Why ERCC
O U R E X P E R I E N C E
Professionals at ERCC specialize in economic analysis involving competition, regulation, public policy, and business strategy for various stakeholders in the telecommunications industry.
ERCC has provided advice and testimony regarding regulatory policy – including pricing and policy recommendations for regulating/deregulating the industry; insights into costing principles, cost and other financial models, licensing, scarce resources management (spectrum and numbering), demand estimates and forecasts, privatization policies, national broadband planning, among many other major regulatory issues.
ERCC’s telecommunications team has been involved in numerous proceedings in jurisdictions in the U.S. and around the world – over 15 states and the federal government of the United States, the United Kingdom, Germany, Italy, Thailand, Bahrain, South Korea, Hong Kong, Singapore, China, Uganda, Tanzania, and Mexico.
We often work with the regulatory staff members and/or operators. We present our results in a number of ways to serve the client’s needs: including analytical reports, draft policies and procedures, financial models, staff training, written testimonies and affidavits, and formal presentations and testimony to regulators, antitrust officials, and legislative bodies.
Our products are supported by sound economic analysis and market data. We provide usable tools to the regulators and operators for implementation. We regularly provide to our clients tangible products such as draft policy recommendations, procedural terms, market evaluation, cost models, draft guidelines and notifications, master plans, information memorandums, cost studies, policy strategies, financial due diligence, and benchmarking and consumer surveys.
K E Y A T T R I B U T E S
We are industry experts:
ERCC’s expert staff has practical knowledge of industries. Our telecommunications team includes economists with detailed industry knowledge gathered from working for regulatory agencies, financial institutions, service providers, and at academic and research institutions.
We have comprehensive experience of regulation:
ERCC’s expert staff has studied and been involved in many different regulations and country experiences. Thus, our experience encompasses the whole spectrum of market structures and forms of regulatory control. We have undertaken projects for a wide variety of government agencies and companies across a wide spectrum of regulatory issues.
We are economists and regulatory experts:
Economics is essential to the assessment of the impact on businesses of different regulatory regimes, competitive environments, government policies, and company strategies. Regulators increasingly rely on economic analysis to assess policy options and methods of regulation. Our economic analyses include the latest research and our industry expertise, to evaluate issues, provide insights, and formulate practical and often innovative solutions to a wide range of problems.
We understand Regulation and Public Policy:
ERCC offers insights, skills and techniques that are invaluable in the context of regulatory issues and public policy. Our staff has extensive experience with regulators and operators both in the United States and around the world. We offer our clients practical advice on immediate regulatory issues, and often combine such advice with implementation through working with and training (when necessary) our clients.
S A M P L E T O P I C S I N R E G U L A T O R Y C O N S U L T I N G :
ERCC provides economic and financial expertise to help regulators understand and implement regulations necessary for a competitive market. For example, ERCC expertise covers regulatory and industry topics such as:
Regulatory Issues and Public Policy
Most telecommunications markets are regulated. Regulators therefore need to understand the key regulatory issues and the implications, to devise an appropriate regulatory strategy, to promote market development and protect consumers. ERCC recognizes that economic theory and rigorous economic analysis of public policy issues related to regulation are critical to our clients’ ability to understand the regulatory environment and to respond appropriately to changes in regulation.
We offer insights, skills and techniques that are invaluable in the context of regulatory issues and strategy. For example, we often offer our clients practical advice on immediate pricing issues, and we combine such advice with analysis that provides our clients an understanding of the key microeconomic principles governing these issues.
Basic Economic Research Analysis
Markets open to competition bring new opportunities to both consumers and producers. The growing trend towards convergence within the telecommunications and the general communications industry heightens the appeal of a single provider of all services and of packages of new services. ERCC can design and implementing quantitative survey research to determine how consumers choose among different service/price/carrier configurations. We also use quantitative techniques to understand the market phenomena such as first- and repeat- purchase behavior as well as “churn”, data relevant for regulators’ policy making.
Cost Models
The economic issues of cost are important to incumbents, regulators and entrants. Incumbents are interested in assuring that the prices they charge retail and wholesale customers adequately recover the economic costs incurred to provide service, otherwise economic efficiency is lowered. Regulators are interested in the cost to provide wholesale services (e.g., interconnection and access) because they have been charged with the responsibility to manage an orderly transition to open markets and competitive entry. ERCC staff is well positioned to understand the economic issues of cost and to help clients understand the cost concepts appropriate to address the variety of questions that arise in today’s environment. We have studied and critically evaluated the cost models (e.g., LRIC) often discussed in regulatory venues and have assisted our clients in developing their own cost models to address a wide range of cost questions pertinent to the telecommunications industry today.
Accounting and Other Separations
As the regulators review the current regulation on accounting separation (“AS”) and consider other forms of separation, we are experienced in formulating the desirable regulatory approach and a roadmap for implementing the necessary separation regulation applicable to the industry conditions. Separations are often designed to prevent discriminatory behavior by network operators providing access to competitors or entrants—among other regulatory uses. For example, AS also can detect cross subsidies across services in the same company, resulting in the inefficient pricing of services. Former national telecommunications and SMP operators have traditionally been subject to separation regulation in most countries. In addition to accounting separation, regulators often retain the option of a functional or structural separation as a sanction/remedy for an event of noncompliance of accounting separation.
Demand modeling, pricing and packaging
Building on demand analysis regularly conducted by major fixed-line and wireless operators, we conduct studies on consumer choice among calling plans and service options, factors of customer choice, and the impact of changes in price on the demand for these services.
National Broadband Planning
Many countries are at a critical juncture with respect to their broadband policy. Economic and social development increasingly depends on advanced ICT infrastructure – of which an NBN is an integral part. In the past decade, governments around the world have made efforts to improve their national telecommunications networks to make fast broadband service available and affordable for all segments of the economy. In many countries, there is not yet a concrete and detailed strategy in place for the widespread deployment of next generation broadband networks.