broadband strategies handbook.pdf - Khazar University

of ICT infrastructure, reducing duplicative mobile towers that affect a city’sskyline, for example. However, close ties and information exchangesbetween providers that participate in sharing agreements may create concernswith regard to competition, as they could facilitate collusion andreduce competition at the retail level if sufficient control over the networkand services is not maintained and the provider’s ability to differentiateretail offers and innovate is curtailed. When promoting voluntary sharing,regulatory authorities and policy makers must balance the potential benefitsand costs of such measures, in order to achieve the desired objective ofpromoting more competitive markets and increased rollout of services.On the wireline side, several governments are promoting a variety ofshared infrastructure approaches. In the most interventionist cases, such asAustralia, New Zealand, and Singapore, policy makers have directed theestablishment of a single, open-access network that will provide infrastructureservices on a wholesale basis to a variety of downstream service providers.Rather than establish an entirely separate network, France has taken amore regulatory approach by setting up sharing requirements and obligationsfor firms building out fiber networks to more rural areas and to apartmentbuildings. 21 Other countries are also considering regulations that willrequire incumbent operators (usually those that hold significant marketpower or are former monopoly providers) to make their infrastructureavailable to alternative carriers. This concept might also be extended toother, often government-owned, entities, such as power companies thatmaintain towers for electricity distribution.Opening Vertically Integrated MarketsBenefits and Costs of Vertical IntegrationVertical integration, in which a single firm controls multiple levels of thesupply chain, is commonly found in ICT markets around the world andoften involves the same firm owning and operating network infrastructureas well using this infrastructure to offer retail services to end users. Twomain advantages for a v ertically integrated firm is the ability to achievehigher economies of scale and lower costs of production by reducing thecosts of coordinating upstream and downstream activities. In a competitivemarket, these efficiencies can benefit consumers through lower retail prices.However, vertical integration may create barriers to entry for new competitors,particularly in the telecommunications sector, where a dominant operatormay control essential infrastructure (Crandall, Eisenbach, and LitanLaw and Regulation for a Broadband World 121