New ex ante remedies against margin squeeze

Focus Workshop on 26 November 2012, Brussels

New ex ante remedies against margin squeeze

At 26 November 2012, at the premises of Gibson Dunn Brussels, WIK Consult has organised a workshop on Margin Squeeze Testing. This topic is steadily gaining momentum as it could play an important role in the upcoming new Commission Recommendation on Cost Methodologies and Non-Discrimination expected in early 2013. Following recent statements by Vice President Kroes, SMP operators may get more pricing flexibility for wholesale services, but at the same time will face more stringent oversight against discrimination and margin squeezes.

There was a healthy interest from alternative operators all across Europe as all chairs were filled. Dr. Ulrich Stumpf started the day by presenting the NGA context of margin squeeze testing and Dr. Karl-Heinz Neumann continued with the economic framework of the test and the essential choices therein that impact the effect of the test. The morning ended with Dr. Thomas Plückebaum discussing the appropriate tools for measuring margin squeezes and reviewing some practical examples. Between the presentations was a healthy amount of discussion on the differences between countries and how specific situations could be dealt with.

After lunch, Peter Kroon presented an overview of the different approaches in Europe towards Margin Squeeze Testing, introducing four case. Three representatives from regulatory authorities and one alternative operator were presenting their approach to and experience with margin squeeze testing. There was a lot of discussion as participants had the opportunity to ask many practical questions putting their own situation in the right context.

At the end of the day, participants went home with a wealth of practical information and hopefully well equipped for the coming Recommendation from the Commission.

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Peter Kroon
Phone: +49 2224 9225-58
Fax:      +49 2224 9225-68
p.kroon(at)wik.org