Brussels, 29 June 2006
Telecoms: Commission tables plans to boost competition among telecoms operators and build a single market for services that use radio spectrum
The Commission is launching today a public consultation on policy options for updating the EU’s telecom rules of 2002, the "regulatory framework for electronic communications". Electronic communications include fixed voice telephony, mobile communications and broadband - a market worth more than €270 billion in the EU in 2005. Reporting on the functioning of the framework, the Commission notes substantial progress since 2002 in opening up national telecom markets to competition and proposes to phase out ex-ante regulation in at least 6 of the existing 18 telecoms market segments, including those for national and international calls. For those markets where competition is not yet effective (such as the crucial broadband supply market), the Commission wants EU rules applied more effectively, so as to step up competition throughout the single market. The Commission thereby takes a clear stance against the idea of “regulatory holidays” for incumbent operators. The Commission also advocates moving towards a common, more market-based, approach to allocating the radio spectrum needed for innovative services and devices to work EU-wide. The Commission’s target is for the new rules to be fully transposed into national laws by 2010.
“Europe’s telecoms rules are a true success story for competition, investment and consumer interests”, commented EU Commissioner Viviane Reding, responsible for Information Society and Media. “However, we now need the courage to complete the process of market opening started in the 1990s. In today’s electronic world, national borders have become superfluous to technology, economic interests and consumer behaviour. Operators, technological innovators, service suppliers and citizens all stand to gain from a single set of well-executed EU rules. Stronger cross-border competition and better access to spectrum, the raw material of the information society, are indispensable for sustaining Europe's competitive advantage in the telecoms sector.”
The public consultation stage of the “2006 Review” of the EU’s regulatory framework for electronic communications, which was adopted in 2002 by the European Parliament and the Council of Ministers, formally begins today. The four documents released by the Commission for public consultation today are a Communication, a Staff Working Document, an Impact Assessment that identifies the main policy options under consideration, and a draft Recommendation on relevant markets.
A single market for radio spectrum
The Commission proposes that certain bands of radio spectrum should be managed more effectively through greater use of common rules established throughout Europe. Spectrum should also increasingly be assigned according to principles of market demand. This approach would open up new pan-European opportunities for innovative firms and deliver benefits to citizens EU-wide. “It is a competitive disadvantage for Europe that we do not have, as in the US, a single regime for spectrum management, but 25 different ones” commented Commissioner Reding. “That is why many stakeholders propose the creation of a European spectrum agency. I believe we should discuss this idea.”
Radio spectrum is critical for any application that relies on wireless communication, from mobile telephony and broadcasting, to guidance systems for planes, ships, satellites and defence. This makes it a public resource – and an economic asset – that is in ever-increasing demand. Though radio spectrum usage is still tightly regulated in most EU Member States, radio transmissions cannot be confined within national boundaries, and many types of radio devices are highly portable, with citizens having a natural expectation for them to work throughout the EU.
Better regulation: from 18 to 12 regulated markets
In the draft for a new Recommendation on relevant markets, the Commission considers to reduce the current list of 18 specific electronic communications markets that are deemed suitable for ex-ante regulation. “The EU telecoms rules will remain in place only until we have achieved effective competition in all markets”, commented Commissioner Reding. “Competition is already effective in one-third of these markets. In the remaining markets, we now need a more efficient, timely and consistent application of the EU rules. It is a serious problem for Europe’s single market if national regulators vary in their determination to remedy existing competition problems speedily. Delay risks putting operators from other EU countries at a disadvantage.”
Neelie Kroes, Commissioner for Competition, added: “Today signals an important step in further deregulating the telecommunications industry. Our aim is less, but more effective, regulation. Regulators should not intervene in markets where competition ensures low prices, high quality and innovative services for consumers. But in other parts of this sector, where regulatory intervention remains necessary, it must be made more effective and harmonised across Europe.”
In most Member States, intense competition to supply national and international call services has emerged in the past years as a result of ex-ante regulation. In these markets, regulation can therefore be phased out. In addition, the Commission today requests stakeholder input on whether two further markets could be removed from the list of markets suitable for regulation: the wholesale markets for access and call origination on public mobile telephone networks and the market for broadcasting transmission services. However, the overall health of competition is still too precarious to justify abandoning sector-specific regulation in other wholesale markets, such as broadband. Incumbents continue to control bottleneck infrastructure and new entrants are still dependant on access to such infrastructure to be able to compete. Here, the Commission proposes to make regulation speedier and more efficient and to simplify procedures.
All of the Commission’s ideas for reform outlined today will undergo public consultation until the end of October 2006. Taking account of the comments received, the Commission intends to propose legislative measures to Parliament and Council at the end of 2006. The revised Recommendation on relevant markets is scheduled for adoption by the Commission, and entry into force, in the first quarter of 2007.
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