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4. Reform of the telecom rules

Since national telecoms markets were opened up to competition in 1998, users and consumers are believed to have benefited from more choice, lower prices and innovative products and services.

The 2003 electronic communications framework created a level playing field for a converging world. The Commission sees regulation as temporary, needed only until normal market conditions develop and applies it regardless of the technology, thus stimulating innovation. By creating a consistent market across Europe, the Commission aims to give operators the confidence to build on a scale which only a market of 27 member states and half a billion consumers can provide.

The regulatory framework is currently being updated to keep the rules effective and futureproof. The reform began in 2006. On 13 November 2007 the European Commission adopted proposals for the reform of the EU Telecoms Rules, which will amend the EU Telecom Rules of 2002. The new EU Telecoms Reform attempts to give easier and cheaper access to a variety of innovative telecoms services for EU citizens. To achieve this, the Commission proposes strengthening consumer rights; giving consumers more choice by reinforcing competition; promoting investment into new communication infrastructures and making communication networks more reliable and more secure.

The reform would also remove barriers to the Single Market, making it easier for companies to compete on an equal footing and to offer their services across borders. To become law, which the Commission hopes is by the end of 2009, the Telecom proposals have to be adopted by the European Parliament and the EU Council of Ministers.

The main features of the EU Telecoms Reform are:

• New consumer rights such as the right to switch telecoms operators within one day; the right to transparent and comparable price information; the possibility to call freephone numbers from abroad and a more effective single European emergency number 112.
• More consumer choice through more competition, especially by giving national telecoms regulators the new remedy of functional separation for dominant telecom operators. Functional separation is an instrument to ensure fair competition in a telecoms market dominated by one operator. It requires an incumbent operator to separate its network infrastructure from the units offering services using this infrastructure. As telecoms markets are more dynamic, functional separation allows network access to new entrants and the incumbent's own retail division on the same terms. It gives new entrants a fair chance to build services using the incumbent's existing infrastructure.
• More security in using communication networks, especially through new instruments to fight against spam, viruses and other cyber attacks.
• Reform of spectrum management - to spur investment into new infrastructures and to increase broadband access. Today, 70% of the EU rural population is still excluded from the benefits of broadband access. The Commission wants to overcome this digital divide by better managing radio spectrum and by making spectrum available for wireless broadband services in regions where building a new fibre infrastructure is too costly. The switchover from analogue to digital TV will free a substantial amount of radio spectrum (the so-called digital dividend) that can be used for this purpose.
• Better regulation in telecoms by deregulating those markets where market-opening has already led to competition.
• Strengthening the independence of national telecom watchdogs. The Commission would like competition and consumer rights in national markets to be ensured by watchdogs which are fully independent from operators and government alike.

The European Commission also proposes the establishment of a new European Telecom Market Authority, to ensure quick and effective implementation of this reform. Its aim is three-fold:

• to improve the quality and consistency of regulation in the EU;
• to reinforce cooperation between national regulators and the Commission and
• to provide expertise for regulatory issues linked to cross-Community telecoms services.

Its main duties would include ensuring that the 27 national regulators work as an efficient team on the basis of common guiding principles; delivering opinions and assisting in preparing single market measures of the Commission for the telecoms sector; improving the accessibility of telecoms services and equipment for users with disabilities; monitoring closely the use of the single European emergency phone number 112 and facilitating cross-border EU services in relation to rights-of-use for scarce resources such as spectrum and numbers.

European Telecommunications industries as well as consumer organizations commented, for the most part, favourably on the Commission’s proposal in November 2007. Voices from the European Parliament’s Industry Committee and some member states asked for the Commission to keep any extension of its powers “proportional” and questioned the need for a new European regulatory body.