"Significant Market Power" in the 5G Era

The pressing need for a new policy framework

5G deployment is introducing new market structures around the world with more to come.  In the UK, Vodafone and Telefonica are sharing active parts of their networks across some 2000 sites.  In Germany, one of the operators has looked closely at sharing its 5G network with the other two.  In Canada, Bell and Telus have extended their 4G RAN sharing agreement to 5G.  In China, China Telecom and China Unicom are rolling out a shared 5G network. 

As the 5G's extensive siting requirements (especially with millimeter band use) and intricate backhaul ones become clear, more sharing will be considered notwithstanding the significant market power (SMP) competition frameworks in place, which assume competition between operators and not cooperation.  These frameworks have come to be seen as "best practices," starting with the UK and EU and extending over time to much of the developed world. 

Now regulators across the world will face new SMP implementation challenges.  The solutions can, of course, be political, as was the case when Angela Merkel indicated she did not oppose the merger (the total sharing solution) of two of Germany's four operators, which went on to be approved by the EU Competition Authority, even as many thought the merger would not be allowed or would be encumbered with many conditions. 

If SMP reviews and strictures are applied to the new sharing arrangements, this will take time and could undermine 5G rollout.  How, after all, is SMP determined when large portions of networks are shared or served by new-age tower companies with more than passive facilities such as OpenRAN antennas and edge computing?  Add an overlay of government subsidies, new applications like IoT, private 5G networks, not to mention the OTTs, and, yes, defining, no less implementing, competition policy becomes complicated.  So, what to do? 

The answer is that it may be time for a new policy framework.  One that recognizes hybrid shared and independent networks as well as situational factors like market size, rural densities, tax policies, and the behavior and capabilities of the competitors.  Imposing pro-competition policies, whether the licensing of new entrants or mandatory MVNOs in markets where the changes are not likely to be viable is an example of SMP gone overboard as are the associated 20+ market segment approaches, especially in small markets. 

Overall, the sooner a new SMP framework is developed the better.