EU proposes new rules for telecom and internet services

In a recommendation published yesterday, the EU's executive body identified 18 telecoms markets where sector specific regulation may still be justified.

But the Commission also believes that there is no need "for extra red tape" outside these areas." Sector specific regulation should be the exception, anti-trust rules should be the norm", Competition Commissioner Mario Monti said. He added that regulation is a heavy burden on telcos, because it "limits commercial freedom without any evidence of an abuse having occurred."

Under the proposed framework, telecoms regulators should look into the mobile phone market, and especially the area of international roaming, in relation to which many consumer complaints about high rates have been received.

Intervention is also needed in the area of termination charges, the fees fixed line and mobile phone companies charge each other to pass along calls to consumers, according to the Commission.

The proposals will also require Member States' incumbent telephone operators to open up their lines to new entrants in the market for high speed internet services. Dominant operators will be prevented from cutting their prices to minimise competition, or block access to their infrastructure, when such access is essential to competitors.

According to the Commission, this framework will ensure healthy competition and boost Europe's competitiveness against the US and other parts of the world where the market penetration of broadband is greater, and encourage new investment in the electronic communications sector.

Although the new framework refers to operators "designated by national regulatory authorities as having significant market power," it allows, under certain conditions, regulatory intervention in markets other than those identified.

The new framework, to be implemented from July 2003, will replace the former framework of 1997, which brought the full liberalisation of the EU telecoms market. That framework has, the Commission said, been successful, but it is now outdated and runs the risk of over-regulation.

The new rules, on the other hand, will be technology-neutral and convergence-based.

EU Enterprise and Information Society Commissioner said:

"We cannot continue to think in the traditional way of each network having its own set of rules. The new framework addresses markets, not networks, and it does so in a technologically neutral manner based on competition law."

The European Telecommunications Network Operators Association, which represents Member States' incumbent phone companies, has reportedly expressed disappointment over the proposals, claiming that wholesale broadband should not be identified as a market.

The proposed new Regulatory Framework for Electronic Communications Infrastructure and Associated Services is available here