Page 80 - Trends in Telecommunication Reform 2016

for private-sector operators looking to roll out a success, they will be forced to provide access
new broadband networks. In emerging markets, on terms that don’t recognize those risks. Other
where there is often a policy priority to push out possible approaches include:
electricity, road and rail networks into more rural
areas, there can be a particular synergy with • providing long-term regulatory commitments,
telecommunication operators seeking to build out such as the Australian regulator’s acceptance
infrastructure in the same areas. of NBN Co.’s 27-year special access
undertaking , which provided a high degree of
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certainty for NBN;
2.5.2 Use of spectrum licensing
• applying a utility-style regulatory asset base
The dynamics are different in the mobile sector. approach to the new broadband network,
Here, a lighter regulatory touch may be all that providing a revenue ceiling for the new entity;
is required from the government to encourage
network sharing. One of the most potent means • providing the shared network operators with
available to governments is setting 4G spectrum a period of exclusivity before requiring them
licensing conditions. Spectrum is in high demand to offer open access, which may be seen as a
and, through licence conditions, governments fair trade-off for operators’ assumption of risk
can facilitate sharing. Licence conditions are and commitment to invest and deploy the new
not without costs, of course, because they may networks; and
potentially reduce the governments’ proceeds
from auctions or other licensing fees. • enabling the shared network operators to
access the network at the passive layer, with
One approach to promoting sharing is to require third parties being entitled to access only at
each licensee to provide nationwide coverage the active layer – but otherwise on a non-
while allowing network sharing. This can create a discriminatory basis.
strong incentive for licensees to share, particularly
in higher-cost, low-ARPU areas. Alternatively, the Regulators may be more prepared to provide
licence conditions may require each licensee to regulatory certainty to a joint venture in which
build a network in its defined geographic licensing no single operator is dominant rather than to a
area, while allowing sharing or roaming in other single owner with a new network. At the very
areas. least, governments should review the regulatory
environment to ensure there are no unintended
roadblocks that may undercut the potential for
2.5.3 Regulatory certainty commercial network sharing and co-investment
arrangements.
As noted earlier in this chapter, the question of
whether co-investment arrangements should be
subject to open access by third parties is a subtle 2.5.4 Mandated network sharing
one. On the one hand, open-access policies are
usually thought to promote competition, but this Some regulators (e.g., Colombia, France and the
has been true normally in the case of existing United States) have mandated mobile network
networks with long-sunk costs. When it comes to sharing or roaming obligations, often on a
new investments, threatening to impose stringent temporary basis and usually for the purpose of
open-access requirements may discourage matching existing coverage rather than increasing
operators from investing at all. coverage. There may be merit in these mandates
in brown-field environments, but there are doubts
Governments can address this risk by providing about whether mandated network sharing is
regulatory certainty for co-investing entities. likely to be productive in encouraging green-field
Regulators could, for example, clarify that access investment.
pricing can take into account the build and
demand risks at the time of investment. One of Again, this may come down to regulatory certainty.
the major concerns of investors in new broadband As long as the investing operator building a new
networks is that, if they build a network and it is network in a green-field environment is certain

62 Trends in Telecommunication Reform 2016