Brussels, 12/02/2003 (Agence Europe) - The Commission has just put the last touches to the new regulatory framework for the electronic communications sector by adopting a recommendation that will identify 18 markets in the electronic communications sector that national regulators will have to investigate in order to decide whether these markets continue to justify sector specific regulation. The Commission seeks to roll back regulation where it is no longer required and provides greater legal certainty for suppliers of communications networks and services.
Presenting this recommendation to the press European Commissioners Liikanen and Monti in charge of competition and information society repsectively said that the Recommendation was a key building block of a stable and forward-looking technology-neutral regulatory framework (which would be in application by 25 July 2003) and was based on competition law concepts. European Competition Commissioner Mario Monti added, "Sector specific regulation should be the exception, antitrust rules should be the norm . For an operator, being subject to ex ante regulation is a heavy burden because it limits commercial freedom without any evidence of an abuse having occurred."
National regulators will take the markets listed in the Recommendation as the starting point for their own market analyses. Intervention in markets other than those identified in the Recommendation is possible, but only if the Commission agrees that the following three criteria are met: the existence of high barriers to entry into the market concerned, the absence of dynamic competition in spite of these barriers and the fact that competition rules are not sufficient to address the perceived market failures. When assessing these markets, national regulators will for the first time apply concepts that were developed in the Commission's competition practice such as, e.g., the concept of dominant position (Article 82 of the Treaty). This raises the threshold for regulatory intervention. When assessing these markets, national regulators will for the first time apply concepts that were developed in the Commission's competition practice such as, e.g., the concept of dominant position (Article 82 of the Treaty). This raises the threshold for regulatory intervention. As a result, sector-specific obligations will, in principle, only be imposed on undertakings, which are designated by national regulatory authorities as having significant market power (a position equivalent to dominance). This implies that the relevant product markets will need to be analysed according to the principles that the Commission itself applies in its own antitrust practice, in accordance with existing case-law. the Recommendation, as a building block of the new framework. Subsequently, the Recommendation provides a flexible approach for national regulators to adapt regulation to deal with technological and market changes and rolls back regulation where it is no longer required because markets have become competitive.
The Commission considers that the new powers of national regulators should also help harmonise the current divergent national approaches. National regulators will consult each other on their draft measures and discuss their practices in the European Regulators Group. In addition, the new framework requires national regulators to co-operate with national competition authorities. Finally, the Commission has certain powers (in the Framework Directive) to require regulators to amend two types of draft measures: measures designating an operator as having significant market power, and measures that seek to regulate a market not identified in the Commission Recommendation. Consequently, for Erkki Liikanen "the new legal framework will stimulate new investment in communications networks and services, by both new entrants and existing operators" As for Mario Monti, he considers that "Competition rules and sector-specific regulation complement each other. At this stage sector-specific intervention is indispensable, in particular for the development of broadband access via the local loop which is dominated by the historic incumbents. At the same time, the fact that undertakings are regulated does not make the anti-trust, merger or State aid rules redundant with respect to electronic communications".
The new regulatory framework aims at ensuring regulatory harmonisation across the EU and guaranteeing legal certainty and a Single Market in Europe in this sector. Today's recommendation plays an important role in achieving both of these objectives. It seeks to ensure that the same product and services markets will be subject to a market analysis in all Member States and that market players will be aware in advance of the markets to be analysed. The Recommendation for example includes a wholesale broadband ("bitstream") access market, which covers bitstream access and other wholesale access provided over other infrastructures, if and when they offer facilities equivalent to bitstream access.