Director of Regulatory Affairs at France Telecom Jacques Champeaux opposed the Commission's plans to introduce a European regulator and give national telecom regulators powers to split incumbent operators into separate companies, in charge of networks and operational business respectively (see EurActiv 17/10/07, 26/09/07 and 28/06/07).
Addressing journalists in Brussels on Tuesday, 6 November, he said the latter measure, which has become known as 'functional separation' or 'structural separation', "is a real risk for next-generation networks". He went on to explain his view that the measure would create a dedicated company operating the network business, which would amount to a new monopoly.
He said that this would curb "a unique opportunity to move from service and infrastructure competition to network competition", where two or more networks, such as fibre-optic, cable and wireless compete with each other for end users.
Champeaux' arguments are backed by a report prepared for the incumbent association ETNO by the consultancy LECG, which warns against the supposedly "long-term negative impact of mandatory functional separation on access network investment and competition".
On the same day, ECTA, the association bringing together new market entrants on the telecoms market, published a report stressing the positive impact of regulation on investment. Richard Cadman, Director of SPC Network, the consultancy which drafted the report, said: "What this study shows, more emphatically than any study before, is that there is a direct and positive correlation between investment levels and the effective implementation of pro-competition regulation."
Cadman went on to explain: "That is because one of the risk factors of investing in competitive telecoms services is the regulatory environment – effective regulation minimises the risk and thereby encourages investment."
The Commission will present its proposal for an overhaul of EU telecoms rules on Tuesday, 13 November.
