INTUG Submits Document to EC with Regard to Framework Review

INTUG has sent a letter to the EC concerning the Review of the European Regulatory Framework. The Users Group believes that the current Review provides an opportunity to enhance the effectiveness of sector specific telecommunications regulation.

In a comprehensive, 4-page document INTUG provides its views on the regulation it deems necessary to ensure that enterprise users can contribute to economic growth and productivity in the EU most effectively and a truly pan-European telecommunications market can emerge.

Whereas the Commission has acknowledged that the lack of progress to date reflects lack of full exploitation of the capabilities of ICT by European enterprises, INTUG believes that this lost opportunity is due to the lack of a single telecommunications market. The current environment, whilst exhibiting encouraging signs of growing competition in some markets at EU member state level, still fails to provide an environment for seamless pan-European services, which is a prerequisite to achieving the i2010 Lisbon goals for improved EU productivity and growth.

The key to achieving these goals is telecommunications regulation, which, via a process of appropriate and proportionate application, encourages investment and innovation in services for consumers and enterprises at member state and at EU level. The needs of these 4 market segments – member state and pan-European, for consumer and enterprise – are not identical. Changes in the regulation of international roaming charges recognized that competition on the level of member states overlooks the absence of pan-EU competition.

Despite widespread availability of international leased lines within the EU, significantly slower growth in EU transborder business services, compared with physical goods, demonstrates that the current EU telecommunications environment remains a major obstacle to transborder enterprise services. These require not just transit level connectivity, but also competitive access.

ICT exploitation by pan-European enterprises depends on availability of consistent seamless telecommunications access. Access is provided mainly at domestic/local level, but it is a critical input to pan-European systems.

INTUG strongly supports the proposed remedy for NRAs of functional separation. When separation is imposed and equivalence of input is enforced, this remedy will ensure availability of access to wholesale products throughout the EU, regardless of service provider location.

In addition, INTUG supports a Commission veto for NRA remedies, which do not address obstacles to the creation of a single telecommunications market.

The active programs in many member states for next generation network (NGN) implementation by the incumbent will also have a potential impact on competition, if the regulations are not sufficient. Unbundled access in some form is vital to a competitive access market, as is the obligation for standards-based interoperability.

Non-binding general ERG papers, or Commission recommendations that get diluted by ministerial comitology, have proved inadequate to achieve the required aims. An effective mechanism for ensuring that national regulation is effective in achieving EU aims must be found, either through making the ERG more effective, or through some other organizational mechanism.

Ex-ante regulation seeks to promote competition where it will not naturally occur (the three criteria test) and is thus more effective and appropriate to the telecommunications market than ex-post regulation which only punishes anti-competitive behavior, often long after the event, when the damage is done. Infringement proceedings and competition law have not proved to be credible alternatives to a veto, but the Competition Directorate should be asked to use its experience of designing remedies in reviewing regulatory proposals.

NRAs need the tools to enable them to implement faster and more effective remedies in a manner, which is appropriate to the national market, but aligned with the need for a more harmonized single EU telecommunications market.

In conclusion, INTUG believes that the review of the European Framework for telecommunications regulation should result in key step changes to ensure that the needs of the European economy for productivity and growth can be met.

The document is available in the documents archive.

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Source: INTUG

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