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At a meeting with top officials of the Italian regulatory authority for telecommunications, Information Society Commissioner Viviane Reding was determined to introduce functional separation as a "last-resort remedy" in telecoms liberalisation.
Reding's meeting with Corrado Calabrň, President of the Italian regulatory authority AGCOM
, and the regulator's Secretary General, Roberto Viola, is the third in a series of talks with national regulatory authorities, prior to the review of the telecoms regulatory framework due on 13 November. However, it received more media attention than the other meetings for a number of reasons:
would have to be split into two separate entities, each managing the operational business and the country's network infrastructure respectively. As a part of the review of the telecoms regulatory framework, Commissioner Reding would like to give regulators all over Europe the opportunity to apply such a remedy.
), the Commission's top adivsory body on regulatory issues in telecommunications. Under Viola's presidency, ERG has dramatically improved its relationship with the Commision, which had formerly been marked by tensions. The Group provided substantial input during the drafting phase of the telecoms review. As part of the review, the Commission plans to enhance its role and transform it into a European Regulatory Authority (see EurActiv 04/09/07)
LinksDossier: 2nd telecoms package [Archived]
Functional Separation: Reding reaffirmed her conviction that "national telecoms regulators should be given this tool that can promote both competition and investment". She stressed, however, that the disputed splitting-up of telecoms incumbents should be applied only as a "last-resort remedy to address the stubborn cases where other remedies have failed".
She added: "It is the responsibility of legislators both at European and at national level to ensure that, in the interest of legal certainty, there is a sound legal basis for applying functional separation. To enable regulators to do their job properly, legislators will need in particular to define clearly the required elements of this remedy and the conditions under which it may be used by an independent telecoms regulator."
ERG President Calabrň said: "We are convinced that functional separation, given the peculiarities of the Italian market, could be a win-win solution as has been the case in the UK market," where the incumbent, BT
, was forced to create a separate company, Openreach
, to operate the network business. Calabrň went on to say: "We have started an intense discussion with Telecom Italia and initiated a public consultation on the subject. We are ready to go further on this route and I am confident that the Italian Parliament will soon approve legislation giving AGCOM powers to apply functional separation."
Thierry Dieu, a spokesman for ETNO, the industry federation bringing togehter incumbent teleoms operators, told EurActiv: "Functional separation is a tool that is very different in nature from existing remedies in that it allows regulatory authorities to intervene on the structure of the company itself. Other remedies can be more easily implemented but also more easily rolled back. Functional separation was not included in the initital proposal from the Commission, and it has been insufficiently discussed. It is also not in line with the reality of the market, where competition is thriving."
17 Oct.: One-day interactive forum on functional separation
in Brussels.
13 Nov.: Commission to publish proposals for review of the telecoms regulatory package.
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