EU Telecom Regulatory Framework Seriously Flawed, Finn Says
BARCELONA -- Europe’s e-communications regulatory goals are valid but implementation and results of the new regulatory framework (NRF) are “unsatisfactory,” Finland’s regulator said here Tues. Saying the framework has major problems, FICORA Deputy Dir. Martin Andersson urged the European Commission (EC) to fix them. The Commission is reviewing its framework, with a report due mid-2006 on its effectiveness, an official said at the European Electronic Communications Regulatory Forum here Wed.
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Andersson outlined 3 key problems with the NRF. About 12 European Union member states have yet to adopt it into their national laws, so there’s no harmonized European market. Incumbents benefit from slow implementation, but new entrants suffer, he said; the NRF isn’t simple and deregulation hasn’t happened. To the contrary, Andersson said: The new rules widen the number of markets that must be analyzed for evidence of significant market power (SMP) from 3 to 18, a headache for national regulatory authorities. FICORA has had to advise the EC of all SMP decisions even if they concern only small local operators with limited operating areas, he said. That has sparked more appeals and court filings from operators. FICORA has had to deal with 13 appeals of SMP decisions; Swedish operators are challenging nearly every one, Andersson said.
The NRF also lacks technological neutrality, Andersson said. The universal service obligation affects only the public switched telephone network, not IP networks or VoIP. But should cable TV networks be regulated? What about broadcasting in IP networks? he asked. Regulation of VoIP is a hot issue, Andersson said, but a recent European Regulators Group (ERG) statement calling for a light touch isn’t binding and is “somewhat blurred,” he said. Regulators need clear, common rules at least on emergency calls, numbering and which interconnection rules should cover VoIP services, he said.
The EC should revise the NRF, Andersson said: (1) Cut back on sector-specific (ex ante) regulation except where bottlenecks exist, and focus on what’s essential for competition. (2) Broaden the universal service directive’s scope to cover mobile telephony and VoIP. (3) Revise must-carry rules to cover only public service broadcasting. Andersson urged regulators and operators to raise awareness of information security problems mobile networks could create.
The EC expects to launch a consultation on the scope of the universal service obligation, especially in the broadband and mobile areas, in early May, said Peter Scott, head of policy development, EC Information Society & Media Directorate-Gen. At year’s end, the EC will consult on whether to revise its recommendations on the relevant markets for analysis, with a report due in mid- 2006 on how the NRF is working. A revamped framework could be ready for adoption into national laws by 2006, he said.
The European system of regulation “isn’t too bad,” said Martin Cave, dir. of the Center for Management Under Regulation at Warwick (U.K.) Business School. Compared to the U.S. telecom regulatory structure -- which an earlier speaker had apparently described as a “lower circle of Hell” -- the NRF is “slouching toward Bethlehem,” he said. The NRF approach is economically consistent, he said, noting that big changes loom in the form of the switch to VoIP and the convergence of fixed and mobile voice services. The NRF can deal with those changes because its creates the kind of conditions in which consumers can “exercise their sovereignty,” he said.
Cave was asked what single challenge regulators should focus on in the next 1-3 years, and what potential failure they must avoid. He said the key problem is to prevent European narrowband incumbents from translating their market position into the broadband arena. If that doesn’t happen, he said, we could see the “euthanasia of the regulator.”
The conference continues today (Thurs.).