Brussels, 03/06/2005 (Agence Europe) - The EPP-ED Group of the European Parliament organised a public hearing on 30 May to take stock of the state of progress in implementation of the legislative framework for electronic communication. Adopted on 7 March 2002, the framework includes several directives that Member States were to transpose into national legislation on 25 July 2003 (Belgium and Greece have still not transposed the legislation and are currently the subject of infringement procedure). The aim was to modernise and simplify existing rules, in order to encourage competition and improve the transparency of regulations. These new rules are accompanied by a recommendation adopted on 12 February 2003, which lists 18 markets likely to be subject to an ex-ante regulation on the part of the national regulatory authorities (NRA). These authorities are to carry out an analysis of each of the markets and to report back to the Commission, as well as impose at least one regulatory obligation on operations recognised as holding “significant market power”. Revision of the framework will take place during the year 2006, before July.
Given the aims of growth and employment that it has set itself, the European Union must define the priority areas that engender growth and in which it must invest, and the telecommunications sector is recognised as a strategically important segment of the European economy, Lorenzo Cesa, Vice-President of the EPP-ED Group, notes in his introduction. Investment in this sector is a stimulant for development, he added, asking: Is the legislative framework for electronic communications appropriate for the aims of the EU, and do national rules correspond to the principles of growth and investment stimulation? Lorenzo Cesa also spoke of the advantages of information and communications technologies for consumers: broad band access to the Internet must become more widespread in Europe, as it is in the United States, but also in the emergent sectors like India and Korea, but this requires investment, he stressed.
Commissioner Viviane Reding, responsible for the information society and the media, explained developments that she has in mind for the electronic communications sector. She pointed out that she had received notification from the NRA of 15 Member States which have to date carried out an assessment of the 18 markets likely to be regulated. “There is very close cooperation between Member States and the Commission”, she was pleased to state, while deploring the time lost by certain national authorities that have not yet launched the process. The new framework must be clear and sound, given the rapid mutations that the sector has experienced, Viviane Reding admitted, adding that, although some sectors are to be regulated, they must also be guaranteed a certain amount of flexibility so that their development is not hampered. A joint and coherent approach is needed despite the specific situation of the 25 Member States, she asserted.
On the subject of the “roadmap” for revision of the regulatory framework, the Commission is to assess the validity of the objectives set out in the regulatory framework for the period after 2010 and will present a proposal end 2006. It will also begin revision of the February 2003 recommendation on relevant markets. Updating will begin in December 2005 with a call for proposals to operators in addition to a public consultation on market review in 2006, Commissioner Reding confided, saying revision must be based on “collaboration between the various parties”. In her view, it is still premature to specify the content of revision, “which will not comprise indepth changes but will cover elements allowing the single market to be completed”. Revision is an essential element of the i2010 initiative, that must ensure that businesses and companies concerned are competitive, the Commission concluded (after presenting the new i2010 action plan on Wednesday - see EUROPE 8959).
Participants at the hearing then assessed the comparative advantages of competition and legislation in the light of technological changes and the role of innovation and research for the telecommunications industry. According to the director general for the information society and the media at the Commission, Fabio Colasanti, the new framework has allowed certain markets to be more competitive, but for several others nothing has changed. Mr Colasanti therefore calls on Member States to step up their efforts to speed up the process. OFCOM consultant Kip Meek believes the current framework is economically sound and coherent but “it is a long process that requires considerable resources on the part of the NRA and industry. There is still a great deal of work to be done at the level of harmonisation”. Daniel Pataki, the president of the NRA for Hungary, presented a representative point of view of the state of mind of the new Member States. In his view, the digital divide between the EU15 and the countries of Eastern Europe is a reality despite the efforts being made to adjust (on average 56% of Hungarian citizens, for example, do not have a PC, with a lower percentage in rural areas).
In the upcoming review, Mr Pataki recommends that priorities should focus on broad band and mobile telephony and that some of the 18 markets identified should be grouped together.
The hearing also allowed operators to express their views. Traditional Italian and German operators were represented by Marco Tronchetti Provera (Telecom Italia) and Kail-Uwe Ricke (Deutsche Telekom). The Italian businessman believes the main objective should be consumers' interest to allow them to enjoy more competitive tariffs. In his view, only a flexible regulatory environment can stimulate investment. “It is necessary to be as unobtrusive as possible, and not fragment the market with differences which, in this era of convergence and integration, have less and less reason for being there”, he said. Kai-Uwe Ricke spoke along the same lines, saying the regulatory framework recommends that there should be rules in sectors where competition is not effective, as “current practice in Europe is not along the same lines: we are moving toward more rules, including on innovative markets”. He stressed that it is absolutely essential to deregulate in order to develop innovation and investment. The alternative operators expressed the contrary argument explaining that the existence of rules guarantees competition as “if there is no regulation, there is the risk of reducing to nothing any efforts to improve competition and bring prices down”, Jan Tjernell (Tele2) said in essence. Roger Wilson, representing the ECTA (European Competitive Telecommunications Association), supports the alternative telecommunications industry. He believes competition fosters innovation, and investors invest on the best regulated markets (he quoted the British market as an example of this, as it receives more investment compared to the Belgian and German markets which, being less regulated, do not attract investors). Review of the regulatory framework should also take into account sometimes contradictory opinions expressed by operators. “It is difficult!”, British Conservative MEP Malcolm Harbour summed up.