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EU Telecom Overhaul One Step Closer

Europe’s electronic communications sector is currently governed by directives adopted in 2002. These stipulated that the directives and regulatory framework should be reviewed, a processed initialised in November 2007. Both the European Council and the European Parliament need to adopt the proposed changes, and none of the initial consultations conducted by the EC indicated that a major overhaul was on the cards, or even required. Yet this is what has transpired.

After two years of wrangling the European Parliament has finally approved the telecoms reform package (championed from the outset by the EU Telecoms Commissioner Viviane Reding) which promises to deliver a range of fundamental changes. Many of these changes will be appreciated by privacy- and cost-conscious consumers, while for a number of operators they will spell lower revenue in coming years. Operators, particularly in the mobile market, have had to bear a host similar measures in recent years, including tariff controls on mobile termination rates (MTRs), and voice and data roaming. The new measures go far beyond tariff controls.

The package includes an extensive overhaul of European telecoms legislation, including the creation of a new European body of telecom regulators (BEREC—the Body of European Regulators for Electronic Communications) charged with bringing down prices for consumers and penalising anti-competitive behaviour. It also provides the right of individual national regulators (NRAs) to impose functional separation on those incumbent operators which are deemed (by their market size as well as behaviour) to restrict competition.

The telecoms reform enters into force next month and grants Member States until May 2011 to incorporate regulations into their national telecoms laws.

In many respects the package is geared towards consumer rights, particularly its focus on reducing the time taken for operators to port mobile phone numbers, its measures to respect consumer privacy, and the principal that consumers cannot have their Internet connection cut off for downloading files illegally without a full hearing (the basis for this—considerations of terrorism or other major concerns aside—is that consumer rights to the Internet are widely considered a given, whereas the qualms of movie studios and record executives can be appeased through other processes). Several EU States (Finland and Spain in particular) have already or are in the process of legislating broadband as a Universal Service, so cutting off access would be as profound as terminating connections to the telephone or electricity grid.

Some measures did not pass muster: the proposed creation of a European Electronic Communications Market Authority EECMA (which would have absorbed the ENISA) was amended in September 2008 and finally dropped, in favour of BEREC, while issues relating to spectrum management and additional harmonisation powers for the EC were watered down. Nevertheless, harmonised radio spectrum management across the EU, especially considering the switchover from analogue to digital TV by 2012, is a fundamental policy of the reform package.

By Paul Budde, Managing Director of Paul Budde Communication

Paul is also a contributor of the Paul Budde Communication blog located here.

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