Reject Deutsche Telekom Regulatory Moratorium, ECTA Says
BRUSSELS -- European telecom has a “stark choice” -- regulation or stagnation, the European Competitive Telecom Assn. (ECTA) said Thurs. Investment suffers when regulators don’t tackle dominant firms, while nations that open markets to competition have “stormed ahead,” ECTA said at its 6th annual regulatory conference here. Its 2005 regulatory scorecard’s findings reinforce calls to spurn the sort of “regulatory holiday” on fiber Germans are debating.
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ECTA’s 3rd scorecard drew on responses to a survey on the effectiveness of the national regulatory system and dispute resolution body, general market access conditions, and application of competition remedies in the narrowband voice, mobile, broadband and business services markets. It examined 16 European Union countries.
An imminent e-communications regulatory framework (NRF) ought to bring a comparable regulatory environment across Europe, but won’t, said SPC Network dir. Richard Cadman, who coauthored the study with law firm Jones Day. Scores keep showing wide disparities, with Germany and Greece down low and the U.K. on top. They haven’t changed much, Cadman, said, though beefed-up regulation has lifted France much higher on the list. Newer EU members tend to sink. “No country can afford to be complacent,” he said.
Repeating conclusions in earlier versions, the study said investment occurs where regulation effectively spurs competition, Cadman said. Former incumbents often refuse to invest in infrastructure if they believe too much regulation will cut return on investment, said ECTA Managing Dir. Roger Wilson. ECTA data show the opposite is true, he said.
Europe is at an important crossroad with the 2006 NRF review, Wilson said. Regulators can enforce implementation of the framework or heed dominant telcos’ “siren voices” as they vow to invest more -- if regulations are scrapped.
The sole siren voice now belongs to Deutsche Telekom (DT), which wants a regulatory moratorium on fiber VDSL deployment. The concept was broached in recent months by Information Society & Media Comr. Viviane Reding, whose spokesman said “very intense discussions” are underway at DT’s request. The EC expects the NRF to be respected as long as and to the extent it’s in place, the spokesman said. It’s approaching NRF review with an open mind but notes that existing rules clearly apply to such things as DT’s request for a moratorium. One NRF goal is to phase out regulation where no longer needed, but the EC isn’t convinced the time is right, he said.
Asked why DT’s so far unique bid unsettles competitive telcos, Wilson said with Germany Europe’s largest telecom market, DT’s request is dangerous to ignore. This is “a fight that needs to be had right now,” he said. The view that DT needs a regulatory break to upgrade infrastructure dating to its monopoly days is a big issue in Germany, said Christof Sommerberg, reg. mgr. of Cologne-based QSC. It’s also a political issue of “pure industrial favoritism.”
A wrecked German telecom market would kill chances of pan-European service, said Andrew Tarrant, British Telecom head of govt. services. That in turn would undo the Lisbon agenda goal of making Europe the world’s most competitive knowledge economy by 2010.