Civil liberties and consumer groups lobbying the EU on Information Society issues are hampered by lack of money and access, observers said. On matters from privacy to digital rights to intellectual property (IP), these groups - part of “civil society” -- find it hard to compete with industry for lawmaker, govt. and Eurocrat attention, they said. Telecom sector lobbyists seem generally satisfied with the process’s transparency (CD Jan 25 p9), but rights advocates said the system has grave problems current reform efforts won’t fix.
Deutsche Telekom (DT) rivals challenged a govt. claim that the incumbent may be entitled to a regulatory break as an incentive to rolling out a new fiber VDSL network. In a paper handed to politicians and govt. officials, the German Competitive Carriers Assn. (VATM) called economically unsound a Ministry of Economic Affairs (BMWi) statement that natural monopolies and bottlenecks are “virtually characteristic for the telco market,” and that “temporary monopoly positions represent a key element in dynamic processes of competition” (CD Jan 11 p11). Temporary monopolies represent a “significant element of dynamic competition processes” only if they're not based on historic monopoly structures, the VATM said: If they are, the bottlenecks are permanent and deregulation would only breathe new life into the monopoly. Extending the regulatory holiday to new DT service offerings or products or new markets will create more permanent monopolies, it said. BMWi’s paper, filed in the European Commission’s (EC’s) review of the new e-communications regulatory framework (NRF), also fails to take into account the “proven connection” between effective regulation, the level of competition and total investment in the telecom sector, VATM wrote. DT’s push for a regulatory moratorium on its new network appears to be opposed by most of Europe’s telecom sector, (CD Dec 2 p8). This week, Information Society & Media Comr. Viviane Reding, speaking at Digital Lifestyle Day 2006 in Munich, said Europe needs a “political triple-play” to allow its digital economy to catch up to competitors. Reding said Europe has a “unique responsibility” to ensure that its regulatory framework encourages as much investment as possible. However, she said, “that can, in my view, not mean that regulators except those who build such networks from the rules which guarantee effective competition. I believe in innovative business models, but not in so-called ‘natural monopolies’.” Reding said she hopes the German govt. doesn’t “give in to the pressure to find unilaterally a solution at national level which could only yield benefits at national level in the short term, but would create fundamental problems, both at national level and EU-wide, in the long run.” The BMWi paper seeks to change Germany’s telecom laws as well as to influence thinking on the NRF review, Swidler attorney Axel Spies said on VTAM’s behalf. In a Dec. filing with the U.S. Trade Representative (USTR), the U.S. Council for International Business said Germany’s telecom regulator, BNetZa, “continues to be subject to inappropriate political pressure” from the govt. If BNetzA follows the govt.’s request and refrains from regulating access to DT’s new fiber network, it could violate World Trade Organization rules, Comptel told the USTR.
With a Jan. 31 end looming for the first phase of a consultation on whether to revise Europe’s e- communications regulatory scheme, lobbying groups are scurrying to weigh in. The review has huge import for telecom, and Brussels’ growing trade in lobbying has some observers fearful of a system growing “Americanized” as high-profile issues have stacks of Euros thrown at them. Some want tighter lobbying rules. Telecom lobbyists said they're just getting more savvy, and they welcome efforts to curb abuses.
Openreach, a British Telecom (BT) unit created to give rivals equal access to its network, launches today (Wed.). Openreach will provide a “first mile” of connections, fiber and wiring linking millions of residential and commercial users to communications providers’ networks through BT local exchanges, the telco said. The new division results from a deal with the Office of Communications (Ofcom), which used the cudgel of an antitrust probe to persuade the incumbent to play fair with competitors. U.K. alternative telcos said time will tell if Openreach can achieve that goal.
German alternative telcos reacted furiously Tues. to a document hinting the govt. may move away from regulating Deutsche Telekom (DT). In comments filed in a European Commission (EC) consultation on review of the new telecom regulatory framework (NRF), the Ministry of Economic Affairs (BMWi) said the European Union is wrong to equate effective competition with absence of market power. “This could lead to the conclusion that the primary goal of regulation is the removal of extensive market power. This creates a danger of inefficient and excessive regulation, as natural monopolies and bottleneck positions are virtually characteristic for the telco market, and temporary monopoly positions represent a key element in dynamic processes of competition,” BMWi said. It urged the EC, when revising the NRF, to devise a “feasible concept” for whether and how to regulate in new markets, “especially with a view to encouraging innovations and investments.” DT rivals “are very concerned that this paper is the beginning of a change in strategy in Germany, away from regulating the ex-monopolist,” Swidler Berlin lawyer Axel Spies said on behalf of the German Competitive Carriers Assn. (VATM). Easing regulatory checks and balances even for a limited time would devastate DT’s competition in the broadband and other emerging sectors, he said. It would let DT “occupy new market sectors unchecked, pushing the competitors out of those sectors, which will devaluate the billions and billions of euro” they've already spent on infrastructure and new services, and discourage foreign investment. Germany lags behind other European countries in regulatory efficiency and broadband investment, according to the European Competitive Telecom Assn (ECTA). In Dec., the organization said studies show regulation spurs investment, and it pointed to low investment in Germany, “where the incumbent has maintained a strong grip and the regulatory environment is weak” (CD Dec 2 p8). DT has been pushing a regulatory “moratorium” on fiber VDSL deployment, something German telecom regulator BNetzA said last month it wouldn’t approve (CD Dec 27 p6). But the govt.’s apparent swing toward regulatory holidays for dominant players has competitors up in arms. If rules are lifted, Spies said, it will pit Germany against other member states, undermining efforts to harmonize European telecom. VATM also questioned BMWi’s reliance on a 2004 U.S. Supreme Court case, Verizon v. Trinko, in concluding temporary monopolies are needed to obtain dynamic competition. Trinko dealt with antitrust law’s role in a regulated telecom environment, not with whether to maintain preemptive regulation in markets not yet found to have effective competition, Spies said. In its paper, BMWi recommended use of benchmarking, cost-benefit analyses and other tools to monitor the effectiveness of rules and their enabling laws at the national and European level. Competition among regulatory models would enable nations to find more successful schemes sooner and junk less-effective ones more quickly, the govt. said.
Network and data security, including squelching spam, will be a key European issue this year. Austria, which took the European Presidency Jan. 1, listed spam among 4 telecom areas on which it will focus. Austria and Finland, to head the Presidency as of July, said they'll pay “particular attention” to beefier network security. EU presidencies rotate every 6 months.
France’s data protection agency completed rules to help U.S.-listed companies, including communications services providers, comply with the anonymous whistleblower requirements of the Sarbanes-Oxley Act while respecting French privacy laws. The Dec. guidelines from the Commission nationale de l'informatique et des libertes (CNIL) appear to signal a “serious effort to compromise and accommodate the goals” of the U.S. law, said Alan Raul, an attorney with Sidley Austin Brown & Wood LLP. Nevertheless, multinationals eyeing whistleblower hotlines still face a patchwork of European data protection laws, said Axel Spies, a European attorney with Swidler Berlin.
With several major U.S. and Canadian MSOs starting or expanding their VoIP rollouts in the fall, the cable industry’s IP telephony customer count easily surged past 2.5 million as 2005 drew to an end. At the same time, total N. American cable telephony subscribers, including those served by either circuit-switched or VoIP technology, passed the 5 million mark, according to the latest statistics from Kinetic Strategies Inc.
German telecom regulator BNetzA’s decision to regulate bitstream access as part of the wholesale broadband access market won approval from the European Commission (EC) and wary praise from Deutsche Telekom (DT) rivals. At first BNetzA sought to carve bitstream, or VDSL, from the market definition, a move DT sought. The incumbent, which plans to spend several billion euro deploying a fiber network to replace copper lines, asked BNetzA to deregulate wholesale and subscriber prices on fiber lines. Competitors said they'll wait to see how BNetzA ensures the access they need.
The European Parliament (EP) Wed. resoundingly voted to require Internet and phone call traffic data storage, a move that may be challenged at the European Union (EU) or national level. By 387-197, with 30 abstentions, lawmakers agreed to the controversial data retention directive at first reading, as the U.K. Presidency wanted. The vote was seen by many as a victory for the EP, which has been angling to strengthen its role in European decision-making.