European Commission to Announce Plan to Spur Convergence

Since ETNO members are former incumbents, regulation isn’t high on their priority lists. Many wonder what policy-makers and regulators want from them, said KPN Royal Dutch Telecom CEO Ad Scheepbouwer. Telcos always hear data and communication technologies are critical to European growth, he said, but face rules dating to the last century. Incumbents no longer enjoy advantages because they own fixed-line networks, he said. Current telephony rules shouldn’t apply to Internet Protocol technologies; there should be no a priori regulation of NGNs, Scheepbouwer said.

Regulators should tailor competition remedies to their specific national situations, urged Telekom Polska CEO Marek Josefiak. Central and Eastern European (CEE) telcos need a different regulatory approach than western EU states, he said. Former Communist countries may appreciate the market-driven economy more than their counterparts in the West, but regulators can’t ignore the differences between old and new member states, particularly with regard to infrastructure, Josefiak said.

Instead of applying forward-looking approaches to new and emerging markets, CEE regulators favor solutions already used in and better suited to - older, more developed markets, Josefiak said. Strict regulation, especially if brought to bear before competitive problems surface, must be shown to be appropriate and necessary, he said.

CEE countries’ service markets have high unemployment and a low ratio of fixed lines per inhabitant, so incumbents need incentives to invest, Josefiak said. One potent growth area for fixed-line incumbents is to create converged networks, but those are subject to strict regulation. Josefiak said he'd rather see a less- regulated fixed-line market than regulation of mobile markets.

Regulators are uncertain about how standard regulatory objectives apply to NGNs, said Peter Scott, Information Society & Media Directorate-Gen. head of e- communications networks and services. An information gap divides government - policy-makers and regulators, who often don’t know what NGNs are - from operators, who design NGNs without knowing the relevant policy and regulatory requirements, he said.

This year the EC begins a review of its e- communications regulatory framework, but it’s unclear whether the Commission will rethink the regulatory structure or merely tinker. Since all 25 EU states haven’t worked the framework into national law, the EC may avoid major changes, ETNO Dir. Michael Bartholomew said later. But ETNO chiefs, who think the framework isn’t working, want more than minor changes, he added. Telcos are willing to invest in i2010, he said, but need more regulatory certainty.

Alternative telcos argued Tues. that incumbents shouldn’t be allowed to invest in NGN networks, forestalling competition for years to come. The “real risk is that, if incumbents can escape regulation by upgrading their core networks to reflect efficient modern technology already used by many other operators, competition will be irreparably damaged and, as a result, future investment by both incumbents and market entrants will be jeopardized,” said the European Competitive Telecom Assn.

An impending EC telecom traffic data retention proposal will give the European Parliament (EP) a voice in the legislative process and require an assessment of data retention’s impact on the telecom industry, Reding said. The commissioner said she opposed the idea of a purely intergovernmental data retention agreement originally floated by 4 member states. She called it an internal market matter requiring European Union-wide harmonization and the guarantee of fair competition, including a consideration of the cost to industry.

ETNO members always have cooperated with law enforcement agencies acting under warrants, Bartholomew said later. However, they oppose “willy-nilly interference” with traffic data because it raises privacy and cost issues. ETNO is glad the debate has been reopened in a more sensible fashion, Bartholomew said.