IP/10/644

Brussels, 1 June 2010

Telecoms:Commission report on national telecoms regulation shows more competition but no Single Market

A European Commission report released today shows that EU telecoms markets have become more competitive thanks to the Commission's guidance in the consultation and review process known as the 'Article 7 procedure',wherebynational telecoms regulators inform the Commission in advance of their plans to regulate parts of their national telecoms markets. As a result,citizens and businesses enjoy greater choice of services and cheaper prices. However, the report also indicates that a single EU telecoms market is still far from reality, which is why the Commission's Digital Agenda for Europe (IP/10/581) calls for swift and consistent enforcement of existing telecoms rules and indicates that the Commission intends to propose appropriate steps to reduce the cost of the absence of a Single Market in telecoms services. Problems include different national regulatory approaches to tackling competition issues, such as regulating access to fibre networks.Today'sreport also warns that regulatory uncertainty could hamper the rollout of investment-intensive infrastructure projects like Next Generation Access (NGA) networks, one of the flagships of the Digital Agenda for Europe.

Commission Vice-President for theDigital AgendaNeelie Kroes said: " Commissionguidance to national telecoms regulators has guaranteed a level of consistency and predictability that gives investors confidence. However, we need more coordinated regulation to ensure harmonised implementation and proper functioning of asingle EU telecoms market”.

Commission Vice-President forCompetition Joaquín Almunia said: "The report highlights that implementation of EU telecom rules by national regulators under Commission supervision has opened up telecoms markets to competition,bringing greater choice and cheaper prices to EU citizens and businesses".

The Commission report issued today outlines major trends and issues arising from the Article 7procedure over the past two years. On the whole, this notification procedure has led to less and better regulation across EU telecoms markets. However national telecoms regulators continue to apply diverging solutions to cases where there are similar competition problems.These include:

-Treatment of fibre access products in the wholesale broadband markets -e.g. in a number of cases,although fibre was included in market definitions, telecoms regulators proposed not to impose regulatory remedies or to limit these to fibrenetworks.

-Applying differentcalculationsfor the charges at which operators offer part of their networks(access) or convey calls for other operators(interconnection).A number of regulators still include non-relatedcost elements in the calculation of termination charges, such as spectrum costs, which leads to inflated charges.

-Different regulatory approaches in cases where telecom operators separate the provision of services to other telecoms operators from those provided to end-users(functional separation).

As of May 2011, revised EU telecoms rules will give the Commission additional responsibilities forthe imposition and implementation of remedies by national regulators(see MEMO/09/513, and annex below). The Commission is committed to ensure the consistent application of the EU telecoms rules in close cooperation with the Body of European Regulators for Electronic Communications(BEREC - see SPEECH/10/15), and to promote further high speed broadband rollout as foreseen in the Digital Agenda for Europe (IP/10/581).

The Commission is currently finalising a Recommendation on regulated access to Next Generation Access (NGA) networks, which builds on the guidance it provided as part of national broadband market reviews. The Commission, with BEREC, is also considering further instructions to telecoms regulators on the consistent implementation of separation commitments and remedies.

Background

The procedure established by Article 7 of Directive 2002/21/EC on a common regulatory framework for electronic communications networks and services (the Framework Directive)has been instrumental in identifying areas where the Commission, together with BEREC, needs to act to promote the Single Market for electronic communications.

Under the procedure, the national telecoms regulators must submit their market analyses to the Commission before adopting final decisions with a view to consolidating the internal telecoms market. Since the creation of the Article 7 procedure, more than 1000 draft regulatory decisions have, been submitted for analysis to the Commission by National Regulatory Authorities.

Forfull report on market reviews under the EU Regulatory Framework,and for Commission's decisions and the related notified measures under the Article 7 proceduresee:

For more on the Article 7procedure seeMEMO/10/226.

Annex

The newSingle Market Procedure for assessing market definitions and
significant market power findings proposed by national telecoms regulators
(Article 7 of the Framework Directive 2009)

* BEREC - Body of European Regulators for Electronic Communications

The new Single Market Procedure for assessing regulatory remedies
proposed by national telecoms regulators
(Article7a of the Framework Directive 2009)

* BEREC - Body of European Regulators for Electronic Communications

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