Est. 4min 14-11-2007 (updated: 28-05-2012 ) reding4.jpg Euractiv is part of the Trust Project >>> Languages: Français | DeutschPrint Email Facebook X LinkedIn WhatsApp Telegram The European Commission has presented its long-awaited proposal for a review of EU telecom rules. While it pleases new market entrants, the review is set to face the resistance of member states, regulators and incumbent telecoms operators. European Regulator The Commission plans to establish a European regulator, based in Brussels, to serve as its main advisor in all European regulatory affairs. The plan to give the authority power to veto decisions taken by national regulatory authorities has drawn the anger of the European Regulators’ Group, whose members are unwilling to give up the right to have the last say in telecoms decisions. In a letter seen by Deutsche Presse-Agentur, the ERG states that regulators neither see the necessity of a new regulator nor an EU veto right on regulatory decisions. Reuters quotes a source close to the ERG as saying: “We once again firmly reject the veto remedies, which we consider unneeded, and also the proposal for a European authority, which would be too far from the national businesses. We reject any kind of bureaucratic entity.” Functional Separation The Commission proposes giving regulatory authorities the power to split telecommunication operators that own important parts of the network infrastructure into two companies, in charge of operational business and network management respectively. The proposal is modelled on the British example of splitting British Telecom into BT and Open Reach. It stops short of ownership unbundling as it is known in the energy sector. Neverthless, it has encountered fierce resistance from many incumbent telecoms operators (See EURACTIV, 7 November 2007, 25 October 2007, 17 October 2007). Reportedly, Viviane Reding also had to overcome substantial internal resistance from fellow commissioners to get the proposal through (see EURACTIV, 26 September 2007) Spectrum management As digital broadcasting is capable of handling spectrum bands much more economically than traditional analogue broadcasting, large proportions of the spectrum hitherto used for television and radio can be re-attributed. Radio and television operators point out interference problems that might occur if the services that they are providing need to operate on frequencies neighbouring public senders, but Reding wants to attribute large junks of the UHF band to new services, such as mobile internet. The Commission also proposes introducing a system for trading radio spectrum. Critics say that this may contradict EU rules on universal service obligations. Markets subject to regulation The Commission has revised its recommendation on the relevant markets. Eleven of the former eighteen regulated markets are no longer subject to ex-ante regulation and are thus made subject to ex-post regulation. In practice, this means that general competition law will apply to those markets. The revised list is a Commission decision which becomes effective immediately. Retail markets 1 Access to the public telephone network at a fixed location for residential customers. Merged 2 Access to the public telephone network at a fixed location for non-residential customers 3 Publicly available local and/or national telephone services provided at a fixed location for residential customers Removed 4 Publicly available international telephone services provided at a fixed location for residential customer Removed 5 Publicly available local and/or national telephone services provided at a fixed location for non-residential customers Removed 6 Publicly available international telephone services provided at a fixed location for non-residential customers Removed 7 The minimum set of leased lines Removed Wholesale markets 8 Call origination on the public telephone network provided at a fixed location. Unchanged 9 Call termination on individual public telephone networks provided at a fixed location Unchanged 10 Transit services in the fixed public telephone network Removed 11 Wholesale unbundled access (including shared access) to metallic loops and subloops for the purpose of providing broadband and voice services Limitation to metallic loops deleted to include fibre 12 Wholesale broadband access. Unchanged 13 Wholesale terminating segments of leased lines. Unchanged 14 Wholesale trunk segments of leased lines Removed 15 Access and call origination on public mobile telephone networks Removed 16 Voice call termination on individual mobile networks Unchanged 17 The wholesale national market for international roaming on public mobile networks Removed 18 Broadcasting transmission services, to deliver broadcast content to end users Removed Read more with Euractiv 'Impressive' energy cartel uncovered in GermanyThe German cartel office has compiled considerable evidence of price fixing and anti-competitive behaviour by Germany's four main electricity and gas suppliers, according to information obtained by the Spiegel. Subscribe now to our newsletter EU Elections Decoded Email Address * Politics Newsletters PositionsThe European Competitive Telecoms Association, which brings together new, market-entrant telecoms operators, was positive about the review. ECTA Chairman Innocenzo Genna said: "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 proposed framework provides the tools, including functional separation and the extension of access markets to include fibre, to ensure the smooth roll-out of Next Generation Networks, and the sharing of the substantial costs required to deliver them." Genna added: "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. And equally Europe could tomorrow fall below its more competitive global rivals if it fails to address firmly bottlenecks preventing competition in high speed broadband services. The future of the European telecoms industry is now in the hands of the Council and the Parliament, and we hope they will take note." ETNO, the federation of incumbent telecoms operators, is positive about the significant reduction in the number of markets subject to ex-ante regulation: "The suppression of most retail markets (except retail access markets) and some wholesale markets, which are already highly competitive, is a positive step. ETNO strongly regrets, however, that at the same time the Commission recommendation proposes the extension of wholesale regulation to any new network, including new high-speed access networks, thereby increasing the scope of regulation. Moreover, continued regulation of the retail access market, which has not been removed from the list of markets, is a missed opportunity to strengthen innovation on consumer markets." ETNO also praised Reding's move to allocate radio spectrum for new services: "The proposals to open up spectrum have the potential to boost the deployment of innovative services and stimulate wireless broadband access technologies, thereby leading to more infrastructure-based competition", said ETNO Director Michael Bartholomew. However, he added: "Mandatory functional separation risks, on the contrary, resulting in increased costs for access and less investment in new and alternative networks, thereby reducing long-term network competition and limiting consumer choice." BEUC, the European consumers' association, saw pros as well as cons in the Commission proposal. BEUC regretted the reduction in the number of significant markets, stating its fear that "consumers will not be adequately protected in countries which do not have strong regulators". In addition, the consumer association criticised the fact that text messaging was not included in the new proposal and that the Commission did not propose a more rigid 'opt -in' regime to fight spam. BEUC Director Jim Murray said: "BEUC welcomes the proposals to bring forward consumer rights in the telecom sector. However, the ultimate goal of this package should be to ensure, for all consumers, safe, affordable and fair access to all telecom services. We call on the member states and the European Parliament to put in place additional measures to fight spam and to guarantee a wider scope of the universal service provision." German EPP-ED MEP Angelika Niebler, Chair of the European Parliament's Industry Committee, warned the Commission to keep any extension of its powers "proportional": "The Commission wants to exert a considerably stronger influence on the interplay with member states and national regulators. In order to institutionalise the co-operation of regulators, the Commission wants to set up a European Regulator for Telecommunications. However, many details still need clarification, especially as far as the Commission's plans to gradually extend its own competences are concerned." Niebler added: "Telecom companies and consumers have made good experiences with the existing legal framework. The old legislative package of 2002 completely fulfilled the expectations. Only few adjustments are therefore needed." UK Conservative MEP Malcolm Harbour said: "European communications rules have been a big success for the internal market and have encouraged high levels of investment and a big range of new services for consumers and business. This package builds on that success and tackles a number of areas where we have demanded action. But the Commission has got carried away with big ideas of building a new power base, instead of leaving local regulators to get on with the job. We shall be demanding answers about the costs and benefits of this new authority. But we must press ahead with those changes that benefit customers and competition." German Green MEP Helga Trüpel, Vice-Chair of Parliament's Culture Committee, said: "The Commission's proposals are too market-oriented and risk undermining the current balance between public and private broadcasters. We are undergoing a fundamental transformation in how we communicate and what media we use. In adapting the EU's telecommunications rules, we must ensure that the current cultural and media diversity is not undermined. It is in this regard crucial to ensure that all citizens have access to affordable broadband. In addition, it is important to ensure that public broadcasters and non-subscriber broadcasters continue to thrive in the new environment." Roberto Viola, Chairman of the European Regulators Group, said: "The ERG will continue to provide advice on the reform of the EU framework to the Commission and other European institutions. In the short term, the ERG urges the Commission to amend the decision that set up the ERG in order formally reflect the ERG's current and potential role in promoting the single market. The ERG is ready to act on the agenda being proposed today by the Commission. There is no need to wait until 2010. The ERG must get on with this essential work right away." BackgroundAs a consequence of technological developments and increasing convergence of access and communication possibilities, a new telecommunications framework was introduced in 2002 and 2003. The core of the regulatory framework consists of five directives, with a number of other directives and a recommendation on relevant markets sometimes also considered part of the package (see EURACTIV LinksDossier on the Telecoms Regulatory Framework). On 13 November 2007, the Commission presented its long-awaited proposal for a statutory review of the package. Timeline The Commission proposals, with the exception of the reviewed Recommendation on Relevant Markets, need to be approved by the European Parliament and by the Council, where they can only be passed by unanimity between the 27 member states. 22 Nov.: Finding the right balance: ETNO's Annual Conference. 28-30 Nov.: 8th ECTA Regulatory Conference 2007. 5 Dec.: 5 December: EURACTIV Stakeholder Workshop on "The Benefit of Telecoms Competition for Consumers and Businesses" . 6-7 Dec.: ERG meeting in Rome. Further ReadingEuropean Union Explanatory note Communication:Reaping the full benefits of the digital dividend in Europe: A common approach to the use of the spectrum released by the digital switchover Report on the outcome of the Review of the EU regulatory framework for electronic communications networks and services Business & Industry ETNO:EC proposals do not address main challenges of today's markets - focus on separation risks undermining investment and long-term competition in Europe(13 November 2007) NGOs and Think-Tanks BEUC:Telecoms: The “pros and cons” of the new Commission proposals(13 November 2007) [FR] Press articles CNN Money:EU Commissioner Reding 'certain' to get majority for network unbundling(13 November 2007) International Herald Tribune:EU commissioner seeks to shake up telecom industry(11 November 2007) Forbes:EU's Reding Wants Telecom Super-Regulator(11 November 2007) Heise:National regulators reject EU regulatory telecommunications authority(12 November 2007) Wirtschaftswoche:Bundesnetzagentur gegen europäischen Regulierer(12 November 2007) Non-assigned links Press release"Commission proposes a single European Telecoms Market for 500 million consumers" [FR] [FR] [DE] Press release"Commission acts to reduce telecoms regulation by 50% to focus on broadband competition" [FR] [FR] [DE] Memo"The EU Telecoms Reform proposes a Single Market for 500 million consumers – Frequently Asked Questions" Memo"EU Telecoms: the Article 7 procedure, the role of the Commission and the impact of the EU Telecoms Reform - Frequently Asked Questions" The need for reform More competition for a stronger Europe The European Telecom Market Authority Empowering European consumers Investment : breathing new life into Europe's telecoms markets Securing Europe's information superhighway The digital dividend : New airwaves for new wireless services Less but better regulation From 18 to 7 regulated markets A more effective regulatory system Statement by Commissioner Reding Networks Consumers Radio spectrum [FR](OJ L 108, volume 45) (24 April 2002) [DE] Directive on a common regulatory framework(2002/21/EC) [FR] [FR] [DE] Directive on on access and interconnection(2002/19/EC) [FR] [FR] [DE] Directive on the authorisation of electronic communications networks and services(2002/20/EC) [FR] [FR] [DE] Directive on universal service and users' rights(2002/20/EC) [FR] [FR] [DE] Directive on Privacy and Electronic Communications(2002/58/EC) [FR] [FR] [DE] Commission:Recommendation on relevant markets(C(2003)497) Directive on competition in the markets for electronic communications services(2002/77/EC) [FR] [FR] [DE] Decision on a regulatory framework for radio spectrum policy(676/2002/EC) [FR] [FR] [DE] Decision on the minimum set of leased lines with harmonised characteristics and associated standards(2003/548/EC) [FR] [FR] [DE] Decision establishing the European Regulators Group for Electronic Communications Networks and Services(2002/627/EC) [FR] [FR] [DE] Press release"The ERG is ready for extended role"(13 November 2007)
