E-Comm Regulatory Framework High on EU Agenda under Germany
Among German priorities in assuming the EU Presidency Jan. 1 will be progress on revising the EU e-communications regulatory framework (NRF), its work program says. Telecom experts disputed whether Germany’s tense relations with the EC over controversial national legislation poised to grant Deutsche Telekom (DT) a regulatory break for its new fiber networks could stymie that progress.
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“It’s likely that the dispute between Brussels and Berlin on the regulatory holiday issue will cast a shadow on the German Presidency,” said Axel Spies, attorney for the German Competitive Carriers Assn. (VATM). The EC this week approved infringement proceedings that could bring a European Court of Justice suit once telecom act revisions become law, said a spokesman for Information Society & Media Comr. Viviane Reding. DT rivals believe the new law will create uncertainty in other EU nations as incumbents seek to follow Germany’s example, Spies said.
U.S. competitors with German investments recently lodged complaints with the U.S. Trade Representative through CompTel, charging Germany with breaching WTO rules in the telecom sector. That won’t make it easier for Chancellor Angela Merkel’s govt., said Spies: “The U.S. government and the EC are in the same camp when it comes to keeping the German market open.”
Germany doesn’t believe the new law will affect its credibility, said Berlin attorney Kornelius Kleinlein. Instead, it’s likely to “push hard” to reduce EC influence in telecom market definitions and analyses under the NRF, he said. The EC can veto national regulators’ decisions in those areas -- though not remedies imposed in cases of significant market power -- but Germany and France, in particular, want that power eliminated, he said.
DT’s fight for regulatory relief may not succeed, said Kleinlein. The new provisions leave room for a reading that fits EU competition law by barring exemption of a new market from regulation if its products merely substitute for some already existing. The services that DT wants to offer over its new fiber network are essentially the same it offers now, making unclear whether it will get an exemption, he said. Moreover, the decision on whether to exempt the network must come from the national regulator, whose ruling on whether a new market has been created is subject to EC veto.
Germany can’t guarantee that the EC will accept the regulator’s market definition, said Kleinlein. In any case, the “main battlefield” won’t be in any infringement action the EC files but in NRF review of the market for broadband access to the local loop, he said. There, national regulators will have to decide whether to include VDSL fiber networks in the market, a decision the EC will be able to squelch.
It’s been rumored the Commission proposal on the NRF may be postponed until the German Presidency’s term ends. Reding’s spokesman dismissed that idea, saying the EC plans to publish its proposals “as soon as the time is ripe, probably in the course of June or July 2007. The content of the reform proposal determines the timetable, not vice versa.”
Germany also will lobby hard for caps on international mobile roaming rates, it said. The Presidency may be keen to regulate roaming tariffs, but its influence over the process and rules will be “quite limited,” said a spokesman for the GSM Assn. (GSMA). Action requires approval by the European Parliament and Council; Germany’s Presidency, like any other, can seek only to achieve consensus among govts.
GSMA sees the “sticking point” among ministers as the rarity of govts. controlling retail prices, the spokesman said. Germany’s proposal for price ceilings is said to be harsher even than the EC’s. The German federal govt. didn’t respond to messages seeking comment.