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Convergence, Disruption, Growth: new regulatory trade-offs andchallenges
Antonio NicitaAutorità per le garanzie nelle comunicazioni, Italy
And Sapienza UniversityRome
International Symposiumon
Converging Technologies and Disruptive Communications - MovingForward10-11th September 2018, Bangkok,Thailand
Issues
1. The New “Fundamental transformation”
2. From (market) access to (contract) bargainingpower
3. From supply-sided to demand-sided regulatorypolicies
4. BAU, Doing wrong, Doing too little, Doing too much
5. Institutional Responses and globalcoordination
2
1. A new “Fundamental, greattransformation”
• The Great Transformation, (Karl Polany,1944)• prior to the great transformation, markets played a very minor role in human
affairs and were not even capable of setting prices because of their diminutivesize: changes in the role of the State, the role o the market, the consumer-citizen behavior
• The ‘fundamental transformation’ (Oliver Williamson,1985)• From market to monopolistic/monopsonistic relationships due to ex-post
endogenous exitcosts
3
IDC Data Age 2025 – April 20174
86,59
7,83
4,541,040
10
80
70
60
50
40
30
20
90
100
200
1 200
3 dic
apr gi
u gi
udi
c di
c di
cgi
u lug gi
udi
c di
c di
cgi
u gi
u dic
ìgi
u
dic
gi
udi
cgi
u di
c di
cgi
u gi
u gi
udi
c di
c apr
2004 2005 2006 2007 2008 2009 2010 2014 2015 2016 2017 2018
Google Yahoo!
2011 2012 2013
Microsoft (MSN/Bing) Altri
5
9,22
6,04
2,34
9,8
0
10
100
90
80
72,1270
60
50
40
30
20
mar giu
se t dic
ma
r giu
set
dic
ma
r giu
set
dic
ma
r giu
set
dic
ma
r giu
set
dic
ma
r giu
set
dic
ma
r giu
set
dic
ma
r giu
set
dic
ma
r
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
F acebook P interest Twitter MySpace Instagram Altri
6
2009 201720162014 201520132010 2011 2012
179.628
138.809
102.062
63.98521.642
2.516 4.507
224.801
268.832
Anni
Numero di downloadcumulato
(inmilioni)
=10.000
Number ofApps
Downloaded
MIllions
years
7
8
9
Some insights on Italy
10
• Fixed Telecommunciations (four main operators, plusFWA)
• Mobile Telecommunications (three main operators, plusnew entrants, MVNO) – competitive access to spectrum
• TV Broacasters: (three main FTA nationwide, plus new entrant), one dominant PTV, plus new entrants (Netflix), somedeclining (Premium)
• Press (several nation wide, some polarized,declining)
• Postal services (incumbent plus new entrants, declining volumes)
Variazioni 2017 - 2016 (%)
Rete mobile wholesale -4,0
Rete fissa wholesale -1,7
Rete mobile retail -1,6
Rete fissaretail 5,4
Internet 12,8
Periodici -1,6
Quotidiani -8,9
Radio -0,6
TV a pagamento -0,2
TV in chiaro -3,5
Corriere espresso 11,7
Altri servizi postali 11,5
Servizi in esclusiva 15,0
Servizio Universale -12,6
Telecomunicazioni +0,9%
Media -0,9%
Servizi Postali +6,6%
Variazione totale ricavi +1,2%
11
Indici prezzi generali
109,5
128,1
107,2
91,3
80
70
90
100
110
120
130
140
150
160
170
mar giu
se
t 2014
dic mar giu
se
t 2015
dic mar giu
se
t 2016
dic mar giu
se
t 2017
dic ma
r
201
8
Indice generale dei prezzi
Servizi regolamentati locali
Servizi regolamentatinazionali
ISA: Indice di sintesi dei prezzi nelle comunica zioni (*)
12
33,3% 28,6% 50%
28,6%25%
20%
12%
33,3% 28,6% 50%
28,6%
25%
20%33,3% 28,6%
28,6%35,7% 46,7%
14,3%
14,3% 14,3%
13,3%
33%
49%
5%
0
20
40
60
80
100
120
140
160
180
200
700 800 900 1500 (SDL) 1800 2100 2600 3400-36003600-3800
Ass
igned s
pect
rum
[MH
z]
Frequency bands[MHz]
TIM Vodafone Wind Tre Iliad Tiscali-Aria Linkem Others FWAoperators To be assigned by sept. 2018
Others
108,4
8,3%Linkem; 98,3
; 7,5%
Vodafone;
102,4;7,8%
Wind Tre
; 112,0; 8,5%
TelecomItalia
224,0
17,1%
OpEnFiber
320,6
24,5%
Eolo
345,2
26,3%
Assigned spectrum [MHz, normalized by population]
for WLL systems (mainly backhaul) in the 26 and 28 GHz
26 and 28 GHzbands
+1 GHz to be assigned bysept. 2018
(26,5-27,5 GHz)
f
Spectrum in the 5G pioneer bands to be auctioned by sept. 2018 (RoU until 2037)RoU
until2
022
RoU until2029
Quote di ascolto nel giorno medio nel mese di marzo 2018 (%)
+1,4
Differenza vs. marzo 2017 (punti percentuali)
Ra
i
Media
set
7,6
Altri
Dis
covery
La
7
0
21°C
entu
ryFox
Sky
Ita
lia
6,2
12,6
-0,2
0
3,5
10
20
36,3
32,5
30
-1
+1 -0,2-0,7 -0,2
14
2.6212.340 2.181
1.945 1.914 1.880 1.799 1.789
323
214217
185 171 170 167 168
2.944
2.5542.398
2.131 2.085 2.049 1.966 1.956
500
0
1.000
1.500
2.000
2.500
3.000
3.500
mar-14 mar-15 mar-16 mar-17 giu-17 set-17 dic-17 mar-18
Copie digitali emultiple
Totalepagata
Totalevendite
15
Audience dei principali dei principali Social Network
per utenti unici (feb-14, mar-18)
24,6 24,4
27,1
12,3
15,0
9,4
11,09,7
9,3
7,2
6,5
7,9
6,15,75,5
5,0
2,1
1,9
4,5
2,42,0
1,4 1,71,6
0
5
10
15
ni
20
25
feb-14 feb-15 mar-16 mar-17 giu-17 set-17 dic-17 mar-18
Google+
Tumblr
Snapchat
16
2. From (market) access to (contract) bargainingpower
• Once were access andnetworks…
• Once was co-evolution between networks and contents (broadcasters)
• NOW:
• Changes in vertical and value chain: Platforms, Big data,Artificial intelligence• New competitiveadvantage• New ‘marketpower’• Splintering and verticalintegration• 5G Challenge• Pluralism 2.0 (falsehood, hatespeech,minorities…)
• From access to interoperability• From market power to multi-sideddominance
• Click away versus path-dependency innovationpatterns
17
3. From supply-sided to demand-sided regulatorypolicies
• Bounded rationality on consumers’side
• Switch, (individual and collective) switchingcosts
• (price and non price)Discrimination
• Gate-keepers and Captiveconsumers
• Nudge, a paternalisticregulator?
• Opt-in versus Opt-out policy?Chilling effects?
• Liberalization on the demand side (consumer’s bargaining power)?• Example ofApps that provide portability and bargaining power to consumers
• How to deal with competition and pluralism in content?
18
4. BAU, Doing wrong, Doing too little, Doing too much
• Business As Usual• From Telco and Mediato convergent multi-side platforms• Competition for attention (big data), for captiveconsumers• Value chain versus traditional relevant markets (andmarket power)
• Oligopolistic environment• Entry costs• Exit costs• Inefficiency (allocative and consumerwelfare)
• Antitrust/Privacy Policies
• How to deal with Pluralism2.0?
19
4. BAU, Doing wrong, Doing too little, Doing too much
• Doing wrong, doint toolittle• Wait and see while continuing with old regulation
• Level playing field
• Market value
• Rents
• Big Data as an exclusive matter of privacy, when (also) as an economic value (and market) – example of portability
• Exclusive focus on single dominance, while joint dominance does emerge in new markets and/or businessmodels
• Setting the boundaries of regulation versus new business models, from supply side to demandside
20
4. BAU, Doing wrong, Doing too little, Doing too much
• Doing toomuch
• LenghtyAntitrust investigation (i.e. the European Google): how to reconcile with business models?
• GDPR as a unique ‘market regulation’ for big data
• Using oLd regulation for new purposes (i.e. European copyright approach ‘only’ against big platforms), chillingeffects?
• Intrusive approach towards on-line contentregulation
21
5. Institutional Responses and globalcoordination
• Change in regulatory approaches andcompetences
• Focus on behavior on supply and demand side, general principles
• Convergent authorities to face challenges indigital society• Two meanings ofconvergence
• A unique digital authority for regulating telco, media, digitalplatforms?• A real discipline device againstnew dominance
• Avoiding chilling effect on innovative developments that benefit society/the economy
• Example of coordination in Italy (Indagine conoscitiva congiunta sui Big Data)
• Value of bigdata
22
