Some critical reflections about access obligations under the European communications framework

Communications & Strategies, Oct, 2007 by Natali Helberger

European communications policy has a tradition of relying on access obligations as primary tool to discipline exclusive control over so called bottleneck facilities. The overarching goal behind the application of access obligations in the European communications sector is to foster open and competitive markets with a broad range of diverse, interoperable services for consumers (European Commission, 1999, p. 25). The European Access Directive (1), part of the revised Communications Framework, continued this tradition and empowered National Regulatory Authorities (NRAs) to impose access obligations on all kinds of communications networks, services and technical facilities. The Access Directive has been reviewed in the first half of the year 2006. In its subsequently published Communication on the Review, the European Commission confirmed the overall adequacy and efficiency of the Access Directive (European Commission, 2006a; 2006b). On this occasion the European Commission also stressed once more the importance of access rules as a tool to realize consumer welfare, competition and user rights, notably the right for users to access and distribute lawful content (European Commission, 2006b, pp. 32-33).

This article will question the broad support in European communications law for access obligations as standard answer to bottleneck problems in digital broadcasting. Using the example of bottlenecks in digital broadcasting, it will show that access obligations that were successfully applied to traditional bottleneck situations are not necessarily the best or most effective way of guaranteeing openness in some of the "newer" communications markets. Finally, it will suggest that in the light of the changing role of users in broadcasting markets, a bottom-up approach that aims at enhancing the role of consumers as active market participants might be the preferable course of action.

Mandated access in digital broadcasting markets: background and rules

The problem of exclusive control over services or facilities that are crucial gateways for market access is a central problem in the regulation of communications markets in general, and broadcasting markets in specific. Note that exclusive control over facilities and services must not per se pose a competition or information policy problem (even if exercised by a party with dominant market power). Exclusive control can be acceptable from a competition and information policy point of view, unless the effect of such control is market foreclosure and restricted consumer choice. This is an important conclusion from general competition law cases that deal with so called essential facilities situations and that have ultimately influenced sector specific access rules (McGOWAN, 1996, p. 804). The notion of essential facilities is used to describe a facility or infrastructure which is essential for providing services to the market and which cannot be replicated by any reasonable means. Refusals to supply an essential facility can lead to a dominant party being required to grant access to its facility to one or more competitors in the market in question under general competition law (specifically for the communications sector see European Commission, 1998, para. 90 subsq.). The most extreme case of essential facilities is natural monopolies. Natural monopolies describe situations in which demand for a particular services or facility can be best and most efficiently served by a single operator. Usually, this concerns resources whose capacities can be extended only with difficulties, due to the technical and economic particularities of a sector. Telecom networks are often cited as one example of a sector that is susceptible to natural monopoly situations (HERDZINA, 1999, p. 41).

To prevent the anti-competitive use of such telecommunications networks was the mission of the original Open Network Provisions (ONP) (2) In this context, access obligations were a tool to guarantee that new private entrants would be allowed on the incumbent's telecommunications network to provide telecommunications services to end-users. Sector-specific access rules for the broadcasting sector followed with the 95/47 Directive on Television Standards (3). It's Article 4c would mandate access to conditional access systems used by pay-TV operators. The provision responded to fears by public broadcasters and other industry players voiced that control over conditional access facilities might give major pay-TV operators the means to exclude other broadcasters from market access (KAITATZI-WHITLOCK, 1997). Aspects of consumer protection were also put forward: consumers must be offered access to a variety of content while being protected from incompatible equipment that would hinder their reception of other, competing services. The access obligation in Article 4 c) of the 95/47 Standards Directive applied automatically and irrespective of market power to all operators of conditional access (CA) services. Six years later, these provisions were transformed more or less literally into Article 6 of the Access Directive, and extended in Article 5 (1) (b) to also cover other facilities in digital broadcasting, such as Electronic Program Guides (EPGs) and Application Program Interfaces (APIs).