Reding turns screw on telecom watchdogs

Viviane Reding, the European commissioner for the information society, is poised to draw up EU-wide rules on connection fees charged by mobile phone operators in a move that could set her once again on a collision course with national telecoms watchdogs.

The market is currently split on several levels with significant differences between charges levied by fixed and mobile operators. There are also variations in the caps on charges applied to new market entrants and incumbent operators. A European Commission official said that Reding would be targeting both issues, whether or not watchdogs manage to agree on a common EU-wide methodology for harmonising rates.

Watchdogs have been trying to agree on ways of harmonising mobile termination rates for the past two years, under the umbrella of the European Regulators Group (ERG). They were set a deadline of the end of this year to agree on a common approach.

The official said that Reding would be expecting a "credible solution" from the ERG, rather than vague statements on the need for watchdogs to tailor solutions to their individual markets. "If the ERG does not deliver, the Commission could take a decision under article 19 of the [2002] framework directive," he said.

The move would be a new blow to the ERG. Last month, Reding proposed the creation of a controversial pan-European authority that would effectively subsume the group, as part of an overhaul of EU telecoms rules dating from 2002. The proposal has increased the pressure on the ERG to show how much it can deliver on its own.

Termination rates vary widely from 16.49 cents in Poland to 2.25 cents in Cyprus, according to Commission figures. Earlier this year, Reding attributed the differences to "regulation" rather than "different market conditions", noting that the "price trends" were not "moving in one direction across Europe".

French regulator ARCEP is heading the ERG’s work on termination rates. France will lower caps on termination rates charged by mobile operators from 7.5 cents to 6.5 cents as of next year, a move that could put its operators at a competitive advantage if there is no harmonisation at EU level. Paul Champsaur, chairman of ARCEP, is said to have expressed exasperation with the snail-like progress being made.

ERG spokeswoman Paola Calestani said that the ERG planned to approve a draft common position on rules being applied to new market entrants and incumbents this week (7 December). A final decision would be taken in February. She added that the ERG was working with the Commission on the harmonisation of charges levied by fixed and mobile operators.

Consumer groups are concerned about the uneven market conditions. "In the long term, it blocks competition," said Levi Nietvelt, economic officer at consumer group BEUC. High mobile termination rates, he claimed, were holding back digital operators, preventing them from offering broadband/TV/fixed line packages with competitive rates for fixed to mobile calls.

Additionally, he said, consumers were being locked into networks. High termination rates provide an incentive for operators to keep traffic within their own networks by offering free minutes, he said, so that the dominance of bigger players becomes self-perpetuating, with smaller operators effectively subsiding bigger networks.

• EU telecoms ministers meeting on Monday (3 December) endorsed a new EU-wide standard for mobile television. Member states will now be expected to encourage and promote use of the Nokia-led DVB-H standard as of early next year. Information Society Commissioner Viviane Reding could propose next year to make the standard mandatory if take-up is considered insufficient. Britain, Germany, Spain and the Netherlands are among member states opposed to making the standard mandatory.

Viviane Reding, the European commissioner for the information society, is poised to draw up EU-wide rules on connection fees charged by mobile phone operators in a move that could set her once again on a collision course with national telecoms watchdogs.