ECTA CHALLENGES REGULATORS TO GUARANTEE FIRM AND URGENT ANTI-COMPETITIVE ACTIONS DESPITE DELAY IN ADOPTION OF TELECOM FRAMEWORK

ECTA urges action against any regulatory holidays and protectionism with clear recommendations on fibre networks

Brussels, 7.05.09 – ECTA is confident that national telecom regulators already have in place the powers they need to guarantee Europe has the most competitive and open telecom market, despite the delay in approval of the Telecom Framework. In particular, the European pro-competition telecom group is looking at regulators to end or pre-empt any regulatory holidays for Next Generation Networks so that consumers can have a choice of provider for ultra high-speed broadband services.

Ilsa Godlovitch, Director Regulatory Affairs of ECTA, said: "The vote in the European Parliament may delay adoption of the package but it does not remove the need for firm and urgent action by regulators to make sure telecom markets are competitive. The most progressive regulators have already taken the necessary action to ensure open fibre networks despite the new Framework not yet being in place. What we are urging is that all other regulators do the same so that European businesses and consumers are amongst the first to experience the benefits of high speed broadband connectivity."

If and when adopted, the new Framework will make it legally binding to extend to copper networks regulations to new super fast fibre networks. However, national regulatory authorities already have the power, under existing regulations, to ensure all networks are open to competition.

Competitive broadband markets are particularly important for the European economy – a study for the Commission found that more than 1 million extra jobs and a further € 850bn in growth could depend on effective broadband connectivity. Experience from today’s broadband deployment also shows that high speeds and new services are simply not made available for consumers unless competition is guaranteed.

In addition, the Commission is expected to publish its proposals for the regulatory treatment of next generation access early next week. ECTA urges the Commission to ensure that dominant firms update their public offers to include fibre access, and to resist pressure from protectionist countries and dominant firms to circumvent the competition rules, so that consumers can have a choice of provider for ultra high speed broadband services.

Innocenzo Genna, Chairman of ECTA said: “If fibre upgrades end up favouring incumbent operators, the proposed Framework will have failed. It is the regulators’ duty to promote competition in the market and preserve the principle of non-discrimination, which has also been upheld by lawmakers in the face of considerable lobbying by dominant firms arguing for a relaxation of competition rules.”

He added: “Co-investment where operators share risks and rewards of investment has always been and will remain an important option to ensure that investment in expensive fibre network is made efficiently. However, voluntary arrangements are not substitutes for a proper competition assessment of the market by national regulators.”

Genna added: “The Advocate General has already confirmed the validity of Commission’s action against regulatory holidays in Germany under EU rules. It is now crucial for the Commission to back up its action against German protectionism with clear guidelines in the Recommendation on NGA which prevent a relaxation of the regulatory rules in Germany or elsewhere.”

ECTA, despite today’s delay in approval for the Telecom Framework, is confident that national telecom rregulators, by using the powers already at their disposal, can guarantee Europe has the most competitive and open telecom market. In particular, the European pro-competition telecom group is looking at regulators to end or pre-empt any Regulatory holidays for Next Generation Networks so that consumers can have a choice of provider for ultra high-speed broadband services.

Ilsa Godlovitch, Director Regulatory Affairs of ECTA, said: "The vote in the European Parliament may delay adoption of the package but it does not remove the need for firm and urgent action by regulators to make sure telecom markets are competitive. The most progressive regulators have already taken the necessary action to ensure open fibre networks despite the new Framework not yet being in place. What we are urging is that all other regulators do the same so that European businesses and consumers are amongst the first to experience the benefits of high speed broadband connectivity."

If and when adopted, the new Framework will make it legally binding to extend to copper networks regulations to new super fast fibre networks. However, national regulatory authorities already have the power, under existing regulations, to ensure all networks are open to competition.

Competitive broadband markets are particularly important for the European economy – a study for the Commission found that more than 1 million extra jobs and a further € 850bln in growth could depend on effective broadband connectivity. Experience from today’s broadband deployment also shows that high speeds and new services are simply not made available for consumers unless competition is guaranteed.

The Commission is expected to publish its proposals for the regulatory treatment of next generation access early next week. ECTA urges the Commission to ensure that dominant firms’ requirements to update their public offers to include fibre access, is properly enforced, and to resist pressure from protectionist countries and dominant firms to circumvent the competition rules, so that consumers can have a choice of provider for ultra high speed broadband services.

Innocenzo Genna, Chairman of ECTA said: “If fibre upgrades end up favouring incumbent operators, the proposed Framework will have failed. It is the regulators’ duty to promote competition in the market and preserve the principle of non-discrimination, which has also been upheld by lawmakers in the face of considerable lobbying by dominant firms arguing for a relaxation of competition rules.”

He added: “Co-investment where operators share risks and rewards of investment has always been and will remain an important option to ensure that investment in expensive fibre network is made efficiently. However, voluntary arrangements do not substitute for a proper competition assessment of the market by national regulators.”

Genna added: “The Advocate General has already confirmed the validity of Commission’s action against regulatory holidays in Germany under EU rules. It is now crucial for the Commission to back up its action against German protectionism with clear guidelines in the Recommendation on NGA which prevent a relaxation of the regulatory rules in Germany or anywhere else.”

ECTA’s key requirements of the Telecom Framework:

Next generation access

- A requirement that dominant firms open up fibre networks to competition through changes to rules governing access to the ‘local loop’
- Confirmation that risky investments should be rewarded through adjustments to the pricing regime. Co-investment schemes should also be permitted to ensure that investments are made efficiently
- Regulation should be technologically neutral and that the principles of competition and non-discrimination should be upheld

Functional separation:

- Confirmation that all regulators will have the power to apply functional separation if other measures are insufficient to open the market. This must be accomplished by guaranteeing incumbent operators put bottleneck assets such as the ‘local loop’ connecting every customer to the network in a separate unit that would be managed autonomously to ensure fair treatment of all operators in the market

A number of regulators either have taken action or are investigating these measures including the UK, Sweden and Poland. Italy has also applied a limited form of separation through a voluntary agreement with the incumbent.

ECTA encourages the Polish regulator, which is an early phase of investigating functional separation to rapidly proceed to the next step. The Polish broadband market is amongst the least advanced in Europe and could benefit from functional separation to ensure markets are fully open to competition.

Consistency of regulation and the single market

- Provision for the Commission with the power to issue binding harmonising decisions if national regulators do not properly follow their Recommendations

ECTA believes these measures could be particularly important to ensure a level playing field for competition in services to pan-European businesses that require connectivity across the single market. They could also help to ensure that consumers in every country benefit from the same level of competition and choice in telecoms and information society services.

ECTA does not support a one-size-fits-all approach, but an approach that guarantees for consumers and businesses that all markets are equally open to competition and innovation is an important goal for Europe’s economic recovery.

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About ECTA
The European Competitive Telecommunications Association (ECTA) looks after the regulatory and commercial interests of new entrant telecom operators, ISPs and suppliers of products and services to the communications industry.
ECTA works for a fair regulatory environment that allows all electronic communications providers to compete on level terms in order to multiply investment and innovation throughout an effective European internal market. The association represents the telecommunications industry to key government and regulatory bodies and maintains a forum for networking and business development.

ECTA member companies include operators, service providers and suppliers as well as National Associations of such which all contribute towards regulatory policy development and participate in our comprehensive range of networking events, conferences, seminars, briefings and executive meetings.

For further information, please contact:

Barbara McCall,
The Wordshop,
Tel: +44 (0) 20 7031 8270
Mob: +44 (0) 799714002
Email: bm@theword-shop.com