Telecom sector gears up for ‘Battle of Reding’ at Council meeting

Information Society Commissioner Viviane Reding will be grilled by EU telecoms ministers when they come together for a first discussion of the Commissioner’s far-reaching proposals for an overhaul of EU electronic communications markets on Thursday.

When ministers in charge of telecommunications meet in Brussels on 29 November, the better part of the morning will be dedicated to discussion of Reding’s proposal for a review of the EU Regulatory Framework on electronic communications. While many elements of the two proposed directives, the draft regulation, the recommendation and the communication which make up the package are relatively uncontroversial, a number of key proposals are set to spark debate. 

In particular, ministers are expected to question the Commission’s move to set up a European regulatory authority for the telecoms sector, which will have the right to veto decisions taken by national telecoms regulators (NRAs). In proposing the new agency, Reding had declared her wish to diminish the influence of industry and governments over decisions taken by NRAs: “A patchwork of parochial interests is what we have today. There are some areas where economies of scale can be reaped.”

In some member states, telecoms companies have already grouped up with regulators and governments to oppose Reding’s plan. Bernd Pfaffenbach, secretary of state for telecommunications in Germany, said that the plan “goes against the principles of subsidiarity and deregulation,” adding that a European regulatory body would be “an irreversable process, we would not be able to abolish it”. Pfaffenbach also said that Britain, France and Spain shared the German position and that to date, no country had openly voiced support for the proposed agency.

The Commission’s proposal to give regulators powers to split up telecoms companies – known as functional separation – is more likely to find agreement with member states. The remedy is highly controversial, with incumbent operators still owning most of the EU’s telecoms infrastructure and investing most into it, and new market entrants seeking to weaken the position of their more traditional competitors. 

Incumbents argue that the new remedy will raise the pressure on regulators to actually apply it and may eventually reshape the telecoms industry all over Europe, with negative consequences on investment in Next-Generation Networks (NGN). Member states, on the other hand, tend to see functional separation as a welcome extension of the powers held by regulators. The UK has already applied the remedy in the case of BT, which had to split off its network operations into a different company, Open Reach. Italy and Poland are close to applying it to their respective incumbent operators. 

Reding says that she is prepared to face opposition from member states: “I am prepared for any fight which in the end will be good for European citizens in particular and for the European market in general. Because I don’t care who’s in the way.”

The Council’s deliberation on the telecoms pacakge can be followed live on the Council’s website. 

On 5 December,  EURACTIV will hold a Stakeholder Workshop on “The Benefit of Telecoms Competition for Consumers and Businesses” . 

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