Discussion Papers

Marcus Weinkopf

Ökonomie des ONP-Konzeptes
Nr. 118 / November 1993


Open Network Provision - ONP - is one of the most fundamental EC initiatives that aims at designing a common European framework for supply structures, service options, and national regulatory instruments in the telecommunications services sector. ONP refers to three basic parameters of telecommunications services that are essential for service providers and for end users, i.e.: technical interfaces, usage conditions, and tariffing principles. By means of defining certain basic principles for the design of these parameters on the national level, the Commission seeks, on the one hand, to promote the development of new competitive services, and, on the other hand, to ensure fair market conditions for all players. Moreover, the Commission regards the harmonization of a common set of basic services as an essential precondition for the development of a Trans-European telecommunications infrastructure.

The first part of this paper deals with the development of the ONP concept taking into account the roots of the inititiative with respect to industrial and infrastructural policy and to competition policy. The second part of the paper analyses the political principles underlying ONP and their economic consequences for market participants in European telecommunications.

The (potential) applications of ONP are not restricted to the current monopoly respectively reserved services but can be extended to further market segments in the competitive area if the EC identifies a necessity for regulatory intervention. The current ONP applications do - at least in the case of the Federal Republic of Germany - not lead to notable regulatory interventions in service areas originally deregulated on the national level. It must, however, be noted that the flexibility of the ONP concept that allows appropriate regulatory reactions to dynamic changes of the market environment bears, on the other hand, serious risks of over-regulation and over-standardization in such markets, in which social demands and fair market conditions could also be satisfied without any intervention. In the process of the further development of ONP and a possible extension to further markets, a general problem with social or governmental market interventions could gain crucial relevance: The availability of governmental rights for intervention, combined with effective instruments to do so, often promotes a trend for quick action - without sufficient evaluation of the necessity for such action which should in many cases include a test of the outcome of unregulated market conditions. Therefore, extensions of ONP into new service areas as well as the interpretation of the current ONP documents with respect to the need for new regulatory standards should be carefully analyzed in each case .

Only German language version available.

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