Wednesday, November 15, 2006

European Commission's Viviane Reding Outlines Telecom Policy Options

"The liberalisation of telecoms markets in Europe has been a success story," said Viviane Reding,
Member of the European Commission responsible for Information Society and Media, speaking at the ECTA Conference in Brussels. Europe currently has hundreds of operators offering fixed and wireless networks and services. About 94% of the population is equipped with mobile handsets and consumers spend about 30% less on their bills, for the same services, compared to 1996. Broadband, the key to a knowledge-based society, has been picking up very rapidly. The number of broadband lines in the EU grew by over 40% from July 2005 to July 2006 and has now exceeded almost 70 million lines.

She also said the EU legislative environment, by its pro-competitive stance, is encouraging innovation and stimulating investment by both new entrants and incumbent operators.

Reding argued that EU member that have fully implemented the EU's regulatory framework for electronic communications have fared the best. She believes the EU should stick with a market-based approach to ex-ante regulation and technological neutrality. She wants European regulators to pursue three new objectives:

  • More flexible and efficient use of spectrum. Some ideas include make more spectrum available on a pan-European basis; strengthening the use of the principles of technological neutrality and service neutrality in spectrum allocation; introducing spectrum trading across the EU in selected bands agreed at EU level; and achieving common authorisations for services having a pan-European dimension.

    Instead of having one single regime for spectrum management and spectrum licensing, as in the US, Europe has at least 25 different systems. Redding advocates the idea of a European spectrum agency or the integration of spectrum into the mandate of a possible future EU telecom authority.

  • Less - but more focused and more efficient -- regulation. The EU needs greater consistency and effectiveness in the application of remedies to repair the fragmentation of its internal market. One possible option is to extend the internal market-control that is already exercised today by the Commission with regard to market analyses also to the remedies.

  • Promote competition and investment in the markets, and in particular in trans-national markets and for cross-border services. Reding concludes that that the most significant factor enabling broadband growth is the existence of alternative infrastructures, in particular cable. In all six Member States which have exceeded 20% broadband penetration, cable has an important market share and this regardless of the effectiveness of regulation. She also dismissed the idea of "regulatory holidays" being promoted by certain incumbent telecom operators as a means of encouraging them to make "risky" investments in infrastructure.

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