Accounting separation and beyond

The expected addition of operational or functional separation to the remedies available to European regulators in the forthcoming revisions of the Electronic Communications Directives has raised the profile of all separation-based remedies, including Accounting Separation.

Accounting Separation is a less intrusive and much less costly remedy to implement and it can provide a defence against the imposition of more intrusive separation obligations. Regulators increasingly see Separation (Accounting, Functional and potentially Structural) as a common suite of measures designed to tackle perceived incentives of operators to discriminate against other access seekers in favour of their own downstream businesses.

These remedies are designed to:

• impose and police non-discrimination obligations in the provision of access to the dominant operator’s network
• increase transparency of the business performance reporting for the operators
• identify cross subsidies within the dominant operator’s businesses
• demonstrate price non-discrimination
• identify predation strategies applied by the dominant operator particularly through price and quality squeezes

PwC can provide insight and expertise to assist you in relation to Separation and in particular to help minimise the risks of regulators imposing disproportionate operational separation obligations.