Trends in Telecommunication Reform 2010-11 Box 3.2: Imposing targeted ex ante regulation on the physical layer • Regulation should reflect national conditions and goals Different countries have different socio-economic, geographic, and political circumstances. In addition, their level of infra-structure development can vary widely. As a result, solutions to reach national goals that were effective in one country may not translate to another and must be tailored. Therefore, imposing ex ante regulation will require a fact-based assessment of a country’s the market conditions and entails the collection, review and analysis of detailed information in order to at-tempt to accurately predict future behaviour and outcomes. Ex ante regulation should be targeted to address the specific problem(s) detected. A clear and accurate demarcation of the circumstances where market forces will not deliver desirable outcomes will be key to implementing targeted ex ante regulation in the coming decade. • Regulation should first attempt to resolve market failure at the wholesale level In liberalized ICT markets, any ex ante regulation should be primarily focused on wholesale services and facilities. Where a regulator identifies competitive concerns at the retail level, narrowly-tailored regulation of wholesale inputs identified as bottlenecks is generally preferred, allowing other links in the value chain of end-to-end services to be more responsive to the competitive process. This approach ensures that competitive concerns at the retail level are adequately addressed while al-so limiting ex ante regulation to those areas where the benefits to consumers cannot be achieved using ex post regulation. • Regulation should be periodically reviewed and phased-out when warranted The dynamic nature of ICTs requires regulators to monitor and periodically reassess competitive conditions in the market-place. Technological changes can quickly impact the ICT market, displacing the rationale for ex ante regulation or shifting its focus towards other links in the ICT value chain. Periodic monitoring requires regulators to devote significant time and re-sources to reviewing and revising targeted ex ante regulation since static regulation may stifle innovation and investment. Given their resources, when adopting ex ante regulation, regulators should strike the right balance between safeguarding the interests of consumers and promoting long-term development of the sector. Although ex ante regulation may be neces-sary in the short term, the goal is to reduce ex ante rules as competition develops and, ultimately, for ICT services to be dis-ciplined primarily by competition law. Source: Telecommunications Management Group, Inc. (TMG) Wireless networks market conditions, may allow wireless net-works to compete against wireline technologies in the provision of broadband services for the first time within the next decade. In some countries, such as in Austria, Portugal and Finland, such competition has already emerged (see Box 3.3). The spectral efficiency of wireless technologies has increased by a factor of roughly 40 since the launch of second-generation (2G) mobile wireless services. 18 These technological advances, depending on country-specific Figure 3.6: Passive and Active Infrastructure Sharing Access to rights-of-way, poles, ducts, trenches, sewers and towers. Benefits include reduced roll-out costs, deployment times and operating costs, as well as less environmental stress due to less digging or placement of antennas on towers, buildings or poles. •• Passive Sharing Parts of the network (usually of the dominant/SMP operator) must be available to competitors at regulated or wholesale rates. May include local loop unbundling, bitstream or wholesale access and/or resale. •• Active Sharing Source: ITU Chapter 3 91