Calls for EU telecoms agency

Date: 17/04/1997

By Chris Johnstone

MEPs campaigning for a European regulator to be appointed to oversee the move to full competition in the telecoms sector have been given a significant boost by the findings of a key report.

The study, carried out on behalf of the European Commission's Directorate-General for telecommunications (DGXIII), gives qualified support to the idea of creating a European telecoms agency.

But although the report's conclusions will be greeted enthusiastically by the European Parliament, EU governments are sceptical about the idea.

Many of them, including Germany and France, have just established national regulators to pave the way for - and supervise the first days of - full liberalisation, and the UK is against exchanging its experienced national regulator for an untried body which would have to prove itself.

Many see the report as putting down a marker for a future overhaul of the regulatory framework, rather than something which will provoke immediate changes.

“The Commission itself has kept its head down after one of Industry Commissioner Martin Bangemann's information groups caused an outcry by calling for a European regulator,” said one national expert.

Demands for an EU watchdog stem from fears that national authorities may not have the know-how or desire to ensure fair play when European telecoms companies are allowed to compete on each other's home markets and across all sectors from January.

The study by independent consultants pinpoints issues such as allocation of numbers and frequencies for mobile phones as areas where a new European telecoms body could carve out a useful role for itself.

But it says wider political issues would have to be left in the hands of the Commission and national ministers.

The issue of finding the right regulatory framework for telecoms liberalisation was raised by the Commission last December in its Green Paper on telephone numbering, when it posed the question of whether the share-out of key phone numbers should not be handled by a pan-European authority.

Some industry experts suggest this could be a Trojan Horse for a much more powerful body in the future.

British Telecom and the UK government are calling instead for a committee of national regulators, chaired by a Commissioner, to ensure there are no foot-draggers on free and fair competition. BT argues its remit should cover licensing, interconnection agreements, discrimination and cross-subsidies.

The company is worried that old habits of national preference will continue in some countries after liberalisation, with national regulators tipping the competitive balance in favour of their former monopoly companies.

ETNO, which represents a group of European telecom operators, has identified a role for a regulator in coordinating market opening and settling disputes, but argues national authorities should continue to be responsible for deciding what services should be guaranteed to users, at what price and with what consumer safeguards.

Officials in DGXIII are walking a tightrope on the issue. Some say the case for or against a European regulator will become clearer after 1998 if complaints start flooding in about discrimination.

National regulators are already having to adapt to a competitive multinational environment in liberalised sectors such as mobile phones. In many cases, outside firms have teamed up with local ones to enter the market, blurring the distinction between national and foreign firms.

However, independent reports have shown that even in the fast-moving mobile phone sector, the long-established companies often get the best frequencies for their services.

Commission officials originally favoured setting up a single body to hand out licences for telecom services. But this was eventually rejected in favour of the current framework of national authorities working according to EU guidelines and deadlines.