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SPEECH/06/795












Viviane Reding

Member of the European Commission responsible for Information Society and Media




Why we need more consistency in the application of EU telecom rules






















Telecom Italia Reception, Brussels
Brussels, 11 December 2006

Ladies and gentlemen,

I would like to thank Telecom Italia and its efficient Brussels team very much for their invitation to this reception. Allow me to make only a few remarks before we will continue in certainly fruitful bilateral discussions during the rest of the evening.

I am just coming from a very important meeting of the EU Council of Telecom Ministers. For all those who believe – like I do – in the need of a true internal market for Europe's electronic communications sectors, this Council meeting was very encouraging, and this for three reasons:

• First of all, we managed to make substantial and fast progress on the new EU regulation to bring down mobile roaming charges in Europe. All ministers agreed with the Commission that we need to legislate on the matter, and that legislation needs to cover both the wholesale and the retail level of roaming tariffs. Last fine-tuning will certainly need to be discussed, such as the question of the level of the maximum ceilings – here, I find the German proposal particularly remarkable – or the issue of whether or not we need to include also data roaming, as suggested, inter alia, by Ireland and Poland and several members of the European Parliament. However, after today's constructive discussions, and in view of the clear commitment of the incoming German Presidency to have a very ambitious roaming regulation adopted as soon as possible, I am confident that consumers in Europe as well as business travellers will be able to benefit from substantially lower roaming tariffs already in summer 2007.

• Secondly, the Telecom Ministers and I had a very fruitful exchange of views yesterday evening over an issue of strategic importance for Europe's electronic communications markets: the need for a new approach to radio spectrum management in the European Union. You may remember that in September 2005, the Commission has proposed a new strategy to ensure that radio spectrum can be used more efficiently and also across borders in the European Union. For this, I have proposed to replace 25 bureaucratic spectrum management administrations by less red tape, more market and more joint European decisions. I know very well that just a year ago most ministers reacted with a lot of scepticism to my ideas and mentioned all the difficulties that they could cause. I am therefore very satisfied that yesterday evening, over dinner, ministers mentioned not the difficulties, but the tremendous economic opportunities of a more market-oriented and more European way of spectrum management. After this discussion, I feel encouraged to put ambitious proposals for a reform of spectrum management on the table in the first half of 2007 as part of my proposals for a new regulatory framework for Europe's electronic communications sector.

• Thirdly, we managed today in the Council to overcome the last hurdles for a telecom decision of true European importance. Already in spring this year, the Commission had proposed to reserve a number starting with 116 for a Europe-wide helpline for missing children. Unfortunately, this decision got for some months lost in bureaucratic procedures among national experts from the Member States. Therefore, I called on the Ministers today to give me their support for ensuring a speedy resolution of this matter. I told them that here we have a joint responsibility, as politicians but also as mothers and fathers, to ensure that Europe and the telecom technologies are able to help the weakest members of our society. I am glad to say that today, the Commission proposal was endorsed politically by the Council, and I am confident that in the course of 2007, the number 116000 will be available as helpline for missing children throughout all EU Member States.

Ladies and gentlemen,

Roaming, radio spectrum and pan-European telephone numbers – all these are issues which show the added value joint European solutions can bring to consumers, industry and society at large.

I am therefore very worried when I see the new regulatory scorecard of the organisation ECTA, which was made public today. On the one hand, this new scorecard shows that those EU countries which have fully implemented and efficiently applied EU rules have been the most successful in terms of competition and investment on the electronic communications markets. On the other hand, however, the ECTA scorecard also shows the deplorable state of fragmentation of regulation across the 25 Member States. Lack of independent regulators, lack of properly resourced regulators, delays in applying remedies, problems caused by inefficient remedies – all these findings are truly appalling after more than 4 years since the entry into force of the EU's regulatory framework for electronic communications.

Problems of consistency, efficiency and speed of regulation in markets where there are still competition problems threaten to become a serious obstacle for the development of a competitive internal market for the telecom industry.

With the reform of the EU’s regulatory framework, I therefore see a need to take a decisive step towards the completion of the internal market.

The main reason is that over the past years, we have seen that a pan-European telecom industry is emerging. The search for economies of scale and the implementation of pan-European strategies, cross-border investment has driven merger and acquisition activity to above 70 billion Euros in 2005, the highest level since 2000. Incumbents today are receiving between 5 and 27% of their income from European business outside their home country. Some are becoming challengers in other EU markets even while remaining incumbents at home. This development is changing the market position, business orientation and also policy view of many operators.

We therefore need greater consistency and effectiveness in the application of remedies to repair the fragmentation of the internal market in the telecom sector.

The Commission has proposed, as one possible option, to extend the internal market-control that is already exercised today by the Commission with regard to market analyses, also to the remedies. In my view, the Commission, as guardian of EU law, must be able to tell a national regulator that a measure proposed to remedy competition problem is inadequate; and to request that a national regulator adopts speedily an adequate remedy.

I know well that many telecom incumbents have no sympathy for this proposal. For example, ETNO – the trade association of incumbent operators – says in its contribution to our public consultation that in their view national authorities know best what is happening on their markets.

As a Luxembourger, I of course feel very strongly about the principle of subsidiarity, which means taking decisions as close as possible to the source of a problem.

However, in all frankness, the pleading of ETNO for keeping things in the hands of national regulators is not necessarily the best argument for the effectiveness of the present system – if we measure effectiveness in terms of speedy implementation of EU rules to ensure competition.

I am very glad to see that Telecom Italia has a differentiated position in this respect, one that is clearly more friendly to the idea of European integration and a European internal market.

We at the Commission know very well the experience from more than 500 Article 7-notifications: very often, this experience has shown that “two pairs of eyes” see more than only one.

Just a couple of weeks ago, the Commission could convince a national regulator that a problem on the leased line-markets required further attention because the economic data given to the national regulator had been insufficient. Only in the second phase of the Article 7 procedure, which had allowed the Commission to enter into direct contact with market participants, this solution could be found. Without the Commission’s role of surveillance being foreseen by the EU legislator in the present regulatory framework, we may well have ended with a wrong decision on this important market for leased lines.

I also read in a number of contributions to the public consultation on the review of the regulatory framework that in many instances, the Article 7 procedures take very long and that in particular the role of the European Regulators Group (ERG) would require clarification in this context.

I have some sympathy for this analysis.

But let us be very clear about where the call for less bureaucracy could lead. Because the most effective and least bureaucratic way to achieve a real level playing field for telecom operators across the EU would clearly be to replace the present game of “ping pong” between national regulators and the European Commission by an independent European telecom authority that would work together with national regulators in a system similar to the European System of Central Banks. In such a system, national regulators would continue to act as direct contact points with operators and could directly analyse the market as they do today, but would have to operate as a system, and in line with the guidelines and decisions of their supranational level. This is certainly an idea that will deserve further reflection in the months to come.

I am currently working closely with national regulators in the ERG – which is, as you know, an advisory body to the Commission – to explore the best possible solution to ensure more consistency and better regulation in the internal market. Let me be very clear about this: More important than institutional issues, and questions of power, is for me the internal market issue itself that is at stake. For me, there exist therefore no taboos in this important discussion.

Ladies and gentlemen,
I wish you a very fruitful discussion on the future of the telecom sector, and Merry Christmas to you and your families.


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