Telecoms industry hopeful of deal on veto

Date: 06/12/01

By Peter Chapman

TELECOM firms said the Belgian presidency was close to a breakthrough agreement that would meet most of their demands for the European Commission to get a veto on decisions taken by national regulators.

They said Belgian Telecoms Minister Rik Daems will table

a new 'compromise' on the framework directive - the linchpin of the entire package of telecoms laws launched last year by Commissioner Erkki Liikanen.

The deal would give the EU executive the final word in the way regulators define the markets where competition bottlenecks exist and intervention is needed. The Commission could also overturn the way regulators decide which firms enjoy 'significant market power' in these markets.

Michael Bartholomew, director of ETNO, the European telecom network operators lobby, said he was "encouraged'" by Daems' bid to break the deadlock, adding that the compromise had been well received by diplomats ahead of today's meeting.

"The Belgians have put forward a very interesting compromise," said Bartholomew. "It gives the Commission very specific powers, which is what we are seeking. We will have to see if it is accepted by member states."

Industry says a veto right is vital to ensure the functioning of the EU single market. If member states were left totally unchecked, there would be a risk of widely divergent rules from one country to another - making it a nightmare for telecom companies moving into new markets.

Liikanen and MEPs in the Parliament's industry committee share their concerns.

But member states have rejected a veto thus far, insisting that local regulators are best placed to police national markets.

Without a compromise, lengthy conciliation talks would be a certainty - delaying the end-of-year target for approving the whole package of new laws.

But Bartholomew said telecom operators still had concerns about other proposals by Daems and parts of the telecoms law that look set to remain untouched by ministers and MEPs.

He said operators would have "little faith" in a new consultative committee of regulators that would meet to ensure an even application of the new rules.

Bartholomew added that the overall package of laws unveiled last year by Liikanen would see regulation of operators increase.

He argued this was the opposite of the stated goal of a lighter regulatory touch for the industry, now that competition has increased following the full liberalisation of the sector in 1998. He said the new laws would increase regulations in new areas such as mobile telephony. MEPs are due to vote on the issue on 12 December.

If ministers reach an accord today that is acceptable to the Parliament, the law could be rubber-stamped at another ministerial meeting before the end of the year.

According to the telecoms industry the Belgian EU Presidency is close to a breakthrough agreement that would meet most of their demands for the European Commission to get a veto on decisions taken by national regulators.