European Commission adopts new recommendations on the retail and wholesale comms market

The European Commission today adopted new recommendations on the retail and wholesale comms markets, which it said should be subject to telecom-specific regulation. This cuts the list of regulated markets to nine, half the number the original 2003 recommendation listed.

EU Telecoms Commissioner Viviane Reding argued that where telecoms markets tended towards effective competition, sector-specific regulation would no longer be needed. She pointed the way forward by saying that, "We should instead concentrate regulation on those markets where structural competition problems persist, such as access to high-speed broadband services. This is where almost all of the national telecoms regulators have identified serious, and sometimes even growing, competition problems." The recommendations are applicable today, the EC said.

However, Ovum analyst Matthew Howett said that reducing the list of regulated markets by 50 per cent immediately was a "reason for some concern, since we become reliant on a system of ex-post regulation, which has so far failed to act as a credible deterrent".

Howett also commented that the inclusion of [optical] fibre in the access market definition is interesting. "This will require operators to open their ducts and share infrastructure with competitors,"he explained. Such a move may clash with UK comms regulator Ofcom's approach, published in September. In Future Broadband : Policy approach to next generation access, Ofcom said that, "Intervention to secure NGA investment today is premature, but should not be ruled out if circumstances change."

Another recommendation is the creation of a European Telecom Market Authority (ETMA), which industry experts say would "consult" over decisions taken nationally rather than perform some sort of EC super-regulation. There are also plans to offer national comms regulators the option of separating incumbents' access networks from incumbents, if all other means have failed. Plans were also put forward for radio spectrum liberalisation and secondary trading of bandwidth purchased but not used.

Howlett questioned whether all the proposals would survive, but pointed out that, "If we consider the style that we have become used to from the Commissioner, with first-class negotiation skills, Reding will initially take the most ambitious stance, knowing that after compromising she will get the deal she really wants.”