Competition in Europe’s internal telecommunications market is imp...

on how well so-called Article 7 procedures for gauging and ensuring competition in national markets is working, shows the “glass is at least half full,” a spokesman for Information Society and Media Commissioner Viviane Reding said. While national regulatory authority (NRA) analyses are more consistent as to competitiveness in their markets, they do not impose more uniform remedies in cases of significant market power, which keeps the cross-border market from reaching its potential, the EC said. Under Article 7 NRAs must assess 18 different markets, then report to the commission on their findings and propose any pertinent remedies. The 600-plus notifications received show that remedies do not always work as well as they could and that regulation varies by nation, even when market circumstances are similar, the report said. It noted areas of concern. In the retail fixed access market, involving connection to a fixed telephony network enabling calls and related services, some NRAs failed to mandate cost accounting and accounting separation, complicating efforts to set effective price regulation for related wholesale products and to monitor compliance. Wholesale line rental conditions vary across borders, and are not alway justified by diverging market conditions, the report said. In the fixed and mobile termination markets a large spread persists in average mobile termination rates; some regulators have allowed small operators to charge more, perhaps discouraging them from seeking more market share, the EC said. In the wholesale broadband markets for bitstream access and local loop unbundling, the high cost of duplicating the last mile of publicly switched phone networks means former monopolists retain a very strong position in the market for unbundled access, the report said. Retail call markets are noticeably more competitive now across the European Union, it said, urging NRAs to stress wholesale regulatory enforcement to make retail rules unnecessary. The wholesale mobile access and call origination market, generally deemed competitive, needs study to see if competition through mobile virtual operator networks suffices, the EC said. The report laid out “horizontal issues,” some to be addressed in the October NRF review. Experience since the NRF took effect in 2003 shows a need to streamline Article 7 procedures for cooperation between the EC and national regulators, the report said. And while the European Regulators Group (ERG) continues to work with the EC cooperatively, and NRAs admit the remedies they impose lack consistency, regulatory guidelines “aren’t coming in time,” Reding’s spokesman said. The issue of which entity should be the “EU FCC,” authorized to impose and enforce competition remedies, is expected to loom in the coming NRF reform. The EC recently nominated itself for the job (CD June 1 p6). The revised NRF framework is not expected to take force before 2009 or 2010, the report said. Meanwhile, the EC will adopt a new version of its recommendation on relevant markets to be analyzed and Article 7 procedures later this year, it said.