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Telecoms liberalisation and sports rights: the benefits of competition law brought to light at the European Competition Day

European Commission - IP/02/296   22/02/2002

Other available languages: FR DE DA ES NL IT SV PT FI EL

IP/02/296

Brussels, 22 February 2002

Telecoms liberalisation and sports rights: the benefits of competition law brought to light at the European Competition Day

The liberalisation of the telecommunications sector and the application of competition rules to sports broadcasting rights are the two main topics on the agenda of the fifth "European Competition Day" which will take place in Madrid on February 26. The twice-yearly event is this time organised by the Spanish presidency of the European Union in co-operation with the European Commission. European Competition Commissioner Mario Monti, who will attend the meeting, will strive to demonstrate to consumers the benefits of competition in the telecoms sector by way of cheaper prices and greater innovation and choice. The participants to the meeting, which will be opened by Spanish Minister for Economic Affairs, Rodrigo Rato, will also discuss the application of the EU competition rules to the sports sector and in particular to broadcasting rights, an issue particularly important for football-loving Spain.

The telecommunications sector was fully liberalised in 1998 through a combination of regulation and enforcement of EU competition rules. The end of national monopolies resulted in cheaper prices for consumers especially for long-distance calls and in the explosion of mobile phones which are now an almost indispensable communications tool within the reach of most citizens. The mobile phone penetration rate in Spain, reached 62 % in 2000, compared to 48% in the previous year, one of the highest in the 15-nation Union.

The liberalisation of the sector and the advent of new technologies also brought about a wider choice of services to consumers such as Internet access, electronic commerce and tomorrow the so-called third-generation of mobile phones which will provide Internet services, video imaging and an array of other services.

The basis for a truly knowledge-based economy will not be complete, however, until there will be an open and non-discriminatory access to the last-mile of telephone cables into European residents' homes, the so-called unbundling of the local loop (ULL), which is now the focus of competition policy.

Local loop unbundling was mandated across Europe by a regulation of December 2000, but it has so far not produced the expected results. The high costs associated with unbundled access thwarts the business plans of new market players, which are also confronted with obstructive practices of the incumbents. The result is that some newcomers to the market have turned away from the residential market leaving the field again and only to the incumbent players.

The European Competition Day will be opened by Spanish Minister Rato and will see interventions by Mr Monti as well as by the Vice-President of the European Parliament's Committee on Economic and Monetary Affairs, José Manuel Garcia-Margallo, Spanish Director general of competition Luis Guindos and the head of Spain's consumer association Francisco Javier Angelina.

After the discussion on telecoms, a second panel will discuss the selling of broadcasting rights to football and other sports events. Sports rights have increased significantly over the years to become one of the most important sources of revenues for sports associations and especially football clubs. They are also of crucial importance for television channels, most notably pay-TV companies whose survival or success depends hugely on two key ingredients : films and popular sports events such as the UEFA Champions League, national football leagues, the World Soccer Cup or the Olympic Games.

The Commission has objected to the selling by UEFA on behalf of national clubs or football associations of the broadcasting rights to the final stages of the UEFA Champions League. According to the Commission's preliminary view expressed last summer, such behaviour amounts to a price fixing agreement and limits the broadcasting of football on TV since one broadcaster usually gets it all. This can restrict competition between broadcasters and consumer choice. UEFA is currently discussing with the Commission ways to address these concerns.

Closer to a Spanish audience, the Commission has also taken steps to ensure that Telefonica and Sogecable, Spain's leading digital TV platforms, do not monopolise the rights to the Spanish Premier League by means of their joint venture, Audiovisual Sport. This intervention, which is not over yet, has led to greater competition and lower TV subscription fees for the consumer.

The European Competition Day was first held in June 2000 in Lisbon. It is organised twice a year under the rotating presidency of the Union.

The full programme of the two-day event can be consulted on the Internet:

http://ec.europa.eu/competition/misc/european_competition_day/#madrid

as well as on the Spanish presidency website

http://www.ue2002.es > Calendar > February 26.


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