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SPEECH/11/666

Neelie Kroes

Vice-President of the European Commission responsible for the Digital Agenda

Opening Europe's telecoms markets -BEREC's crucial role

Riga, Latvia, 14 October 2011

Opening Ceremony for the Body of
European Regulators for Electronic Communications (BEREC) Office

Ladies and Gentlemen,

I am delighted to participate in today's ceremony to open BEREC's new office in Riga.

BEREC was an important step for the electronic communications sector and towards our goal of a vibrant digital Single Market. It should improve the consistency and transparency of regulatory action and the dissemination of best practices across Member States.

The process of opening and integrating Europe's telecoms markets started more than ten years ago. It has been a journey of discrete steps, and several pieces of legislation. The recent entry into force of the revised telecoms framework represents a further major leap towards completing the internal telecoms market.

Now we need to make these comprehensive new rules a reality. Once those member states yet to do so implement them into national law, these rules stand to deliver high quality and competitive telecom services for European citizens and businesses.

Dear President, dear Prime Minister, your country is indeed hosting an important European body. The BEREC Office constitutes an important element in this new architecture.

The BEREC Office should contribute to a consistent regulatory approach, providing professional support, disseminating regulatory best practice and facilitating BEREC's decision-making.

Over time I am confident the office will use its resources wisely, and build up its expertise and knowledge-base for the benefit of not only BEREC, but also individual national regulators.

I am delighted to see some of those national regulators also represented here today. They play a crucial role, supervising operators and suppliers and making sure everyone follows the rules equally.

Your work in such a technical area is not always visible to the general public. But it makes a difference to their lives, ensuring they pay fair prices, can easily choose and switch suppliers, and get the service that they are promised.

And I'd like to congratulate you for that good work. In the years to come, the telecoms package means your competences broaden and your independence will be strengthened: I know that you will deliver on these important responsibilities.

I am also pleased to note that national regulators play an important role in contributing to the Digital Agenda's goals, not only through applying these rules, but also through other activities, such as consumer protection and the promotion of broadband investment.

Let me turn now to a few of the particular policy challenges currently on my plate, for which the help and support of BEREC will prove essential.

First, roaming. I welcome BEREC's positive opinion on our overall approach, which is to introduce structural changes to encourage sustainable competition in the EU roaming market. And I also welcome BEREC's support for the wholesale access obligation that we have proposed, as well as its openness to look at other structural solutions. We will certainly draw further on BEREC's expertise regarding practical, technical implementation measures for this approach.

Of course, the substantive discussion now takes place between the co-legislators. And time is not our friend, if a new set of rules is to be in place by the time of expiry of the current regulation in June 2012. However, we should remember the key objectives we put forward in our proposal: to facilitate new entry and to increase consumer choice in a user friendly way. Only by meeting these objectives will we enhance competition in the roaming market.

Second, net neutrality. I have long stressed the importance of having an open Internet; and that the best way to do this is through competitive markets, where customers know what they are getting, and are able to easily switch providers. I have also said that any action must be coordinated, and must be on the basis of facts and figures, not passion. Therefore the technical work that BEREC is doing in this area - investigating transparency, blocking, throttling and switching, and providing those facts and figures – is crucial. And I very much look forward to the outcome.

Third, on some measures crucial to delivering superfast broadband and getting every European Digital, the mission at the heart of the Digital Agenda.

Last year we adopted the Recommendation on Next Generation Access, which sets out key principles on how to promote superfast broadband roll-out.

To ensure consumers benefit the most, the Recommendation balances the need to encourage fibre investment with the need to protect competition.

And it's good to see that, when it comes to infrastructure and broadband access, the NGA Recommendation is now being routinely referred to by national authorities.

We could still up our game here. We can make better use of other important tools in the Recommendation, tools like co-investment, risk-sharing mechanisms and innovative pricing schemes. These are underused in most Member States, even though they are particularly useful in the current times of squeezed resources.

And I am also aware that in some areas, remedies imposed by National Regulators need to adjust to changing conditions - for example where parallel networks and alternative platforms, like upgraded cable networks, now co-exist.

Most importantly, in relation to fibre investment, I would today like to highlight work we are doing in developing further guidance in two key areas.

My goal is an approach in Europe which is consistent and effective in promoting investment and competition. Of course, national circumstances differ, and that needs to be taken into account; national authorities need the freedom to fine-tune. But where the circumstances are equivalent, so should be the approach taken.

To foster investment within a true Single Market, and get the best deal for consumers, we need a predictable regulatory environment to promote investments, we need transparency and we need competition within and across borders.

So with that in mind we have started work on two guidance projects, on which BEREC is already involved. First on costing methodologies so we can set access prices in a consistent way and at the right level. And second on non-discrimination.

In these two areas, we will be working closely with BEREC, national regulators and industry to come up with a set of key principles.

In relation to the first point, access prices, we must again balance the need for competition with the need for the right investment incentives for operators who face huge costs.

This has to work on several levels. If copper access is priced too low, it may erode broadband retail prices and make fibre products less attractive to invest in. If too high, incumbents may prefer to make good, easy profits on legacy infrastructure rather than invest significant amounts in new fibre networks. Furthermore, an inconsistent approach within Europe would have implications for market development.

In relation to the second point, non-discrimination, we must eliminate or, at the very least, significantly reduce the incentives and ability of vertically integrated network operators to discriminate against those seeking access.

Most national regulatory authorities have imposed non-discrimination remedies for several years now, even if they have not always succeeded in stopping discriminatory behaviour. But what is equally problematic is that national authorities across the EU take divergent approaches when it comes to imposition, application and enforcement. And so similar problems receive very different remedies in different Member States.

For both projects, we have been looking very closely at the facts, including several, fruitful working level meetings between BEREC and the Commission services.

We have now launched a public consultation on these issues and are planning a workshop towards the end of the consultation period.

I look forward to getting BEREC's input on the questions raised and also to continuing our close co-operation in this area. I strongly encourage the office to actively cooperate and help BEREC on these deliverables.

So thank you all for coming today.

The inauguration of the BEREC Office is a major stepping stone for the organisation, a prerequisite for it to carry out its challenging role effectively, independently, and successfully.

We have put a lot of effort over the past months to make the Riga Office administratively autonomous and fully operational with a critical mass of staff. Now this has become a reality, and I am confident that BEREC will now be able to take on board the important tasks accorded to it.

I am particularly delighted that it was possible to set up the Office in such record time. This success is to the credit of the Administrative Manager Mr. Ando Rehemaa and his team. So thanks to all of them.

And I would like also to thank the Latvian Government for the great support they have given us. So may I take this opportunity to thank both of you in person, President and Prime Minister, for this fruitful cooperation.

Today the BEREC office becomes a reality, and this is also your success. The challenges ahead are considerable. But our expectations for BEREC are high.

Thank you for your attention.


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