EU proposes major overhaul of telecoms, plans to create single European market

14 Nov 2007

The European Commission today announced new proposals designed to overhaul the region’s telecoms sector and establish a single, open EU market managed by a new super regulator. The plans unveiled by EU telecoms commissioner Viviane Reding are intended to streamline EU telecoms regulations by implementing a uniform regime in all 27 member states, including the controversial ‘functional separation’ policy which would empower national regulators to force dominant incumbents to separate their networks and services divisions if other measures to stimulate competition fail. Ms Reding told a news conference that the new plan ‘makes sense’ and that she was confident the reforms would be carried out by 2009, although she conceded that functional separation was ‘not a panacea’ and would need to be approved at an EU level should a national regulator wish to impose it.

Under the EC’s proposals, a new agency, The European Telecom Market Authority, would be created, made up of the directors of the 27 national telecoms regulators. The new body will advise the respective national regulatory authorities in an effort to ensure that directives and remedies are implemented uniformly, regardless of where problems arise. Thomson Financial reports The European Telecom Market Authority will replace the existing European Regulators Group, an independent body which groups all the member states’ telecoms regulators, and is expected to be less dependent on national governments, with Ms Reding saying ‘dominant telecoms operators [are] often still protected by government authorities … this restricts consumers’ freedom of choice’.

Axel Spies, on behalf of the German Competitive Carriers Association VATM, said, ‘The VATM is against the planned EU regulatory authority: creating a new level of EU bureaucracy undermines the goal that the EU Member States themselves should provide efficient regulation. Strengthening the EC’s veto rights would be a much better strategy. The competitors in Germany also strongly reject the EC’s plans to cut the regulated market sectors from 18 to seven. Only a few weeks ago, the EC had stated that there is no sustainable competition in the markets where now the EC wants to lift ex ante price control. The EC is changing its course by 180 degrees. The plan will endanger competition and lead to job losses.’