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(2) Sufficiency of SSR vis-à-vis competition law in the area of common interests
The “economic regulation” is concerned with competition problems stemming from access, interconnection and retail prices, which is an area of common interests both for competition authorities and regulatory authorities. However, drawing a borderline between SSR and competition law seems to be a “mission impossible”. Fortunately, as maintained by the Commission that effective cooperation may be a better way to resolve such substantive conflicts , it is not necessary to touch upon this sensitive substantive line. As discussed before, among the three-step analysis market definition is a significant step to differentiate the jurisdictions NRAs from that of NCAs. In addition, within the three-principle analysis for defining relevant market, the first two principles, i.e. the high and non-transitory barriers to entry and the non-dynamics to competition, aim to differentiate competition law from SSR from a substantive point of view while the third principle, the insufficiency of competition law, is more like a cooperation mechanism. Therefore, resolving the institutional conflicts between NRAs and their NCAs hinges on the practicability of the third principle.
The key point for establishing an effective cooperation mechanism is to clarify who has the power of last say when a negotiation fails to be achieved with regard to (in)sufficiency of competition law. Because this is a conflict between the NRAs and their NCAs, EC law is not competent to solve this issue. However, for the sake of a consistent single market the Commission may urge Member States to set up a relevant authority who can finally determine the sufficiency of national competition law or national SSR in case of a negotiation failure. This would to a great extent prevent the NCAs from applying national competition law ex post into already regulated issues by the NRAs.
To conclude, as far as the third condition for market definition, i.e. insufficiency of competition law, is concerned, it may be established that SSR is more sufficient to regulate the electronic communications sector than competition law in the area of spectrum allocation and social regulation. Nevertheless, with regard to economic regulation the Commission may suggest Member States to set up a dispute settlement system in case of a failing negotiation between the NRAs and their NCAs.
2. Ex post cooperative measures
The preventive measures cannot completely ensure national competition law would not intervene into already regulated activities. Reasons for this can be found from two aspects. First, the forward-looking approach of NCAs may render outdated regulation afterwards, which may be incompatible with competition law. Second, the dispute settlement mechanism under the 2002 Framework and competition law mechanism are two parallel procedures and therefore the applicants may bring two cases simultaneously before the two authorities based on the same facts.
Aware of the risk of duplication of procedures, the 2002 Framework provides that
“Member States shall ensure, where appropriate, consultation and cooperation between those authorities [i.e. the NRAs] and national authorities entrusted with the implementation of competition law […] on matters of common interest. Where more than one authority has competence to address such matters Member States shall ensure that the respective tasks of each authority are published in an easily accessible form.”
In order to implement the requirements within the 2002 Framework, most Member States have, however, spontaneously designed cooperation procedures at the national level. Concerning this issue Mr. Nicolas Petit made a great contribution in his paper The Proliferation of National Regulatory Authorities alongside Competition Authorities: a Source of Jurisdictional Confusion. In the following this paper will refer to his work.
The national cooperation mechanisms either take the form of law, and/or take the form of “agreement”, “protocols” or “memorandum of understandings” between NCAs and NRAs. So far there exist three categories of cooperation mechanisms at national level.
The first mechanism that exists in most MS requires NRA to inform the competition authority when the former has knowledge of anticompetitive practices in the sector they regulate.
A second mechanism requires NCAs to communicate with the NRA when the former are called to rule on a dispute that falls within the jurisdiction of the latter. In a majority of cases, this leads to the consultation of the NRA and/or to the possibility of producing a report. In other cases, the NCA will rely on the NRA for some aspects of its decisions. Finally, in some circumstances, this leads to the referral of the case by the NCA to its NRA.
Third, even MS that opted to entrust the regulator with the enforcement of the competition rules have designed cooperation mechanisms. In the UK, a rule of priority determines which of the NRA or NCA must deal with the case and reciprocal consultation requirements are set up. In case of conflict between the two authorities, the minister determines which authority shall have jurisdiction.
A majority of observers consider that these procedures have worked efficiently and that NRAs and NCAs do, in practice, effectively collaborate. In sum, the development of cooperation mechanisms at national levels certainly limits most of the risks of multiple proceedings before NRAs and NCAs. Consequently, the ex post cooperative measure at national level currently works well and can be kept unchanged as it is.
iv. Interim Conclusions
To sum up, this part brings forward four proposals in order to reform the 2002 Framework with regard to the jurisdictional conflicts between competition authorities and regulatory authorities. The first three aims to resolve the conflicts at European level while the last one is concerned with conflicts at national level. With regard to Article 5(1) of Access Directive and the ex post cooperative measures at national level, this paper proposes no change.
(1) The first proposal is to extend the Commission’s veto power to national regulatory remedies.
(2) The second proposal is to set up a two-step cooperation system with regard to NRAs’ failure to observe a market failure or failure to implement a SSR.
(3) The third proposal, which goes a bit further, is that a consultation procedure, similar as the Article 7 Procedure, may be initiated by the Commission when observing a market failure which is incompatible with EC competition law in the process of enforcing a certain SSR.
(4) The fourth proposal is to urge the Commission to draw a guideline in order to establish a more effective cooperation system between NRAs and NCAs in relation to the condition of (in)sufficiency of competition law. SSR is more efficient to regulate the electronic communications sector than competition law alone in the area of spectrum allocation and social regulation. Nevertheless, concerning economic regulation the Commission may suggest Member States to set up a dispute settlement system in case of a failing negotiation between NRAs and NCAs.
V. Conclusions
With regard to the EC model, i.e. the concurrent application of competition law and SSR, in the electronic communications sector, perhaps the best and ideal solution for resolving institutional conflicts is to establish a genuine ERA. The ERA with great possibility would be the Commission, in contrast with the role played by it according to Regulation 1/2003 in the area of the enforcement of EC competition law. Then such a centralized mechanism could allow the Commission to internalize the transaction costs caused by the current jurisdictional conflicts between competition authorities and regulatory authorities, both at the European level and at national level.
Unfortunately, this is hardly to be achieved in the foreseeable future. So far the second-best solution offered by the Commission is to promote the coordination between competition authorities and regulatory authorities. This coordination mechanism can also achieve certain desired results. However, unlike a centrally controlled administration mechanism by establishing a genuine ERA, a pre-established cooperation mechanism frequently, if not always, leaves residual institutional conflicts because the designer can not foresee all the problems. Corresponding to its defect, the effectiveness of a cooperation mechanism is occasionally interrupted provided that an unexpected problem takes place.
At this moment the EC is dealing with the improvement of its cooperation mechanism. The “2006 review project” has been launched; proposals of the Commission will be submitted to the Parliament and the Council of European Union at the 1st quarter of this year; and the revised cooperation mechanism is expected to achieve some positive results in 2009 - 2010, or perhaps even later. Nevertheless, taking into account the seemingly endless deregulatory process the adjustment of the cooperation mechanism will unfortunately be initiated continually in the future with no ending.
【注释】 See, International Telecommunication Union, World Telecommunication Development Report 2002, accessed on 11th September, 2006 and available at http://www.itu.int/ITU-D/ict/publications/wtdr_02/.
In practice there exist three main differences between SSR and competition law, which are that (1) the former intervenes ex ante, hence deals with unsatisfactory market structures whereas the latter, excluding merger control, intervenes ex post, and consequently deals with unsatisfactory behavior, (2) the burden of proof for SSR to intervene is lower than antitrust law and (3) from institutional perspective competition law and SSR are in most countries implemented by different institutions. In addition, regulatory authorities are normally imposed upon more mixed responsibilities than competition authorities, which in turn deepens the trench between competition law and SSR. For more details about these differences, see Alexandre De Streel, The scope of the economic sector regulation in electronic communications, Communications & Strategies, 2006 volume 62, pp. 147-167; and Christian Bergqvist, Sector specific regulation vs. general competition law, accessed on 16th November, 2005 and available at: http://www.jur.ku.dk/medarbejdere/christianbergqvist/sector_regulations_vs_competition_law.
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