Regulators, Mobile Operators Split On EC Competition Proposal
BRUSSELS -- The European Commission (EC) will propose giving itself ultimate control over competition remedies set by national telecom regulators, Information Society & Media Comr. Viviane Reding’s spokesman said Tues. The move, among changes to be urged for the EC’s new e-communications regulatory framework (NRF), has drawn fire from the European Regulators Group (ERG). ERG views it as a fundamental shift in EC power, ERG Chmn. Kip Meek said Tues. at a mobile regulation and competition conference here. But mobile operators said if regulators can’t get things right, the EC should be able to step in.
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Meek characterized the move as giving the EC “veto power” over remedies imposed on communications providers deemed to have significant market power. National regulators are best placed to remedy competition problems, he said. The ERG wants EC oversight of the NRF focussed and clarified, but the veto power will not address underlying problems the Commission seeks to resolve, he said.
Regulators think it’s too early in the NRF’s life for such momentous change, Meek said. And broader EC control over national remedies would involve govt. ministers, raising questions about political involvement in telecom remedies, he said. But the ERG welcomes debate on the issue because it forces the group to focus more effectively on its role, he added.
Mobile industry players want competition remedies harmonized, even if that means more EC involvement, they said. Vodafone backs the veto but only if accompanied by changes in EC oversight of analyses of markets which might need pre-emptive regulation, said Matthew Braovac, Vodafone Group Services competition & regulatory counsel. If the EC has final say over remedies, operators must be part of the process, via effective national appeal procedures or by having the right to appeal EC vetos, he said.
Remedies are tricky and technical, said Ilsa Godlovitch, head of regulatory affairs for the European Competitive Telecom Assn. The best scenario would be ERG harmonization of national regulators’ best practices, she said. If the ERG can’t deliver, industry should consider whether the EC should have a role in vetoing national authorities’ decisions. “We're throwing down the gauntlet” for the ERG, Godlovitch said. The GSM Assn. hasn’t taken a position on the issue, but GSM Europe Dir. Eirini Zafeiratou said she doesn’t think remedies can be truly harmonized because the NRF was designed around conditions of older EU members to new members’ detriment.
“Don’t call it a veto,” the EC spokesman said later. The Commission simply wants NRF remedies applied efficiently in all member nations. It wants to be able to intervene when remedies are too slow coming or useless at spurring competition. Under the NRF, the EC can reject national regulators’ analyses of their telecom markets, but not remedies they impose, he said. The only way the Commission can reverse inadequate remedies now is via infringement proceedings at the European Court of Justice, actions that move too slowly for the e-communications market, he said.
The issue will be among recommendations for changes to the NRF coming June 28, the EC spokesman told us. Another proposal is for a European regulator to oversee remedies, he said. The recommendations will lay out at least 3 options: (1) Replace national regulators altogether, an alternative he said isn’t likely. (2) Decentralize into a federal model, with a European regulator working with national authorities and the EC handing over power to the EU entity. In the 3rd, and least intrusive option, the EC would have power to require national regulators to impose better remedies. -- Dugie Standeford
Mobile Regulation Conference Notebook…
French telecom regulator ARCEP intends to regulate SMS terminations, Mobile Market Regulation Head of Unit Sebastien Soriano said Tues. Speaking at a mobile regulation and competition law conference in Brussels, Soriano said France will be the first European country to regulate SMS terminations. Mobile data services are so successful in France -- SMS represents 8.5% of each mobile network operator’s total revenue -- that regulatory action is needed to counter problems unique to the country, he said. Retail prices remain high, sparking consumer complaints to France’s competition authority about 3 mobile operators’ collective dominance. Wholesale prices remain significantly higher than operator costs. Smaller operators risk being marginalized by high termination rates, which are hampering nonmobile players’ market entry, Soriano said. U.K. Office of Communications Chief Policy Partner Kip Meek said he’s “agnostic” on SMS regulation, but would want to know, before regulating, “who’s suffering? And who’s gaining?” ARCEP’s decision rests in part on claims that one mobile player, several fixed-line operators and consumers are suffering, Meek said, asking who’s gaining. Consumers may benefit if disproportionate profits are slashed or put into other services customers want. But Ofcom would view that sort of analysis with scepticism, he said.