Entrants Challenge EC’s ‘Optimistic’ View of Markets
BRUSSELS -- The European Commission’s (EC) 10th annual report released this week found telcos’ attitudes toward the state of their sector somewhat optimistic, but it acknowledged “very clearly” that large challenges loom, said Peter Rodford, the head of unit of the Information Society Directorate Gen. that did the report. Meanwhile, several speakers said the document paints too rosy a picture of Europe’s telecom markets. Their comments came Wed. during day 2 of the European Competitive Telecom Assn. (ECTA) annual regulatory conference.
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Rodford reviewed key findings of the report, saying it concluded that competition is increasing, new entrants are investing, and consumers are benefitting. But he said 2 major stumbling blocks remain: (1) The fact that transposition of the e-communications regulatory package isn’t complete across the 25 EU member states. (2) Questions must be settled about how to ensure conformity among member states under the regulatory framework and how to apply the new directives. The overall political message from newly appointed Information Society Comr. Viviane Reding, Rodford said, is that a lot has been done, and done right, but major challenges remain. The telecom sector is too important to Europe’s economy “not to be regulated well,” he said.
Regulatory officers from several telcos generally praised the thoroughness of the EC report but said it’s overly optimistic. The headline “implementation report” is wrong, said Felix Mueller, BT Germany dir.-regulation & competition law. It should read “nonimplementation,” he said. Germany doesn’t have a transposition problem, he said -- it “is the transposition problem” because the legislature determines what the national telecom regulator does. Moreover, he said, there are 500 appeals in interconnection disputes languishing in German courts. The legislature has tried to address the problem by creating a specialized body to handle the challenges, Mueller said, but so far all it has done is cut the appeal process time from 6 years to 3.
The EC’s effort to balance the telecom sector’s perception of their markets against the masses of detail included in the implementation report may have gotten tipped in the wrong direction, said Caroline de Cock, COLT Telecom dir.-EU regulatory affairs. All the key words are in the report, she said, but not in the “rosy picture” set out in the first 8 pages, which policy-makers are most likely to read.
Panelists also said the report should have included: (1) Discussion of whether the EC is pursuing integration of the markets at a pan-European level, and an examination of current markets and competition across Europe. (2) A more forward-looking approach that links what’s been learned from the past with what could be done in the future.
The e-communications package requires national regulatory authorities (NRAs) to analyze as quickly as possible 18 different markets to determine if they're ripe for ex ante (sector specific) regulation. But several speakers cited patchy compliance, and Rodford was asked what the EC plans to do to force NRAs to complete the reviews. The implementation report contains a “hefty” section naming names on which member states have done what on the reviews, he said. The Commission has fired off administrative letters urging NRAs to give serious consideration to reviewing the more serious, “meaty” markets, he said, but that may be the only action it can take. EC lawyers have ruled that the infringement process -- which can ultimately lead to litigation in the European Court of Justice -- is probably not available to force reviews, Rodford said.