EU losing power struggle with national telecoms bodies

Neelie Kroes May 2011_Picnik.jpg

The European Commission will this week issue a rebuttal against the Italian telecoms regulator for its proposed reduction of broadband fees. The move comes after several similar actions aimed at asserting EU powers against national authorities, but it risks proving ineffective.

Telecoms rules give the Commission the power to admonish national regulators when they adopt decisions which may affect the functioning of the common European market, for instance in the field of pricing access to the fixed or to the mobile network.

The Commission exercises its power together with the council of EU national telecom regulators BEREC – the Body of European Regulators for Electronic Communications.

In case of a disagreement with a national authority, the Commission can issue a number of warnings, which are much more effective when BEREC supports them. On the other hand, when national regulators do not abide by the Commission's warnings, EU rules do not give the EU executive a clear power to impose sanctions.

Broken alliance?

Given the Commission's limited powers, over the years Digital Agenda Commissioner Neelie Kroes has tried to safeguard the consistency of national rules acting mostly in accord with BEREC.

But recently this crucial alliance seems to be close to breaking point.

Over the last few months, Kroes has lost the support of BEREC in nearly all power struggles with national authorities. Since September, she took on the regulators in Austria, Italy, Finland and Germany. BEREC supported Kroes' position solely in the Finnish case. In all other cases, the Commission's warnings were considered "not justified".

The gap between BEREC and Kroes widened further when BEREC issued in October a heavily negative opinion on the most important reform proposed by Kroes for the telecoms sector since she has taken office.

With the regulation called Connected Continent, proposed in September, the Commission launched a new overhaul of the sector after its last reform in 2009. Kroes proposed to increase EU powers on a number of sectors, ranging from spectrum management to net neutrality.

>> Read: 'Connected continent' plan seeks harmonised EU telecoms market

But BEREC was not supportive and expressed "significant concerns about the evidence base and analysis behind the proposal," according to its opinion on the proposed regulation.

"BEREC is also concerned that the proposals represent a significant shift in policy orientation, without proper consideration of its far-reaching consequences," adds the document which also raised doubts on "the feasibility and proportionality of some of the proposed measures".

The Italian crusade

However, worsened relations with BEREC have not prevented Kroes from continuing her fights against national regulators. The Italian case, which will reach a new stage later this week, confirms this attitude.

In July, the Italian authority, AGCOM, proposed to lower certain fees that new operators have to pay to the historic operator Telecom Italia for accessing the fixed telecom network.

In August, the Commission opposed this decision, raising doubts on the methodology and the timing of the measures. In September, however, BEREC said that the Italian regulator "presented sufficient evidence" to justify its proposed action.

Nevertheless, the Commission has decided to proceed against AGCOM, and later this week will recommend the Italian authority "to amend or withdraw the draft measure", according to the draft recommendation seen by EURACTIV.

Vague powers

But true ability of the Commission to impose its decision remains a matter for debate. Kroes may push to open an infringement procedure against the state of a rebellious regulator.

But the legal basis for doing so is vague and risks preventing the Commission from reaching the final stage of the procedure, which is a referral to the European Court of Justice. For these matters, the Court is the only institution which can impose financial sanctions if its rulings are not applied.

In other words, Kroes may be stepping up the political pressure to conceal the fact that the Commission's real powers are limited. 

A single regulator for all Europe would probably be the best solution to guarantee the smooth functioning of the EU telecoms market, but this option was opposed by member states at the time of the review of telecoms rules in 2009.

The Electronic Communications Framework Directive (2002/21/EC) is the legal reference for the EU telecoms sector. The directive was updated in 2009, increasing the powers of the European Commission, but not as much as proposed by the then commissioner for telecommunications, Viviane Reding.

Article 7 of the directive is one of the main EU instruments to regulate the telecoms sector. It sets up a consultation and notification mechanism that requires national telecoms regulators to inform the Commission and telecoms regulators in other EU countries, about measures they plan to introduce to solve market problems.

The Commission can oppose proposed measures with a number of instruments, but its power rests mostly on political pressure and peer suasion, exercised through the council of national regulators (BEREC).

  • 12 Dec. 2013: deadline for the Commission to issue a recommendation on AGCOM proposed measures.

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