‘Functional Separation’ Proposal Draws EU Lawmakers’ Opposition
EU lawmakers began debate Tuesday on counter-proposals to European Commission plans to revamp electronic- communications regulations. Reports by the European Parliament Industry, Research and Energy Committee take up EC proposals to change access, interconnection and authorization rules and create a new regulatory body. MEPs are expected to introduce many amendments next week, said German Socialist MEP Erika Mann. Some probably will seek to quash EC plans to let national regulators force dominant providers to split their infrastructure and services arms, a remedy known as functional separation, said a committee spokeswoman.
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The industry committee studied ways to make it easier investment in next-generation networks and plans for a Body of European Regulators in Telecoms to replace an EC proposal for a European Electronic Communications Market Authority, the spokeswoman said. French Socialist MEP Catherine Trautmann, author of a report on EC plans to revamp Europe’s telecommunications regulatory framework, wants periodic reviews of the system to see if it’s still needed to promote competition -- a recommendation Mann backs. Mann will call for a procedure clearly defining what to evaluate, under what conditions and terms, and how often, she told us.
Industry committee chairman Angelika Niebler of Germany and the European People’s Party/European Democrats said Niebler will file an amendment opposing the introduction of functional separation as a competitive tool for national regulators, the panel spokeswoman said.
A legislator’s willingness to raise the issue “shows there is a concern,” said a spokesman for the European Telecommunications Network Operators’ Association, which strongly opposes functional separation. Simply having the tool available to regulators creates uncertainties as companies prepare to invest in next-generation networks, he said. New entrants say regulators need the option of functional separation to spur broadband competition in existing and new networks (CD Nov 14/07 p4).
Trautmann’s report urges the EC to take better account of next-generation networks to ensure the widest possible access, the committee spokeswoman said. Mann told us she wants clearer rules for investment in new infrastructures, including precise conditions for alternative providers to gain access to the networks. She will propose giving them access starting from rollout of a next-generation network under either a sharing model, in which incumbents and their rivals share investment and risk, or a contract model in which new entrants pay incumbents for access, she said.
Next-generation networks are high-risk and expensive, and Trautmann is right to link talk of telecom regulatory changes to them, the ETNO spokesman said. Current rules simply can’t be adapted to new realities, he said.
The existing framework requires regulators to analyze specific markets for competition problems. If there are bottlenecks, regulators must impose preemptive regulation to resolve them. Mann wants to add a test to the existing three criteria for gauging a market’s competitiveness, she said. When two networks compete in a market, the EC should back off and let competition law govern antitrust issues, she said. The EC probably won’t agree, she said, because it wants three or more competitors in each market.
Spanish MEP Pilar del Castillo of the EPP/ED, drafter of the response to the EC proposal for a new e-communications market authority, proposed instead an independent advisory body of representatives of national regulatory agencies, BERT (CD April 24 p18). Mann said she wants BERT to do more than advise. The body also should have power to propose alternatives to a national regulator’s competition requirements, and the EC should have no role in it, she said.
Amendments will be considered June 3, the committee spokeswoman said. The committee votes June 16 on reports, with the first plenary reading in July, she said. Mann said she doesn’t expect opposition to the reports, merely differences of opinion on some points.