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Foreword - Brussels clout?
Proposed EU telecoms regulation has already divided opinion on its potential impact, says Lynd Morley
As Europeans, do we want more or less centralised control and regulation? It is a seemingly endless debate, with passionate positions and justifications taken on both sides of the argument. And telecoms is by no means an exception to the ongoing and far-reaching grasp of Brussels.
During the summer, the Commission launched its public consultation on policy options for updating the EU's telecom rules of 2002, the “regulatory framework for electronic communications”. Electronic communications – by the EU's definition – include fixed voice telephony, mobile communications and broadband – a market worth more than E270 billion in the EU in 2005.
Viviane Reding, the EU Commissioner responsible for Information Society and Media, set out a number of recommendations for the telecoms industry, including a clear demand for greater consistency in the regulatory approach to telecoms across the various member countries. Mutterings about more centralised control and “Brussels' overreaching bureaucracy” could be heard as soon as the text of her recommendations hit the wires.
Her argument, of course, is not one of control freakery, but of establishing a fair and effective internal market.
“I want to make a decisive step towards the completion of the internal market,” she explained. “In the telecom sector, where neither technology nor economic interest nor consumer behaviour know national borders any more, I see a clear, long overdue need to make the internal market a reality also in regulatory terms.”
She went on to stress that greater consistency and effectiveness in the application of remedies is needed to avoid distortions of competition in the internal market. “We need this consistency” she stressed, “not for the Commission but for the market and consumer, and I hear this all the time from telecom companies that are trying to break into markets beyond their home country.”
Reding insisted that variations of regulatory approach are currently an obstacle to the internal market and to effective competition. “I believe that the Commission should be able to ensure consistency in remedies proposed by national regulators to enhance competition in markets dominated by one or more operators. This is a logical adjunct to our current role as regards market definitions and market power assessments.”
And just to give her message to the regulators an extra little push, she added: “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.”
Reding believes 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 together with national regulators in a system similar to that of the European Central Banks.
Not everyone will be thrilled with this suggestion, according to such commentators as Ernst & Young's Richard Ireland, who notes that the move “will doubtless upset national regulators, some of whom have already questioned EU proposals such as a cap on retail mobile roaming prices.”
Ireland explains that the EU argues that new regulation will increase investment, but that incumbents beg to differ. “Deutsche Telekom's recent refusal to open its prospective fibre optic network is a case in point,” he comments, “one that highlights the potential problems in countries where governments retain stakes in former monopolies. In fact, the EU proposal to introduce the new Europe-wide telecoms regulator is designed to prevent such disputes at a national level.”
Certainly, Reding shows some considerable determination to bring regulators – and some national governments – into line. Expanding her thinking on the creation of an independent European regulator, she explained: “In such a system, national regulators would continue to act as direct contact points with operators and could directly analyse the market. At the same time, a light European agency, independent from the Commission and from national governments, could ensure by guidelines and, if necessary, instructions that EU rules are applied consistently in all Member States.”
Whether Reding's proposals do indeed result in a level playing field, or simply more control from Brussels, remains to be seen.
Lynd Morley is editor of European Communications
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