Progress in reform of EU telecoms regulations
Last week, in a series of votes, the European Parliament adopted an amended legislative proposal called the Telecom Package. Originally prepared by Viviane Reding, head of the European Commission for Information Society, the initial text consisted of a set of propositions designed to revise the existing Regulatory Framework for Telecommunications (originally enacted in 2002).
The initial propositions tailored by the Commission have been actively debated and a final report was steered through the European Parliament by Malcom Harbour, an English deputy. Known since November 2007, the text of the Commission has been beefed up by almost 800 amendments, many of them passed after discussions and negotiations between the Commission and the members of the European Parliament throughout the summer.
A press release said: “All the major political groups in the Parliament agreed to a compromise before the plenary vote which does not alter the main goal of the draft legislation – to improve the position of telecom users – but they greatly clarify its aims, notably as regards protection of privacy and fundamental rights.”
The next step according to Luc Chatel, Minister and spokesman for the French Government is “to reach a political agreement among the 27 Member States on this project during the Council of Ministers in Charge of Telecommunications on 27 November 2008. Then, we will have a second-reading of the text by the European Parliament in March 2009 and a definitive adoption under the Czech presidency.”
From regulation to co-regulation
One controversial measure proposed by Viviane Reding was the creation of a European Electronic Communications Market Authority (EECMA), a pan-European regulator under her administrative control.
Earlier this year, many European regulators disagreed with this proposition arguing it was creating a new bureaucratic level disconnected from the field. The European Regulators Group (ERG), where each of the 27 National Regulatory Authorities (NRA) have a representative, has doing a great job in collecting and coordinating information and sharing knowledge of each others’ works, problems and the most efficient ways to solve them. ERG had produced a set of reports and analysis at the request of the Commission. The Commission agreed to adopt the conclusions of a report made by Pilar Del Castillo, a Spanish MEP, to create the Body of European Regulators on Telecom (BERT). It is an independent expert advisory body which will be funded by both the Commission and each of the NRA. The ERG will be dissolved and replaced by BERT which has a more stable structure; moreover, under BERT’s rules, 2/3 majority is required to pass resolutions. By contrast, the ERG had no budget and its rules require unanimous decision by the 27 members.
BERT’s goal is to promote fair competition and high-quality services across the EU by ensuring that national regulators use similar tools when faced with similar market situations. A report made by Catherine Trautmann, French MEP, mentions a new “co-regulation” system: “national authorities have to consult the Commission and BERT before taking regulatory decisions. If BERT considers the measure inappropriate or ineffective, the Commission may require the national regulatory authority to amend it.”
Promote investments in Next Generation Access networks
Taking over the Commission propositions, the European Parliament added several measures to promote and facilitate investments in new fiber networks. To prevent the former state-owned carriers from rebuilding their monopolies and to lower the total cost of building networks, the European Parliament added several measures to require operators (either cable or telcos) to disclose information about their existing fiber ducts and facilities and to share them with other operators. Smaller operators with little or no networks will have rights to access existing fiber networks and put their fiber in existing ducts. Duct access has a big role to play in the development of next generation competitive access. But widely differing national contexts, ownership structures and legal and environmental restrictions make it very difficult to apply one regime. The Commission has asked a few regulators such as France’s ARCEP and UK’s OFCOM to report on their early experiences in FTTH deployments.
Functional separation as a remedy
The new Telecom Package has reduced the number of markets susceptible to ex ante regulation from 18 to 7. NRAs may still impose ex ante regulation on these markets where, on the basis of a thorough review of national market conditions, they consider that the national market is not yet effectively competitive. In their vote, MEPs clarify that a national regulator may impose functional separation on telecom operators, i.e. require them to create a separate business unit for network services which operates independently from the content services the operator offers, only as “an exceptional measure” to ensure that all service providers can have access to network services on equal terms. Functional separation has been applied to BT group in 2005, which was separated in two independent companies, Open Reach and BT. But MEPs have stressed in their vote that such a remedy would be applied only if other measures have failed to advance competition and only if BERT and the Commission agree there is no other way to achieve infrastructure-based competition.
Make wireless services interoperable throughout the EU
The directive, as revised by the European Parliament requires all Member States to co-operate with each other and the Commission in the strategic planning, co-ordination and harmonisation of radio spectrum use.
In a report, drafted by Italian Deputy Patrizia Toia on the use of the “digital dividend”, MEPs called on the Commission to propose measures to Parliament and Council for better coordinating the use of the digital dividend at EU level. Member States, together with the Commission, should identify common spectrum sub-bands of the digital dividend for different application clusters that could be harmonised on a technology-neutral basis. Parliament supports the idea of dividing the Ultra High Frequency (UHF) spectrum into clusters for uni-directional services such as fixed or mobile broadcasting and other mobile multimedia services and for bi-directional services such as wireless broadband.
Commercial information and P2P sites
The Parliament went further than the Commission on consumer rights to information on prices, tariffs and contract conditions. The final resolution says that contracts must give full, clear and up-to-date details of access to emergency services, restrictions on content or equipment use (e.g. blocking of VOIP services on mobiles supposed to provide internet access), client and after-sales services, payment methods and charges for number portability or for terminating a contract. Catherine Trautmann, in a press conference after the vote mentioned that “the idea of transforming the ISP into a kind of police to filter all downloads and to punish piracy has been definitely discarded under an intense industry lobbying. The law is favorable to free downloads and peer-to-peer sites.”
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