EU proposes extended regulation for new telecom markets

The European Union announced new rules to force national telecommunications regulators in the European Union to ensure healthy competition in a wide range of telecommunications and Internet markets on Wednesday.

“The message we want to send to the markets today is our desire to promote and secure investments in networks and technologies,” EU Enterprise Commissioner Erkki Liikanen said in statement.

The aim is to ensure that former telecommunications monopolies, which traditionally were very close to national regulators, don’t prevent rivals from competing in sectors such as high speed Internet access and mobile phone services, commissioners Mario Monti and Erkki Liikanen said at a press conference.

“Sector-specific intervention is indispensable, in particular for the development of broadband (Internet) access,” said Monti, the commissioner for competition, adding that this market is still dominated by the incumbent operators. He said that normal competition rules will also apply to the 18 markets singled out for special scrutiny.

Liikanen said the new rules will not discriminate between different distribution channels, so that once alternatives to phone lines, such as cable and satellite connections, start to offer customers a comparable service, then they too will be regulated by the new codes.

Once there is evidence that healthy competition does exist in these markets, the sector-specific rules will be lifted, the commissioners said.

National regulatory authorities (NRAs) will have to scrutinize the conduct of mobile phone operators to ensure that they do not collude to push up the cost of calls and the separate cost of ending phone calls, they said. The commission is already investigating so-called roaming charges, which are added to a customer’s bill if the person makes a mobile phone call outside of his own phone operator’s territory.

If the NRAs fail to prevent operators from colluding to keep the prices artificially high then the European Commission will take legal action against them, Monti said. Likewise, if the NRAs set prices in these sectors at an artificially low level, in a way that could deter competitors from entering the market, the commission will also act against the NRAs, he added.

SMS messaging from one mobile phone to another is excluded from the special rules, the commission said.

“The new legal framework will stimulate new investment in communications networks and services, by both new entrants and existing operators,” Liikanen said.

The new rules were grudgingly accepted by former telecom monopolies. “We didn’t believe broadband should have been included (in the rules), because of the high risk and the large investment that new market entails,” said Brooks Tigner, spokesman for ETNO, a trade group representing incumbent operators.

But he added that “since broadband is included, we prefer that it is dealt with in a technology-neutral way.” Several geographical markets already have well-developed cable infrastructures, such as Belgium, the Netherlands and Denmark. The new rules will apply to cable operators as well as telecommunications operators in those markets, he said.