EuroWatch
July 15, 1998
EU Annual Workshop on Competition Policy to Focus on Communication/Information Networks
By Stuart N. Brotman

The 1998 EU annual workshop on competition policy will be held in November at the European University Institute (EUI) in Florence. This forum was established three years ago by EUI Professor Claus Ehlermann, former head of the European Commission's competition department (DGIV), and the fellow EUI law professor Guiliano Amato, the former Prime Minister of Italy and head of its antitrust authority.
The two-day workshop will bring together top-level regulators, academics and commercial experts (i.e., lawyers and consultants) from around the world, as well as some key industry representatives, to discuss critical legal and policy problems concerned with market power and market structuring.
In prior years the workshop has addressed broad issues - implementing competition policy in a federal context and the objectives of competition law - but this year, it will focus on the problems raised by a particular type of market: communications/information networks.
The issues and questions to be addressed by the workshop as a whole will be focused on the policy goal of achieving and safeguarding conditions for fair and efficient competition in a complex network market, and on the role and nature of the rules to be applied in this regard. The substantive scope (i.e., the range of commercial behavior under consideration) will concern agreements, both of a horizontal and vertical nature, that involve control of/access to "bottleneck" network facilities which represent essential gateways between the provision and consumption of communication services.
The first workshop panel will consider the key network access bottlenecks that exist between growing numbers of service providers and their potential customers in evolving communications and information networks. It will focus on how to ensure fair and efficient terms of access to bottleneck network facilities when the gatekeeper has no incentive to grant them. Among the key questions its participants will discuss are:

• Why is this a problem? What are the fundamental and peculiar economic difficulties encountered? Are these common to the different bottlenecks identified? How particular are these in comparison to access bottleneck problems in other sectors?
  
• How relevant, and how useful, is the application of the essential facilities doctrine (or any other competition law doctrines)?
  
• How is "non-discrimination" defined? How should it be defined? Does "non-discrimination" means "equal treatment"? If not, what is the difference between "undue discrimination" and "fair discrimination"?
  
• To what extent are "structural" regulatory solution (i.e., obliging unbundling of the access control function from the integrated service business) appropriate/effective/necessary as regards implementation of these principles? What level of unbundling (i.e. accounting separation, legal separation or full structural separation and financial divesture) should be regarded?

Panel two will focus on regulation type issues, such as those raised by partnership agreements, acquisitions and integration involving favored terms of access to the network bottleneck. Among the key questions its participants will discuss are:

• What are the key challenges concerning the application of competition law to agreements involving communications networks? Are these problems particular to this sector? Is it appropriate to define market power/bottleneck control only by references to "intermediate markets" (e.g., conditional access systems) in the absence of reference to actual impact in the final product markets (e.g., TV programs)? Can such impact be predicted in advance, given that the product market in these cases is generally not yet developed?
  
• To what extent are decisions in particular cases influenced by considerations that are not of a purely "competition" nature? (E.g., policy, development of technical standards)?
  
• How will/should the application of competition law in this area develop in the future?
  
• How critical is the need for more international cooperation between competition authorities in this area?

While the questions defined for panels one and two concern what the rules are or should be, panel three will be concerned with the institutional and legal questions of who applies (and who should apply) the rules, and with what authority. What type of institution? How sector specific? At what level?
Too often the question of "who does what" gets confused with the argument about "what is to be done" and "how." While the "who does what" question is in theory a second-order concern, it is, in practice, the question that is most loaded politically. It tends to become the implicit, if not explicit, focus of contention among policymakers in discussions about application of competition law in this are since it impacts on the very powers, competence, and indeed, career interests of those involved.
This panel also will discuss what are the arguments for and against an EU level telecommunications regulator and how such arguments would applies to other regional groupings such as NAFTA. It will also explore institutional bases for greater cooperation, including who should cooperate (competition authorities and/or telecom regulators), whether such cooperation should be bilateral or multilateral, and what type of institutional framework (e.g., WTO, ITU, other) would work best.
Each panel will be comprised of leading EU and US communication sector regulators, competition/trade regulators, academic experts and lawyers/consultants. Additionally, a smaller number of senior industry representatives will be invited as discussants. Their role will be to react to the arguments of the panel participants. An article summarizing the workshop proceedings will be published in EuroWatch following the EU Annual Workshop on Competition Policy.