EU proposes radical telco market reform

The European Commission (EC) has today published its report into the competitive state of the telecommunications market in the region, calling for major changes to the radio spectrum allocation and regulation to create a single market out of 27 national telecoms markets in the European Union (EU).

In presenting the results of the consultation launched at the end of 2005 to the European Parliament today, European Telecoms Commissioner Viviane Reding said progress had been made in opening the continent's market to competition for the benefit of its citizens.

But the progress made so far is not enough she said, pointing to the fact that 10 per cent of EU citizens still have no broadband access at all.

"Dominant telecoms operators, often still protected by government authorities, remain in control of critical market segments, especially of the broadband market. This restricts consumers' freedom of choice," said Reding.

"This is why new consumer rights, a new dose of competition, an effective system of independent telecoms regulators, new investment into competitive infrastructures and more space for new wireless services are needed to put Europe's digital economy on track."

The report's main ideas that have been formally adopted in the report focus on attempts to equalise market dynamics.

Many former public monopolies that continue to dominate growing markets, in areas such as broadband internet access through the control exerted over local telecoms infrastructures could be threatened with separation of services and network operations, as BT voluntarily did in the UK.

Reding also outlined new regulatory plans to ensure widespread availability of wireless internet services, particularly because more spectrum will be needed to launch new broadcasting services, such as high-definition TV, that require greater bandwidth. And a 'New Deal' for radio spectrum allocation looks to anticipate the increased availability of bandwidth as a result of the analogue switch-off and move to digital TV.

The proposals include a market-based approach to accessing spectrum, allowing companies to decide how it should be used, lowering the barriers for access rights by making spectrum trading possible and introducing the concept of 'service neutrality,' where any service, like mobile TV for example, can access any frequency.

The other major part of the review addresses the problems caused in local interpretation of EU wide telecoms laws. The Commission proposed establishing a European Telecom Market Authority to help ensure important communication services (such as internet broadband access, data roaming, mobile phone usage on planes and ships and cross-border business services) are regulated more consistently across the 27 EU member states.

The European Telecom Market Authority will have oversight of the 27 national telecoms regulators, to ensure that they follow the same rules will more effectively combine the functions of the current European Regulators Group (ERG) and of the current European Network and Information Security Agency (ENISA).

But it is likely that when the formal proposal is sent to the Union's two lawmaking bodies, the European Parliament and the Council of national government ministers, it will be the subject of strong debate.

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