EU telecom ministers split Mon. over EC plans to force mobile operators to curb international roaming fees. While generally supporting govt. intervention, a majority backed a France-U.K. proposal for a “sunrise clause” giving providers 6 months to cut prices to an acceptable level or face caps. The standoff, which the incoming German Presidency must try to resolve, was billed as good news by the Commission and operators alike.
Dugie Standeford
Dugie Standeford, European Correspondent, Communications Daily and Privacy Daily, is a former lawyer. She joined Warren Communications News in 2000 to report on internet policy and regulation. In 2003 she moved to the U.K. and since then has covered European telecommunications issues. She previously covered the U.S. Occupational Safety and Health Administration and intellectual property law matters. She has a degree in psychology from Duke University and a law degree from the University of Tulsa College of Law.
LONDON -- Fiber-to-the-home (FTTH) rollout will make net neutrality a hotter issue in Europe, Organization for Economic Cooperation & Development analyst Taylor Reynolds said here Mon. Europe’s regulatory framework, which has encouraged strong competition in DSL services, has prevented a U.S.-style debate on net neutrality, he said. But that doesn’t mean the issue doesn’t exist here, speakers said at a Cambridge-MIT Institute forum on net neutrality.
Many member nations haven’t fully carried out the new regulatory framework (NRF) 3 years after it took effect, a 2006 regulatory scorecard shows. European Competitive Telecom Assn. (ECTA) Managing Dir. Steen Clausen blamed the regulatory patchwork for a “stark split” in performance hurting providers and consumers.
Municipal fiber-to-the-home (FTTH) rollout is rising in northern Europe and elsewhere, the Organization for Economic Cooperation & Development said. Paris, Amsterdam and Vienna are among cities planning to offer residents cheap or free broadband access. But despite buzz about muni FTTH among media, politicos and gear vendors, it’s unlikely to affect European broadband markets soon, analysts said. Incumbent telcos and other commercial providers will remain dominant in the near term, they said.
A German parliamentary panel Wed. approved draft amendments to telecom law that would allow regulatory holidays for “new services” as sought by Deutsche Telekom for its VDSL fiber network, the German Competitive Carriers Assn. (VATM) said. Information Society & Media Comr. Viviane Reding has asked EC staff to prepare to sue Germany under an accelerated procedure, according to an EU official who asked not be named, VATM said.
Competitive telcos and local carriers urged European Parliament Pres. Jose Barroso Mon. to “make it clear” to the German govt. that it’s a bad idea to give Deutsche Telekom (DT) a regulatory holiday while the company deploys a new VDSL fiber network. With amendments to German telecom law up for vote Nov. 29 in the lower house’s economic affairs committee, the German Competitive Carriers Assn. (VATM) and BREKO said it’s “incomprehensible” why billions of euros their members are investing and plan to invest should get less protection than DT’s. “Since 2000, the competitors in Germany have invested more than 8 billion euros on the fixed line sector alone,” the telcos told Barroso. They asked him to “interfere personally” to ensure DT competitors aren’t excluded from future innovation. The regulatory moratorium is backed by the 2 political parties forming the country’s govt. but strongly opposed by the EC. “Our impression is that the Commission will stick to its guns,” attorney Axel Spies said on VATM’s behalf. If the regulatory holiday for new services is adopted, the EC “will drag Germany to court,” he said.
The U.K. Office of Communications (Ofcom) Thurs. began talks on what regulation, if any, is needed for next-gen access network (NGA) investment. U.K. investment lags behind those of the U.S, Japan and other nations, because of a copper access network capable of supporting higher bandwidths over DSL, a mature pay-TV market influencing IPTV services’ potential, less competition in end-to-end infrastructure provisions, a focus on core next-generation network upgrades and other U.K. characteristics, Ofcom said. Some players want higher speed access infrastructure to launch new services, while many commercial communications providers don’t see a strong enough case for investing in NGA infrastructure, Ofcom said. But it’s important to have a regulatory regime in mind to avoid hampering future investment, it said. Ofcom is looking mainly at wireline network deployment. NGA poses 2 key policy challenges, Ofcom said: (1) The need for preemptive regulation to balance promotion of competition and efforts to avoid distorting investment incentives. (2) NGA’s social benefits, which could include social inclusion and bridging the digital divide. Ofcom’s tack on market bottlenecks -- giving competitors equal network access -- likely will work with NGA investment as well, it said. Among issues on which it seeks feedback are the level in the network to apply regulation -- access to ducts, unbundling options and so forth -- and the level of and duration for support for legacy wholesale products as operators shift to NGA networks. The regulator also will look at how to ensure current wholesale products remain available for competitors, and a suitable route for existing infrastructure investments to new technologies as they appear. Ofcom will hold seminars early next year.
Germany’s ruling parties compromised Mon. on the proposed terms for the sort of “regulatory holiday” sought by Deutsche Telekom for its new fiber network, said telecom attorney Axel Spies on behalf of the German Competitive Carriers Assn. (VATM). Christian Democrats and Social Democrats in Parliament’s economic affairs committee agreed to insert a revised definition of “new market” into amendments of the country’s Telecom Act. The new language defines a new market as one “for services and products that distinguishes itself” from other products and services with regard to performance capacity, reach, availability for mass market capability, price or quality from the viewpoint of an average user, and doesn’t simply substitute for them, Spies said. The pact also tweaks controversial Sec. 9a to say that, as a rule, new markets shouldn’t be regulated. But determining whether a service or product is new must be done by German telecom regulator BNetzA in light of goals to promote efficient infrastructures and support innovation. The good news, Spies said, is that BNetzA now seems to have discretion in determining whether a new market exists and won’t be held to a strict deadline for making the ruling. But the regulator’s decision will be predetermined by the provisions and “DT is the clear beneficiary,” he said. Moreover, he said, the market definition doesn’t focus on user demand, the standard approach for market determination, but on the provider: Meeting one of the criteria may be enough to allow the regulator to ignore other criteria and decide a new market exists. The EC “is bypassed in this process and will almost certainly challenge the new law if adopted,” Spies said. The plan is to win parliamentary approval for the compromise this year, he said. The German govt. holds a 30% direct and indirect stake in DT.
An EC proposal to extend its veto power over national telecom market definitions and analyses to include competition remedies to make enforcement more consistent got mixed reviews Fri. at the European Competitive Telecom Assn. (ECTA) regulatory forum in Brussels. The move is part of Commission review of the e-communications regulatory framework. National regulators, not surprisingly, criticized the idea. A telecom users’ representative said it could help keep regulators from straying far off course. The European Regulators Group (ERG) sees need for the veto, said Gary Healy, dir.-market development for Irish regulator COMREG. The veto raises “turf” issues about whether the EC or national regulators are better suited to address local telecom markets. Legal vulnerabilities could arise if the EC isn’t made accountable for vetoing NRAs. And subjecting remedies to potential veto may make them rigid, Healy said. Instead, regulators are collaborating to find consistency, he said. This is the 2nd time the EC has tried to grab veto power over remedies, Iris Hensler-Unger, vp of German regulator BNetzA, told us. Member nations rejected the idea in 2002 and the situation hasn’t changed since, she said. BNetzA also opposes EC Information Society & Media Comr. Viviane Reding’s concept of an EU super-regulator, she said. The agency “much favors harmonization,” she said, provided it’s between member states. The International Telecom Users Group (INTUG) doesn’t have a formal position on an EC veto, but Vice Chmn. Nick White told us the Commission needs a way to speed imposition of competition remedies. INTUG members, who are business users, fear regulatory holidays like the one Deutsche Telekom wants. The EC should have a better way to stop an NRA headed that way than slow-moving infringement proceedings in the European Court of Justice, White said. The EC Art. 7 Task Force has reviewed 500-plus NRA analyses of 18 specific telecom markets’ competitiveness, said Vivi Michou, who heads the Information Society Directorate- General’s communications services, policy & regulatory framework section. Conclusions from the massive effort: (1) Full, effective enforcement of remedies is needed. (2) So is greater consistency on which remedies are imposed and how.
Deutsche Telekom (DT) has a new CEO, which could spur an already fierce debate over the telco’s demands for a “regulatory holiday” for its new fiber network, said telecom lawyer Axel Spies. Over the weekend, DT chief Kai-Uwe Ricke resigned “in the interests of the company,” replaced Mon. by Rene Obermann, a member of DT’s management board and CEO of T-Mobile International, DT said. Naming a skilled “hands-on” manager could signal stronger lobbying by DT, and raises questions about whether Germany is ready to buck the EC on the eve of assuming the EU Presidency, Spies said. Germany proposed waiving DT from regulation for new services. That has drawn sharp criticism from Information Society & Media Comr. Viviane Reding, who said giving DT a regulatory break could sap the telecom market as a European economic engine. Other countries are scrutinizing the debate. France Telecom (FT) is “fighting for a regulatory holiday, but is using a more subtle, politically correct language than DT,” said Paris-based telecom attorney Winston Maxwell. FT is willing to make its ducts -- plastic tubes that run under streets -- available to competitors wanting to string their own fiber and compete with the incumbent, he said. The telco also has said it’s willing to consider sharing internal cabling of building if other operators have the same obligation.