Telecoms await overhaul

Telecoms await overhaul


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Reding cites “political will” to go ahead with reforms

The European Commission last Thursday decided to go ahead with proposals to overhaul the European Union’s telecom sector to free retail markets and focus on wholesalers in an attempt to enforce single market and enhance competitiveness.

Outlining the planned shake-up for splitting network and service operations of big companies which are dominating the 270 billion Euro industry, which has a growth rate much higher than the EU economy, Commissioner for Information Society and Media Viviane Reding said, “We must open the market when they are dominated by dominant players.” Stressing that the measures were for European consumers she said, “Where the markets are opened, investments are done and prices go down for consumers.”

Aiming at a kind of decentralisation, she spoke of plans to phase out EU regulations on companies operating in such areas as sales of telephones, mobile phones and cable TV services and leave control of this sector to competition authorities. Reding noted she was aiming for “light” legislation. But her proposals – along with a bill aimed at cutting mobile phone costs abroad – have already sparked outrage among big industry players while smaller operators are calling for stronger rules to give them better access to the market.

Earlier speaking in Brussels at a telecom event, Reding proposed greater powers for the EC in the form of an independent Europe-wide regulatory body.

“The most effective way to achieve a real level playing field for telecom operators across the EU would, of course, be to create an independent European telecom regulator that would work together with national regulators,” she said.

She said, “a faster service, the label ‘triple play’ or the use of fibre technology instead of copper will not by themselves suffice for the recognition of a new market” to be exempt from regulation. Another commission official pointed out that this “triple play” where the provider gives telephone, internet and TV services etc packed into one package is slowly gaining popularity in Europe.

Although not very popular with the EU member states, her plans also suggest the creation of a Europe-wide independent regulator to guide member states on how to apply EU telecoms rules and to tackle countries that refuse to comply with EU law.

Interesting to note that while the US has one, the EU has 25 regulators for spectrum broad band use and the commissioner is aiming to bring this down to more pragmatic status. Radio spectrum is heavily used for broadcasting and mobile phones, but also for guiding planes, ships, satellites and defence.

Speaking about the proposal, which Reding acknowledges “is not yet very popular” among the national regulators, is the formation of a single European agency for handling spectrum issues.

“I also believe that we need to put the idea of a European spectrum agency on the table. We have to recognise the competitive disadvantage the EU faces because, instead of having one single regime for spectrum management and spectrum licensing, as they do in the US, we have 25 different ones,” she said. “You should see this as a clear indication of my political will to ensure that telecom regulation will remain limited in time,” she added. Reding’s proposed deregulation of parts of the telecoms sector comes a month before she plans to table legislation aimed at forcing mobile phone operators to slash the cost of making calls abroad. Several companies have cut roaming fees in an effort to undermine the case for legislation, but Reding said this was not enough.  

The commissioner is currently also engaged in a battle with Germany over its plans to temporarily shelter phone giant Deutsche Telekom from competition as it builds a three billion Euro high-speed internet backbone in the country’s main cities.  

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