broadband strategies handbook.pdf - Khazar University

data services become increasingly dominant, per minute costs for voiceservices are expected to fall. Second, the ongoing worldwide trendtoward regulating termination rates to reflect the underlying incrementalcosts of termination, especially for PLMN operators, has resulted in asignificant reduction in termination rates in many countries. For example,recent regulatory proceedings in countries such as Colombia, Kenya,Mexico, and Nigeria have reduced rates to levels comparable to thoseprevalent in the EU. As BEREC notes, “The lower the costs per minuteand the closer they are to zero, the less difference between CPNP andBAK.” This may also facilitate a transition to IP-based interconnection inmany countries.Access to Infras tructureThe Regulation versus Investment DebateIn designing policies to foster long-term, facilities-based competition, regulatorsare tasked with balancing the objective of promoting competitionand entry with the need to maintain incentives for investment in newinfrastructure and innovation. This entails identifying facilities that arenot easily duplicated (that is, bottlenecks) and determining if they arecapable of affecting competition in downstream (that is, services) markets.Such a determination would call for the regulation of such bottlenecks togive access to competitors on a nondiscriminatory basis and at cost-basedprices, as fostering their duplication would either deter entry or result ina socially wasteful expenditure of resources. The success of such policiesultimately tends to pivot on the regulated prices and terms of access tobottlenecks.In the absence of functioning market mechanisms, getting accessprices just right is a huge challenge for regulators and will affect theincentives of both new entrants and incumbents. If prices are too low,entrants will have no incentive to invest in their own infrastructure, evenwhen it is economically viable and efficient for them to do so. If accessprices are too high, competitors either will not enter the market or willchoose to deploy their own networks, resulting in inefficient duplicationof networks. Conversely, incumbents may refrain from future investmentin their networks if their facilities are open to competitors at low rates, asany advantage derived from these investments would be available torivals, while risks associated with such investment would be borneexclusively by the incumbent.Law and Regulation for a Broadband World 111