Telecoms super-regulator battle ahead

Viviane Reding, the European commissioner for information society and media, is proposing to overhaul telecoms market regulation with detailed provisions for an EU super-regulator and plans to separate the network and service divisions of telecoms firms.

The review of 2002’s regulatory framework for electronic communications, set for release at the end of October, is an attempt to make existing rules more relevant to fast-moving telecoms technologies and to encourage ‘federalisation’ of EU markets. Reding’s review was initially to have been released in June, but was allegedly postponed to ease the introduction of a super-regulator.

The new regulatory body, named the European electronic communications market authority in proposals, would advise the European Commission and be accountable to the European Parliament. It would, says the paper, "act in furtherance of the internal market by improving consistency of application of EU rules" and would "operate within a network of national regulatory authorities".

Plans for the authority will come as a blow to the European Regulators Group (ERG), which had sought to safeguard national regulatory independence. A Commission official working with national regulators conceded that the authority would be considerably less consultative than the ERG. "The executive director will not be able to respond on a daily basis to regulators or he will be paralysed," he said.

"If you look at areas such as spectrum management and Voice Over Internet Protocol, these are areas where there is a [limited] degree of harmonisation preventing the real availability of a single market for companies," he said.

Previously mooted plans for a separate spectrum agency have been dropped from Reding’s proposals. Instead, the role of super-regulator would be extended to oversee the allocation of spectrum, the limited natural resource allowing transfers of electronic data. The authority would serve as an "entry point for firms seeking to acquire rights-of-use".

Moves to unbundle the network and services functions of telecoms firms, known as ‘functional separation’, are likely to draw criticism from countries such as Germany, which is currently mounting a legal defence of its decision to exempt Deutsche Telekom’s high-speed VDSL network from competition rules. Vertically integrated telecoms firms, such as Deutsche Telekom, that block access to infrastructure for new entrants, are cited as a cause of competition bottlenecks.

The proposals are intended to be rolled out in 2009. "It is clear that in the Council, the discussion will be long and intense. There is no doubt about that," said the official.

Viviane Reding, the European commissioner for information society and media, is proposing to overhaul telecoms market regulation with detailed provisions for an EU super-regulator and plans to separate the network and service divisions of telecoms firms.