Europe - Parliament and the regulatory reform

Parliament dilutes radical telecoms rules

European Parliament supports retention of the right to separate telecoms operations and changes plans for super-regulator.

MEPS yesterday voted to allow national regulators the right to force telecoms operators to separate their infrastructure and services units, but tightened conditions for its use.

National regulators and the European Commission would have to conduct detailed studies of the potential impact of functional separation before imposing the corrective measure.

The compromise, one of 33 voted last night in the Parliament’s committee on industry, research and energy, was one of the major outcomes of the vote on EU telecoms rules. German centre-right MEP Angelika Niebler had previously pushed for the remedy, one of the centrepieces of the European Commission’s proposals for an overhaul of the 2002 regulatory framework for electronic communications, to be dropped in its entirety.

Functional separation would make it easier for market entrants to gain access to expensive local networks. Critics contend that its mere presence in the directive would act as a disincentive to investment, arresting the development of high-speed broadband markets.

The threat of the remedy would, however, be tempered by changes to the Commission’s blueprint for a super-regulatory body forced through by Spanish centre-right MEP Pilar del Castillo. Viviane Reding, the European commissioner for the information society, had wanted to set up a centralised body with powers to overrule national regulators. Under the original proposals, the European Electronic Communications Market Authority (EECMA) would have dissolved national allegiances between regulators and incumbents, making it easier to deploy the functional-separation remedy.

But MEPs voted overwhelmingly in favour of Del Castillo’s alternative, known as the Body of European Regulators in Telecoms (BERT), essentially an advisory group made up of national regulators similar in nature to the current European Regulators Group. BERT would rule on markets and market remedies by absolute majority. The committee also voted in favour of Socialist MEP Catherine Trautmann’s proposals for a conflict-resolution system comprising the Commission and BERT. That system would give BERT the final say on what market remedies should be imposed.

Socialist MEPs rejected Del Castillo’s proposals for mixed funding of BERT, under which two-thirds of financing would have come from the EU budget and one-third from national coffers, on the grounds that the model would have compromised the independence of the new body. Del Castillo said that she would put forward new funding proposals ahead of a plenary vote in September.

Proposals on the allocation of spectrum, the finite natural resource carrying electronic communications, provoked fierce debate in the Parliament’s various committees related to telecoms matters. The Commission had pushed for full-scale liberalisation of the market to boost rapidly expanding digital markets, with licensing to be performed by EECMA. MEPs backed public-interest provisions that would ensure member states would retain significant control over the resource. They also voted to streamline the management of spectrum by merging the existing Radio Spectrum Policy Group and the Radio Spectrum Committee. BERT, unlike original proposals for EECMA, would have no say on spectrum-related issues.

Copyright-related telecoms proposals were voted on in the Parliament’s internal market and consumer protection committee (IMCO). UK centre-right MEP Malcolm Harbour received considerable support for measures obliging internet service providers to disseminate information on the possible consequences of illegal downloading activity. MEPs also voted to strengthen consumers’ contractual rights on issues such as the maximum duration of contracts (reduced from 24 to 12 months), termination of contracts and hidden costs.