Brussels, 08/11/2007 (Agence Europe) - On Tuesday 13 November, the Commission will be preparing to adopt reforms put forward by Viviane Reding on the regulatory framework for electronic communications, with no major changes from plans recently unveiled by the commissioner, much to the chagrin of the historical operators. This reform aims to give the national regulation authorities (NRA) the power to impose the separation of network and service activities, if competition is seriously compromised. This initiative has been decried by the historical operators, but welcomed by newcomers to the market, who see it as an essential condition to ensure fair competition. A consensus is believed to have been reached with Commissioners Neelie Kroes (Competition) and Günter Verheugen (Industry), not initially very favourable to this proposal, as it takes the view that it may create too much red tape and oblige the operators to delay their investments in optic fibre. This functional separation will be subject to a prior condition: before it comes in, the regulators must measure its impact on incentives to invest in their networks, both for the historical operator and its rivals.
The regulatory framework for electronic communications, which entered into force in 2002, comprises five directives and a decision: 1) the framework directive which outlines the principles and general objectives of the European policy on electronic communications; 2) the “access and interconnection” directive, stipulating the procedures and principles to be applied in order to guarantee an environment of healthy competition in terms of access and connection to the networks on the part of the principal operators; 3) the “authorisation” directive, which brings in a single authorisation system for newcomers to the market, instead of an individual licence system, in order to facilitate their entry to the market; 4) the “universal service” directive, which brings in an obligation for services in the field of electronic communications to be made available to other providers; 5) the “privacy and electronic communications” directive, which guarantees the protection of privacy and the protection of personal data in public communications networks; 6) the decision on the radio spectrum, which establishes the principles and procedures which the Commission recommends that the member states apply, in order to facilitate the development and balanced management of the spectrum. On top of these instruments comes a raft of guidelines for the national regulatory authorities to analyse and assess the power of the market and a recommendation defining the 18 markets subject to “ex-ante” legislation to be monitored by the NRA, which have been adopted by the Commission. The reform will apply to the whole of this body of legislation and comes in the framework of the three strategic pillars defined by the European Union: responding to the objectives of the “Better Regulation” initiative; completing the single market for electronic communications; and becoming closer to the citizens.
1) “Better Regulation”: the 2002 framework identified 18 markets which were not sufficiently competitive and which required “ex-ante” legislation in order to function correctly. The NRAs are tasked with carrying out regular analyses of these markets and reporting back to the Commission with their observations, proposing remedies wherever they observe obstacles to competition. The objective was to bring in competition on to these markets, with the long-term objective of crossing them off the list once the sector was sufficiently regulated. Further to the consultation procedure, the Commission noted that the framework had worked well, brought in greater competition and had not discouraged investment. Certain problems, however, persisted, which has prompted Commissioner Reding not to propose “regulatory holidays” and to continue down this path, by adding the functional separation of the networks to the “toolbox” made available to the NRAs. The Commission has noted sufficient competition on certain markets, and so the reform proposes that the number of markets requiring “ex-ante” legislation be reduced from 18 to 7. These are, for the retail market, access to the public telephone network for residential and non-residential fixed line clients (markets 1 and 2). For the bulk market, call origination on the public fixed-line telephone network (market 8); call termination on various individual public fixed-line telephone networks (market 9); the market for the wholesale provision of unbundled access (including shared access) to loops and sub-loops on metallic lines for the provision of broadband and voice services (market 11); the market for the wholesale provision of access to broadband (market 12); the wholesale provision of the terminating segments of leased lines (market 13) and voice call termination on individual mobile networks (market 16). The planned reform also proposes to change the system for the verification of the market, which is currently based on obligatory notification, for an “on demand” system for cases of major importance alone, for purposes of simplification. The change will mean NRAs will no longer have to systematically notify the Commission of their analysis for all markets. Better management of the radio spectrum is also being considered, with simplified access to the spectrum and more rational use of access bands. The rapid development of new technology that will require switching from analogue broadcasting to digital television, and increasing demand for bandwidths for mobile applications (the digital dividend) explain why the member states are adopting a new pan-European policy. The reform recommends lifting pointless restrictions on use of the spectrum, and encourages the member states to work together to identify common frequencies in order to have a smooth switch to digital. Commissioner Reding suggests that the bandwidths currently reserved for GSM mobile phones should also be allocated for the next generation of wireless technology.
2) Single e-communications market: The 2002 framework did not allow the creation of a single e-communications market, despite the efforts of the European Regulators Group (ERG). In order to create such a market, the reform suggests beefing up NRA powers in order to speed up implementation of the regulatory framework. It also suggests creating an independent pan-European telecoms authority to liaise between NRAs and the Commission and be answerable to the European Parliament. This would meet the currently perceived gap in NRA coordination and act as a single entry point for companies wanting to acquire spectrum user rights and deploy services beyond national boundaries. The Commission would increase its own powers of surveillance and control over the remedies put forward by the NRAs in close cooperation with the new authority in order to speed up their application on failing markets. It would also adopt technical harmonisation measures for issues like cost calculation, number portability, consumer protection and access to e-communication services by disabled end users.
3) Moving closer to the citizens: The reform of the regulatory framework must provide a direct advantage to citizens, who should have a wide choice at justifiable prices. Several domains have been identified where consumer services can be improved. The reform suggests: 1) improving the transparency of information provided by service suppliers regarding supply conditions and charges; 2) introducing a one working day deadline for transferring a number to another operator (landlines and mobile phones); 3) improving the implementation of the 112 emergency number service. Disabled people should have easier access to 112, and vulnerable people (the disabled, the elderly, people suffering from social problems) should be able to have unrestricted access to new basic technology. On protection of people's private life and network security, the reform suggests measures to strengthen existing arrangements, including: 1) consumers being informed if the protection of their personal information is jeopardised by a breakdown in a security network; 2) operators and NRAs having greater liability regarding the use of personal information and ensuring greater surveillance of network and service integrity; and 3) the fight against spam being stepped up.
E-communications are at the heart of business life. Ensuring the proper functioning of a single e-telecoms market is vital to ensure the EU has the appropriate level of competitiveness, which is why the Commission hopes the new regulatory framework can start to be implemented in 2009. (I.L.)