Brussels, 12/10/2007 (Agence Europe) - Speaking at a European Regulators' Group (ERG) meeting in Athens on Friday 12 October, EU Information Society and Media Commissioner Viviane Reding said she would be recommending, in the upcoming reform plans for e-communications regulations to be unveiled on 13 November 2007, that telecommunications networks are separated functionally. She confirmed that an EU Telecoms Agency would be set up and national regulators' role would be reinforced. She said there was no way use of ex-ante legislation would be abandoned and the industry being subject to only the competition rules. While competition has become effective in some areas of industry, Reding says 'the glass is half full' and believes intervention is necessary in half the 18 markets currently subject to ex-ante regulation. The Commissioner is promising greater speed and effectiveness in the application of remedies. At present, many markets are competitive in Denmark and Sweden but not yet in Greece, Ireland, Poland or Slovakia. Broadband is still a long way off being a competitive market, with only 10.5% of the market currently managed by alternative operators. The situation is particularly bad in Malta, Slovakia, Finland, Greece and Cyprus, explained Commissioner Reding, explaining that she would be suggesting the functional separation of telecoms networks. Functional separation means that incumbent operators would be divided into two parts - one dealing with network activities and one dealing with selling and marketing those activities - but without changing the company's ownership structure. She said it would be an additional tool for introducing competition into domains where other remedies had failed. Based on the British experience, Reding said that if correctly implemented, the tool would encourage investment. 'Functional separation is in my view the right tool for the telecoms sector, which is a network economy which continues to show a number of structural competition problems but at the same time, because of the potential of technological change, is more dynamic than the energy sector,' she explained. The creation of a European Telecoms Agency is another of the suggestions being put forward. Reding will be working closely with the Commission and national regulators, which would be given greater independence under the reforms. 'I believe that truly independent regulators, which are well-equipped and have an expert staff, are the best guarantee for effective and speedy regulation in case of competition problems,' said Reding. Her ideas, which have been greeted with some scepticism by Competition Commissioner Neelie Kroes and Industry Commissioner Gunter Verheugen (see EUROPE 9509) will need approval from the European Parliament and Council of Ministers before they can come into force in 2010. (il)