The regulation that will bring order to the Tlc and digital markets

Two markets, telecommunications and digital services, subject to differently burdensome rules, aimed at ensuring the competitiveness of markets that are structurally allergic to competition. That of TLC, with the exception of the recent Italian set-up, has a vertically integrated operator, owner of the network and provider of the fixed telephony service to end customers. That of digital services has a virtual infrastructure, e.g. Amazon's platform, indispensable for selling other people's products to the end customer. We can write the following equation: the fixed network: TLC=the platforms: to the gatekeepers of digital content. The presence of an essential infrastructure, network or platform, justifies a body of rules, which imposes virtuous behaviour on the respective operators. Where virtue means prohibiting the dominant one from behaving like a monopolist, excluding other competitors or harming end customers. Let us look at the TLC market with a magnifying glass. Here, the rules oblige the network owner to make it available to the network-less entrepreneur on an equal basis. Mandatory access to the fixed network creates a legal fiction: it is a piece of theatre because it mimics a competitive market, knowing that it will never be so, given the uniqueness and irreplicability of the network. Even in the digital marketplaces, GK platforms are a compulsory step to transmit digital content to us who buy it with our data.

Yet this economic correspondence between infrastructures is not matched by equal rules: the Telco's are more onerous, the GK's less so. This unequal treatment is accentuated in the case where the two operators provide a substantially equal service to us customers, using different means. One thinks of those who phone by mobile network and those who phone by what's up, which transmits over the Internet. At the end of the day, it is still just a phone call, only the technical means by which it is made changes; yet a Telco will be bound to greater duties than those imposed on Meta, the owner of what's up. Here, technological convergence, the banner of the European Commission, is one of those myths confined in the hyperuranium, with casual violation of the principle of horizontal equality. We have before us two categories of entrepreneurs, recipients of unreasonably different treatment, even though they perform similar activities. The main difference between the two regulations concerns whether or not access is compulsory. Whereas a Telco is obliged to open its doors to the requesting operator; Amazon can refuse to display someone else's book on its shelves. This initial diversity of conduct is completed by a final distance: in extreme cases, the electronic communications code can provide for the imperial removal of the network from the dominant player in order to break vertical integration; this remedy is not provided for by the cousins of the Digital Market Act. But the two categories are again equal in the ineffectiveness of the sanctioning remedies, which do not go so far as to order the deconstruction of the integrated company, even to the extent of the sharing of GK data. The weakness of the sanctioning apparatus allows operators to continue to behave as they could not, as paying the penalty costs less than the benefits gained from the violated rule. This punishment deficit measures the inability of asymmetric regulation to steer markets towards mature competitive assets; and on a different level, the regulatory burden is a straitjacket for our operators, condemned to perennial dwarfism against American or Chinese gigantism. Now the Digital Networks Act, expected in these days, will want to re-establish the balance that has been broken between Telco and GK, bring the two regulations closer together, involve the GKs in the maintenance obligations of the fixed network, create a single TLC market, on a par with the GKs' digital market, and finally give back to the Commission the power to decide on remedies, initially delegated to the national regulatory authorities. This European centripetal motion would paralyse the useless chase among states to see who can impose more rules than the other. The result would restore vitality to the lex mercatoria on the TLC market, relieving it of its regulatory burden, and at the same time equalise the two operators as equality dictates, a value that is shouted but little practised. We can believe that the resurgence of globalism can act as a goad, not a gentle one at all, on the European political power, urging it to reappropriate what it had delegated with unsustainable lightness to technical subjects. We await the European act: the first step in a European concentric motion aimed at reasserting its sovereignty to the detriment of the rule of tech.