MEPs discard plan for single EU telecoms watchdog 

MEPs in the Industry Committee (ITRE) rejected the proposal by an overwhelming majority (30 votes, two against and two abstentions) during a vote held late at night on Monday (7 July). 

The vote came as a confirmation of doubts expressed earlier by Spanish centre-right MEP Pilar del Castillo Vera, the Parliament's rapporteur on the dossier (EurActiv 25/04/08). It also echoes stances taken by EU telecoms ministers, who have already rejected the proposed measure (EurActiv 12/06/08).

The measures will however still need to be confirmed in a plenary vote to be held in Parliament in September (first reading).

Under the revised text, Brussels will not have full power to block decisions by national regulators, which instead will have to be confirmed jointly by the 27 regulatory authorities meeting in a new group, the Body of European Regulators in Telecoms (BERT).

Viviane Reding, the EU telecoms commissioner who drafted the initial proposal, voiced her scepticism about the plan, saying the new European regulatory body will likely create "lengthy procedures".

"Questions remain especially as regards the financing of the new body as well as its capability to arrive swiftly and efficiently at common positions," Reding said. "Here, a lot of further work is indispensable."

Lukewarm go-ahead for functional separation

However, MEPs endorsed a related proposal that would require telecoms operators to create a separate unit to run their network businesses, a process known as "functional separation", which the Commission hopes will boost competition in national markets.

The move was welcomed by Reding, who said the committee's endorsement of functional separation was "good news as it will enable national regulators to address cases of persistent competition bottlenecks".

However, fnctional separation will only be decided as "an exceptional measure" after confirmation by both the European Commission and the European regulatory body, MEPs said.

Next generation networks

MEPs updated the original proposal from the Commission by voting through measures aimed at encouraging investment in fast internet services using fibre networks. These include "investment sharing" among operators as well as a system of "risk-sharing" between firms making the investment and those wanting access to the new facilities (EurActiv 04/06/08).

More flexibility in allocating radio frequencies

In another aspect of Monday's vote, MEPs approved measures to optimise the use of radio frequencies in order to make room for new services such as mobile TV and broadband internet. However, the ITRE Committee asked for more safeguards to guarantee services of public interest, such as territorial cohesion, emergency services and media pluralism (EurActiv 28/03/08).

The report on radio frequencies, drafted by French Socialist MEP Catherine Trautmann, says EU countries must co-operate with each other and the Commission in the strategic planning, co-ordination and harmonisation of radio spectrum use. To that end, MEPs called on the European Commission to draft a "radio spectrum action programme" to allocate the frequencies now freed up by the switchover from analogue to digital TV.

Consumer rights and transparency

In a separate move, the Parliament's Internal Market Committee voted to enhance transparency on prices by providing information that can be re-used by competitors for consumer information.

Operators will also now be forced to inform customers about the costs of terminating a contract before its normal termination date when it involves handing out free handsets.

EU Information Society Commissioner Viviane Reding, responsbile for telecoms, voiced her disappointment with the committee's vote, saying the new European regulatory body will lack the powers necessary to arrive at quick decisions. "Businesses and consumers in Europe are interested in results, not in lengthy procedures," Reding said in a statement. 

"I have doubts whether BERT and the heavy Article 7 procedure now created will be able to deliver coherent regulatory responses to the regulatory obstacles still far too present in Europe's single telecoms market."

Reding also said she would have liked "more ambition" on radio frequency allocation, saying "a more efficient and consistent management of spectrum" would help achieve "a Europe with 'broadband for all'".

The committee vote was welcomed by ETNO, the European association representing incumbent telecom operators, notably concerning the new indications on NGNs. "ETNO welcomes the recognition by members of the ITRE Committee of the potential of NGNs for long-term sustainable competition between networks wherever possible, with a more targeted regulatory approach to focus on real competition problems, inter alia through a geographical segmentation of markets," said ETNO Director Michael Bartholomew.

ETNO nevertheless expressed concerns about other measures endorsed by MEPs, which it claimed "would make extensive access obligations to fibre networks obligatory" and discourage investments. "Access to networks should be targeted at cases where infrastructure-based competition is not feasible" and should be decided by national regulators "on a case-by-case basis," it said.

ECTA, the association of telecoms new entrants, voiced more concerns over the vote. On NGNs, its chairman Innocenzo Genna commented: "We are pleased to see that access to fibre networks has been reflected in the parliamentary committee's proposals. This is a very positive signal. But the devil is in the detail. Unless the price and the access conditions to the local loop are reasonable, then the change is ineffectual and incumbents will have a return to the monopoly they are looking for. And here we fear that dominant players have gained the upper hand."

ECTA was also very critical of the "watering down" of the functional separation remedy by MEPs. To ECTA, the way it has been approved by the ITRE Committee simply appears to represent non-adoption of the remedy. The 2014 review of the framework for competition is also seen as a concern by small operators.

The European Broadcasting Union, which represents national TV channels, expressed its satisfaction with the outcome of the vote regarding spectrum allocation, saying it "will help ensure the dynamic development of broadcasting". 

"Yesterday's decision confirms that European broadcasters are expected to deliver their services over all platforms, including digital terrestrial, which is key for free-to-air viewing," commented EBU Director General Jean Réveillon.