Reding targets ‘federal’ Europe…for telecoms

Viviane Reding, the European commissioner in charge of telecoms legislation, says she now has the evidence she needs to justify planned reforms of EU regulation of the rapidly developing e-communications market.

Wielding her department’s annual analysis of the European telecoms market, to be released today (29 March), she reels off a selection of figures to illustrate how good the pan-European telecoms sector could be.

"We are better than the US market," she says. "Our investments are higher, our efficiency in mobile is higher and our broadband take-up is higher. I don’t understand why we always say that the Americans are better. Our best players are better than the Americans."

Eschewing bad news, such as laggard broadband transmission speeds, Reding reports that the EU electronic communications market is currently worth €290 billion.

The mobile sector is especially healthy. According to the report, the saturated sector still managed growth of 4.6% last year. Mobile penetration (phones per inhabitant) is 103% overall, with particularly strong figures for Luxem-bourg (171%) and Italy (134%).

Broadband penetration rates in Finland, Sweden, Denmark and the Netherlands lead the world. Investment in the sector has increased for the fourth year in a row, up 5% in 2006, compared to 2005. As a whole, European countries invested more in broadband networks than the US and Japan, according to Reding.

This year’s e-communications report, the twelfth so far, will inform the European Commission’s proposals for reform of EU telecoms legislation later this year.

Changes to 2002’s regulatory framework for electronic communications will subtly channel power away from national regulators, significantly altering the functioning of member states’ markets.

Reding wants to iron out inconsistencies in the application of 2002 telecoms rules across the EU, which not only prevent current market players from reaching their full potential, but also lock out innovative new entrants that do not have access to incumbents’ infrastructure.

She believes that the market is not yet making best use of new technologies, including 3G networks and satellite broadband, which have the potential to increase substantially the scope of fixed and mobile telecoms provision.

But her approach to reform will avoid the confrontational tactics employed last year when she moved to cap roaming fees charged to consumers receiving and making mobile phone calls while abroad.

Insisting that her approach is not a "top-down thing", Reding claims that regulation will eventually be pared down to the point where competition authorities can take over market supervision. In reforms, she will focus only on bottlenecks. "It is high time to find business models so that industry moves more quickly," she says. "What we are doing is focusing on the real problems. Better regulation does not mean not regulating, it means concentrating on the real problems."

As Reding puts it: "One of the elements of the reform is that we need Europe-wide systems. For the moment, we don’t have pan-European services, we don’t have pan-European operators and we don’t have pan-European networks."

A key word in this year’s reform will be federalisation. Employing a softly-softly approach, as announced in February, the Commission will ensure greater uniformity of behaviour by national regulators. The European Regulators Group is to have a secretariat in Brussels and take decisions by qualified majority voting. The Commission’s power of veto, a term used by regulators, but avoided by the Commission, will still be wielded.

Management of spectrum, the resource allowing mobile communication, which is often carried out by national regulators, will also be subject to the same process of federalisation.

"We will see how 27 scattered regulatory systems can come to a common logic," says Reding.

"We will see in the same way how 27 national spectrum management systems will also do so."

Viviane Reding, the European commissioner in charge of telecoms legislation, says she now has the evidence she needs to justify planned reforms of EU regulation of the rapidly developing e-communications market.