There is a general consensus that infrastructure sharing should be based on cost-oriented pricing and open access models. Countries have differed, however, on the approach taken to establishing costs.
The EU considers infrastructure sharing to be just another example of unbundling. It says access to existing civil engineering infrastructure of a regulated operator on Market 4 (wholesale network infrastructure access) should be priced with the same methodology used for pricing access to the unbundled local copper loop taking into account actual lifetimes of the relevant infrastructure. The same method applies to new (fibre) infrastructure except that a higher risk premium [1] may be allowed in the return to capital (WACC).
The New Zealand regulator accepted the advice of the industry that it was not required to regulate access pricing for mobile co-location [2].
END NOTES
[1] Risk factors identified by the European Commission are (i) uncertainty relating to retail and wholesale demand; (ii) uncertainty relating to the costs of deployment, civil engineering works and managerial execution; (iii) uncertainty relating to technological progress; (iv) uncertainty relating to market dynamics and the evolving competitive situation, such as the degree of infrastructure-based and/or cable competition; and (v) macroeconomic uncertainty. These change over time and are lower for FTTN networks than FTTH networks.
[2] In New Zealand mobile co-location is not a ‘designated service’ but a ‘specified service’ so that the Commerce Commission does not have the power to determine prices. And, in Australia duct access is a ‘declared service’ but the ACCC has never had to arbitrate an access price.