Next generation network: how to stimulate investment while maintaining a competitive market

During the recent discussion regarding the new European Regulatory Framework a new aspect, which runs parallel to the traditional aim of promoting competition, has emerged: the concern to stimulate investments in Next Generation Networks (NGN). Fixed network development will need substantial investments and, before engaging in such challenging effort, telecommunications companies are waiting for more regulatory certainty. The discussion on which of the two objectives should prevail has been very tough. Therefore, the purpose of the paper is to answer the following question: how to stimulate investments while maintaining a competitive market? Before answering it, it is crucial to point out that inserting broadband in the Universal Service Obligations must be a separate issue from NGN building and it is important to identify the conditions which make necessary to positively incentive network investment in a given country. The paper looks into viable models for direct incentives – where they are required - and into regulatory issues, to be solved in case a direct stimulus is not deemed to be necessary.