Les ministres européens rejettent la nouvelle autorité des télécoms[en] 

The European Commission proposed a general review of the rules governing European electronic communications on 13 November 2007. 

The application of the proposals would increase the Commission's power over the sector, allowing Brussels to block decisions taken by national regulators (see our Links Dossier).

The proposals notably included the establishment of a new EU Telecoms Authority and the strengthening of the European Group of Regulators (ERG), which brings together national watchdogs. The new body would ultimately be controlled by the Commission and would also assume the tasks of the European Network and Information Security Agency (ENISA), the temporary EU agency dealing with the security of communication networks (see EurActiv 06/03/08).

The plan would also allow national regulators to impose functional separation of network management from service activities on incumbent operators as a means of tackling low competition. This is currently only possible in a few EU countries.

"The ministers already agree that the new body is not acceptable," explained a source from the Slovenian EU Presidency, which will chair the meeting.

The Council will instead propose to simply strengthen the functions of the European Regulators Group (ERG), made up by the authorities from the 27 members. 

The move echoes the line taken by the European Parliament. A report, which has already gathered cross-party support and on which the assembly is due to vote in July, calls for a stronger ERG instead of a new Community body. In Parliament's view, the strengthened inter-governmental ERG should be renamed BERT, the 'Body of European Regulators in Telecoms' (see EurActiv 25/04/08).

The Council is expected to substantially approve this proposal and request the extension of a mandate for ENISA, the temporary European Network and Information Security Agency whose mandate expires in March 2009. 

The Commission wanted ENISA to disappear and be merged with the new authority by 2011. The Council should instead ask for a three-year extension of its functions until 2012.

Parliament's Industry Committee, which has the lead on the issue, last week made the same request as the Council. The plenary is due to confirm this line in a vote next week. "We already have an informal agreement with the Parliament," the Slovenian diplomatic source made clear.

On the other hand, EU ministers should give their backing to Commission proposals on radio spectrum and, above all, accept the remedy of functional separation proposed by the EU executive to increase competition in some markets. This means that once the new legal framework is in place, national regulators will be able to force former state-run telecoms operators, such as Telefonica or France Telecom, to split their network management operations from their service activities, under certain circumstances.

"We drafted a new compromise text which got broad support from the states. The proposal for functional separation is still in," explained the Slovenian Presidency representative.

MEP Pilar del Castillo Vera (EPP, ES), Parliament rapporteur on the new telecoms authority, clearly rejected the Commission's plan: "The new body would have three fundamental problems. It would end up creating a very large bureaucracy; it would pose a threat to the principle of subsidiarity; it would send a contradictory signal against the general desire to move from ex-ante regulation to a fully competitive market."

Martin Selmayr, spokesperson for Information Society Commissioner Viviane Reding, commented on the first blow dealt by the Parliament on the proposed new authority: "The intended upgrade of the ERG to a more efficient, more independent and more transparent Community body (whatever its name) is a very welcome positive development, even though further work will be required to ensure that the legal framework and the financing of the new body will be fully compatible with European Community law."

In a statement published ahead of the Council, ETNO, the association of European telecoms incumbents, urged ministers to "carefully consider functional separation in the light of the key challenges for Europe".

"The inclusion of functional separation as a possible remedy may have a deterrent effect on Next Generation Networks investment and on long term network competition, as it risks encouraging market players to rely on regulated access to existing networks rather than deploying new infrastructure," reads the statement.

The European Competitive Telecoms Association (ECTA), which brings together new market-entrant telecoms operators, welcomes instead the overall Commission proposals. ECTA Chairman Innocenzo Genna said after the publication of the telecoms review: "We believe this to be a strong package overall and one that will result in tangible growth in investment and competition in high-speed broadband across Europe."

"The Commission's decision regarding functional separation is a particularly critical one. Seventeen countries in Europe are lagging in broadband provision because they have little or no unbundling of the incumbent network. Europe could today have been a worldwide broadband leader if regulators had had the opportunity to use functional separation to support open markets," he added.