Reding calls for action on EU telecoms market

National governments are still dragging their feet when it comes to opening up EU telecoms markets, Viviane Reding warned on Thursday.

The Luxembourg media commissioner said that the commission’s annual assessment of competition in telecoms markets showed that consumers had more choice than ever before – but that there was still room for improvement.

“The opening of telecom markets to competition is certainly one of the EU’s success stories as can be seen by the downward trend in tariffs and better services,” Reding said.

But she added that “while 2.3 per cent growth of the sector and five per cent additional investment are good, they are not good enough in times when Europe’s competitiveness is a stake”.

Reding was presenting the 12th annual assessment of the telecoms market, and as as usual she focused primarily on the delays at member state level in implementing changes.

“This year’s reform of the EU’s telecom rules must focus regulation on those key bottlenecks where competition is still not effective,” she said.

This, she said, was vital in a section of European industry where rapid technological developments were commonplace – and which generated a healthy €290bn in revenues for EU companies.

Broadband access came in for particular criticism, with take up rates in 2006 ranging from a mere three per cent in Greece and Slovakia to near 30 per cent in Denmark and the Netherlands.

“We have a situation where some countries are world leaders and others are among the world’s worst performers, all in the same continent,” Reding told journalists.

“I appeal to the member states where there is a catastrophe in broadband to find solutions. We cannot have a knowledge-based society if large parts of that society have no high-speed internet access.”

She said that the reform of the EU telecoms rules, which will begin this summer and come into force in 2010, could include the option of “functional separation”, which would allow national regulators to oblige incumbent operators to split their network and service operations.

“We are thinking of introducing this as a tool in the toolbox for national regulators to use, and it is true that the British model created by Ofcom has inspired us.”

Powerful incumbents such as France Telecom have complained that any attempts by Brussels to impose functional separation would hamper, not improve, access to broadband services.

But Reding stressed that the commission “does not see functional separation as a panacea – simply that regulators should have it at their disposal.”

Another area where there is still room for improvement is mobile roaming – where Reding’s proposals are expected to be pushed through in time to offer travellers lower prices this summer.

But she stressed that suggestions from the European parliament that consumers should be allowed to “opt in” to lower roaming charges, rather than opt out, would not work.

“The figures show that almost everyone in the EU already has a mobile phone, and indeed some people have more than one.”

“An opt-in legislation would target only those relatively few people who do not already have a mobile phone and would not work.”

Reding said that there were three main problems that needed to be addressed: “Inconsistencies, inconsistencies, inconsistencies.”

These were due to the way in which the 27 national regulators patrolled the implementation of EU rules, she said.

“There have been severe delays in some countries caused by appeals brought against new regulations – up to six years in some cases.”

“This leads to legal uncertainty and no level playing field – but with the major telecoms companies in countries such as Sweden, Spain, France doing more than 40 per cent of their business in other EU countries, we need the internal market to function.”

The review of EU telecoms rules is expected to focus on new measures of removing these inconsistencies, she said, and refused to rule out the idea of “super-regulator”.

“I don’t want to abolish national regulators, they are the closest to their markets, but I do want them to function in a consistent way and apply the European framework consistently.”

“This means that somebody has to hold this framework together, and I am currently discussing who should do this with the European regulators group and my experts.”

“We have not yet decided if it will be the commission, a new European body or a combination of the two.”

Beefing up the power of the ERG is still seen as the most likely solution, however, with most member states opposed to giving greater power to Brussels.

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