EC Seeks Veto Power over National Telecom Decisions

The EC has been reviewing the 2002 e-communications regulatory framework for years, with final recommendations for changes expected in late October or early November. The draft proposals are being vetted internally. Technological and market conditions and lack of a single European telecom market demand “substantial reform” of the framework, the EC said a draft summary of its recommendations.

Existing rules require national regulators to analyze 18 separate markets for potential competition problems, with notice to the EC of proposed fixes. The EC said in 2006 it wanted to simplify the notification procedures and remove most retail markets from the list. Now, it said, “a first substantial deregulation of the sector is possible.” The draft proposed dropping the number of markets to be analyzed from 18 to eight, with only one at retail the public telephone network at a fixed location for residential and non-residential customers. Incumbents welcomed the reduction; new players, consumers and some NRAs were “more cautious,” the EC said.

The seven wholesale markets expected to remain subject to regulation are call origination on the public telephone network provided at a fixed location; call termination on individual public telephone networks provided at a fixed location; wholesale network infrastructure access for the purpose of providing broadband and/or voice services at a fixed location; wholesale broadband access for the purpose of providing broadband services at a fixed location; wholesale terminating segments of leased lines; access and call origination on mobile public telephone networks; and voice call termination on individual mobile networks.

The draft offers the possibility of regulators being able to order functional separation of a provider, splitting its infrastructure from its service division. That notion, in discussion for some time, has sparked intense debate between alternative providers who strongly back the idea (CD Sept 5 p8) and incumbents who just as vehemently oppose it.

Legislative proposals for spectrum reform include the creation of a mechanism for pan-EU secondary trading rights and provisions to encourage license-free spectrum use.

New Regulatory Structure

Europe’s single e-communications market is hampered by its 27 national regulatory bodies, the EC draft said. To compensate, the commission has toyed with various ideas, including putting itself in charge of regulatory decisions, giving more regulatory clout to the European Regulators Group (ERG), an advisory group made up of NRAs, or creating a new entity to deal with competition issues.

The draft would set up an independent advisory unit, the European Electronic Communications Market Authority, which would replace the ERG and be accountable to the European Parliament. At the same time, the EC said, it intends to grant itself what amounts to veto power over mandates imposed by NRAs, and to harmonize cost-accounting methods, number portability, consumer protection and accessibility to e-communications services and equipment by people with disabilities, among other things. Most member nations and new entrants support stronger enforcement powers for NRAs, a move incumbents and mobile operators oppose, the commission said.

Consumer Protection, Privacy Measures

The draft proposes a mandate that providers more clearly inform customers about rates and supply terms, and give fixed and mobile operators one day to port phone numbers to new providers. It seeks to improve use of the 112 emergency services number by ensuring better access to caller location information. The commission wants NRAs to be able to set minimum quality-of-service requirements based on pan-EU standards, it said.

A main goal of the regulatory framework is to protect people’s personal data and privacy and to ensure network security, the draft said. The recommendations include a proposal to require that consumers be notified if personal data have been compromised as a result of a network breach.

The EC proposed to give operators and NRAs more responsibility for e-communications network and service security and integrity; strengthen anti-spam enforcement powers; and clarify how EU rules apply to data collection and identification devices using public electronic communications networks.

Public consultation have found EU states “cautiously supportive” of these proposals, though several operators and service providers worry about their cost, the EC said. Consumer advocates favor the recommendations, but data protection authorities want tougher measures, it said.