Pan-European telecoms regulator proposed

28 Jun 2006

The creation of an independent European telecoms regulator that would work with national regulators in a system similar to the way the European Central Bank co-ordinates national banks has been suggested by Viviane Reding, EU Commissioner for Information Society and Media.

Addressing a meeting of German ICT companies in Brussels yesterday, Reding also acknowledged that the implementation of the EU regulatory framework is paying off.

“Countries with strong competition between incumbents and cable operators tend to have the highest broadband penetration,” said Reding. “Broadband penetration levels in Denmark, Finland, Sweden and the Netherlands are all above 20pc and have already left behind the broadband penetration level in the US.”

Reding said that Europe’s market for electronic communications services amounted to €273bn in 2005, with capital investment increasing €45bn in 2005, up 6pc on the previous year.

However, in a move that should leave no doubts amongst incumbent telecom operators, Reding said that the European Commission was going to continue in its drive for a more level playing field to enable new competitors to enter the various telecoms markets in European countries. This means, she said, a common regulatory approach to telecoms across Europe.

“Variations of regulatory approach are today an obstacle to the internal market and to effective competition. If a national regulator in country A applies the EU rules vigorously to the operators on its market while the national regulator in country B adopts a more lenient policy towards the dominant operator, by adopting remedies later or in a less efficient way, this gives companies in country B an unfair competitive advantage over companies in country A. In Europe’s internal market this is unacceptable.

“I also plan to tighten up the timescales in which regulators must act in order to avoid the long delays that we have seen in some countries,” said Reding.

Reding added that the most effective way to achieve a real level playing field for telecom operators across the EU would be to create an independent European telecom regulator that would work in a similar fashion to the European Central Bank.

Reding also said she does not buy into the idea of “regulatory holidays” called for by incumbent operators in order to enable them to respond to the economic challenges of new developments such as voice over IP. “The EU rules do not permit ‘regulatory holidays’ precisely to prevent the re-monopolisation of markets. Any move in that direction would be a step backwards. It would open the door to higher prices and less choice for consumers,” she said.

Reding added that incumbent operators were often asking her to look at the regulatory model of the US.

“Today, we have in the US a situation of infrastructure competition on the broadband market with two competing infrastructures. While 38pc of subscribers have broadband access via DSL technology offered by telecom companies, 55pc have broadband access via cable. Consumers therefore have a true choice in the US.

“In Europe, DSL is still the technology used by more than 80pc of subscribers which shows that we still have some way to go until the process of market opening is completed,” said Reding.

By John Kennedy