Neutrality – definitely my favourite sin

10/12/16

Like everyone else in the packed room we much enjoyed the 2nd Chillin’ Competition conference on November 21st. The topic of the day was neutrality, which is why the programme featured the Swiss flag. A symbol that inspired today’s entry (which is not to be taken entirely serious).

Should someone force us to pick three favourites among a wealth of fine presentations our votes would go to Bill Batchelor, José Luis Buendía and Jorge Padilla… in alphabetical order. As luck has it, all three put up their slides on the blog’s website.

But let us briefly touch upon the words of one of José Luis’s fellow panellists and merry tweeter @johnfingleton1. The former head of the Irish Competition Authority and the OFT made his run very wide to bash regulators interfering with competition, which, he said, was ‘going backwards’ in key markets such as 4G due to ‘over-regulation’.

When some of us set out to fight the monopolist telecoms dinosaurs (known as ‘telecommunications organisations’ or ‘TOs’) back in the late 80s, our main goal was clearly to get their market share down. Understandably, as this share was 100%.

Thirty years on, we wonder is a 40% market share by a TO still a sign of regulatory failure, now by excess, or not simply a reflection of the fact that incumbents started with deeper pockets and stayed in a game marked by a severe capital-drain, e.g. through spectrum auctions. Stayed on sleeker and incomparably more efficient, as it were.

Also, thinking of John’s push to have BT spin off OpenReach, we wonder what remedial effect this might have. Is control over fixed networks still a key driver of competition or, put the other way round, is such control by a TO an obstacle to achieving “an inclusive gigabit Europe” (whatever that means)? Folks like Timo Höttges strongly deny this – but then he would, wouldn’t he. In any event, we do believe that the really bad news for EU telecoms is elsewhere. Here, for instance.

So what about neutrality? Why not look at market dynamics rather than TO market share – let’s put red rags of the past behind us. Which is what Barça fans plead when local football rivals wave the above flag (that reads “go away!”) at them – as a friendly reminder of the fact that Barça’s founders were British, German and Swiss expats who, being protestants, were not allowed to play in catholic Catalan clubs.