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The telecommunications market is among the most regulated markets of all, and the danger of over-regulating is obvious. Excessive regulation can lead to market disturbances, such as decreased willingness for R&D and investments. Consumers and society will be better off if sector-specific regulation is kept to a minimum and be used in exceptional circumstances only.
These comments are included in the Report of the Nordic competition authorities on Telecompetition, which was published in Copenhagen today. The report is assembled in the working group established in August 2003, with representation from all five Nordic competition authorities. The working group has examined the telecom markets in the Nordic countries, and analysed the competitive problems in the sector and the effect of market structure on the service prices.
Competition restraints in broadband markets
The majority of competition restraints have been detected in the rapidly growing broadband service markets in recent years. Competition legislation provides good tools to intervene with and eliminate them. Ensuring the smooth operations of the broadband service market is among the main tasks of the competition authorities in the telecom market.
In the past few years, the FCA has been determined to intervene with competition restraints in the broadband markets. Most of them were eliminated in the context of the FCA’s broadband project last year but in some cases the FCA has to resort to the competition jurisprudence . The FCA will issue a press release on its measures involving the broadband market shortly.
Options available in long-distance telephony
Competition in long-distance and international telephony functions fairly well. However, the prices of foreign calls are high when compared to domestic calls in all Nordic countries. There are cheaper options available than those offered by the traditional service providers but their market shares have remained small despite the low prices.
Attempts to introduce competition into local calls have so far failed. Together with mobile calls, the increase in IP-telephony offered through the broadband connections is likely to create competitive pressure in the prices of calls offered through the fixed network.
Foreign calls expensive in mobile calls markets as well
In the mobile telephony market, the potential competitive problems are related to the service charges collected from the operators for the use of the network. For example, the report states that the tariffs for roaming and mobile termination may contribute to high prices of foreign calls in the mobile telephony market.
The FCA is currently also investigating the state of competition in the mobile telephony network market.
Cooperation between authorities important
The working group finds it important that the competition and communications authorities in the different countries cooperate to solve the competitive problems in the field. For the FCA, this implies cooperation with the Finnish Communications Regulatory Authority, the EU Commission and the competition authorities from the other EU States. The cooperation has been tight for several years.
Report from the Nordic competition authorities
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