Thursday, November 18, 2004

Go regulate yourself

It's been a bad day for telecom regulation in Europe. Following on the heels of the diatribe from UKIF against OFCOM, this bombshell from Reuters newswire:

EU concerned about telecom regulators independence

By Lisa Jucca
BRUSSELS, Nov 18 (Reuters) - Not all national EU telecoms regulators carry out their work independently and impartially although competition in telecommunications and IT has improved, the European Commission said in a document obtained by Reuters.

The paper, due to be adopted on Friday, is the Commission's annual assessment on the state of liberalisation of the European Union's electronic communications market and its prospects.

"The Commission has substantial concerns that the principles of independence and impartiality are still not fully observed in all 25 member states," the EU's executive said in a draft of its 10th implementation report for the telecoms sector.

"Some of these arise from the fact that full separation between the state's shareholding and the taking of regulatory decisions is still not ensured in all instances."

The document mentioned problems when governments interfere in decisions by national regulators or when there is no clear separation between the state and the regulator.
"This is a concern," Fabio Colasanti, who heads the Commission's Information Society department told Reuters. "There are some countries which have big problems, for instance Cyprus, which is not very satisfactory from the point of view of the historic regulator."

Other problems were regulators' lack of effective powers and lengthy appeal procedures against regulatory decisions, the document said without naming individual countries. "We are trying to attract the attention to some problems, we want to be constructive," Colasanti said. Investors head towards countries that have effective telecom regulation and a low level of state ownership, the European Competitive Telecommunications Associations said in a May report, naming Germany, France and Belgium as the worst EU performers.

The Commission said 5 EU members -- Belgium, Greece, Luxembourg, Estonia and the Czech Republic -- have not yet adopted the 2002 EU telecoms law, putting future investment at risk.
Finland and Britain were ahead of the pack, Colasanti said.

In the 5 years to 2003, new entrants have invested 70 billion euros in the EU, then comprising 15 members.

Overall, the Commission said the outlook for the industry was positive and noted that competition was growing. It said competition had led to a dramatic increase in broadband usage and had driven the cost of fixed line telephony down.

Competition was rising also in mobile phone services, where revenues had exceeded those of fixed voice services and where the average share of EU leading operators had dropped to 43.2 percent in 2004 from 46.6 percent a year earlier.

But concerns persisted with regards to high international roaming fees and charges for terminating calls on cell networks.

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