House of Lords: European Union Committee: 5th Report of Session 2007–08: The Single Market: Wallflower or Dancing Partner? Inquiry into the European Commission’s Review of the Single Market. HL Paper 36.
Volume 1 report
Volume 2 evidence
114 The policy to liberalise and harmonise the telecommunications markets for the provision of networks, services and equipment has been substantially successful, particularly in the services and equipment markets. Such developments have contributed to the very considerable rate of technical and market innovation experienced in the sector over recent years, which has resulted in extensive economic and social benefits accruing to EU citizens.
115. In general, the current regulatory framework for the provision of electronic communications networks and services has met its objectives and does not require any radical revision. The main concern continues to be failures by Member States in the implementation and enforcement of certain elements of their regulatory obligations. The Commission has recognised this in its reform proposals, with new measures designed to improve its oversight of the decisions of Member State NRAs, to ensure greater consistency in approach between Member States. We therefore welcome its reform proposals in this respect.
116. The Commission should consider what steps can be taken to reduce further the market power of the national incumbents. Functional separation, where an operator places the provision of certain wholesale access products in an independently operated business unit supplying all market players on equal terms and conditions, including the operator’s own retail business, provides a potential model that should be considered by NRAs for other incumbent operators. This approach was voluntarily implemented by BT through Openreach. The Committee supports the Commission’s proposal to enable NRAs to impose this as a remedy.
117. The Committee was not persuaded that the Commission’s proposal to establish an EU regulator for the telecommunications sector is necessary. The ERG is a co-ordinating agency similar to what has been proposed for the energy sector. Despite the claims made by the Commission, the Committee believe that such a measure is likely to increase regulatory complexity and uncertainty for market participants and bring insufficient benefits for the costs involved.
118. Ensuring that spectrum management is flexible enough to meet the challenges of technological advances was raised to some witnesses. We therefore welcome the Commission’s initiative on spectrum, including the facilitation of secondary trading; greater access to licence-free spectrum, and further co-ordination on the conditions
applicable to spectrum authorisations.