Telecom liberalisation: EU rules help to free up markets but much remains to be done
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Regular economic analysis by EU Member States and the European Commission of competition in electronic communications markets and Commission scrutiny of draft national rules are paving the way to free markets, regulated solely by competition law, says a progress report published by the Commission today. Regulation in this sector applies only to operators whose significant market power could prevent the full benefits of telecoms liberalisation from getting through to consumers. Wherever a market analysis has found tangible signs of sustainable competition, regulation has been trimmed back or removed altogether. However, much remains to be done. As of 30 September 2005, sixteen EU Member States had found no effective competition on one or more of the 18 electronic communications markets defined by the EU and had taken steps to boost competition on the markets concerned. Five Member States had found only partial competition on one or more of these markets and had imposed remedies where it was lacking. But nine Member States had yet to notify the Commission of their analyses of any of the 18 markets. Of the analysed markets (152 out of 450), 123 were not competitive, 19 fully competitive, and 10 partially competitive.
“Regulatory consultation, consistency and transparency across the EU pave the way to a level playing field in electronic communications”, said Information Society and media Commissioner Viviane Reding. “Companies can be sure that a single set of rules is applied in a similar manner across the EU, thereby giving them the confidence to invest EU-wide. Ultimately, consumers will reap the benefits of choice in e-communication services and products and competitive pricing”.
“The Commission helps consumers to benefit from a Single Market for electronic communications by ensuring that regulation in this sector is conditional upon a comprehensive economic analysis, in line with competition law principles”, added Competition Commissioner Neelie Kroes .
Consultation builds consistency
The Commission report shows that in its first two years the Community consultation mechanism on the competitiveness of electronic communications markets has helped to bring about more consistency, mainly with regard to where and when regulatory remedies are imposed on operators. As to the choice of remedies for market failure, the Commission cooperates closely with national regulators to ensure that these are appropriate and as consistent as possible, but recognises that the details of the chosen remedies may still vary from one Member State to another. The report also finds that the consultation mechanism has enhanced transparency for market players.
The Community consultation mechanism, set out in Article 7 of Directive 2002/21/EC, is at the heart of the e-communications regulatory framework that entered into force on 23 July 2003. The framework takes a dynamic approach insofar as it requires national regulatory authorities (NRAs) to perform regular competition-law based analyses of their domestic markets and to remedy market failures such as excessive pricing or denying a competitor access to the network.
Getting the remedies right
Proposed remedies must be drawn from the regulatory toolkit provided in the framework and must undergo an EU-wide consultation. The mechanism also empowers the Commission to comment upon, or in certain cases to reject, these proposals. Overall, the systematic and EU-coordinated assessment of competition on the relevant markets guides the de-regulatory process until competition law alone will suffice to tackle market failures.
The report can be consulted at:
See also MEMO/06/59