaying tactics, which may present obstacles to the practical realisation of service competition for years. Therefore, the Authority’s goal is to prepare in time for the technical, legal and financial adaptation of the applicable regulatory instruments with reference to NGN. Nevertheless, by laying down the framework of NGN regulation ahead of time, the Authority’s goal is to minimize the regulatory risk of investment required for setting up the NGN and to ensure predictability for market players in general.
Page 1 and 2: 1 1 The Hungarian Communications Ma
Page 3 and 4: CONTENTS Contents 1. NHH’s role i
Page 5 and 6: 02 03 years. This year one of NHH
Page 7 and 8: 04 05 NHH’s role in the regulatio
Page 9 and 10: 06 07 affected parties have failed
Page 11: 08 09 Figure 1.1: NHH’s regulator
Page 15 and 16: 12 13 2.1 Changes in institutional
Page 17 and 18: 14 15 Market analysis decisions of
Page 19 and 20: 16 17 Decision Round 1 Year Round 2
Page 21 and 22: 18 19 purposes of WMAN, which was c
Page 23 and 24: 20 21 sional knowledge but also for
Page 25 and 26: 22 23 There is the possibility of p
Page 27 and 28: 24 25 lution is well demonstrated b
Page 29 and 30: 26 27 surveillance activity. Servic
Page 31 and 32: 28 29 a member of the Council of Ad
Page 33 and 34: 30 31 Electronic communications is
Page 35 and 36: 32 33 Figure 3.5: Monthly average t
Page 37 and 38: 34 35 Fixed location services In Hu
Page 39 and 40: 36 37 Figure 3.11: Changes in the n
Page 41 and 42: 38 39 Figure 3.15: Changes in the n
Page 43 and 44: 40 41 Figure 3.18: Cable television
Page 45 and 46: 42 43 Results and influence of mark
Page 47 and 48: 44 45 hindered on the retail side,
Page 49 and 50: 46 47 Figure 4.2: Voice traffic sha
Page 51 and 52: 48 49 gated price index) above the
Page 53 and 54: 50 51 Figure 4.8: Monthly spending
Page 55 and 56: 52 53 the Board imposed the obligat
Page 57 and 58: 54 55 Figure 4.10: Sales of ADSL se
Page 59 and 60: 56 57 stimulation regarding the dev
Page 61 and 62: 58 59 Figure 4.14: Broadband penetr
Page 63 and 64:
60 61 The OECD study also contains
Page 65 and 66:
62 63 postponed to the distant futu
Page 67 and 68:
64 65 mately introduced EU level re
Page 69 and 70:
66 67 According to the obligation i
Page 71 and 72:
68 69 4.5 Regulatory means applied
Page 73 and 74:
70 71 The implementation of the reg
Page 75 and 76:
72 73 Epilogue Today, electronic co
Page 77 and 78:
74 75 28 The full unbundled access
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