Commission's telecom report identifies key tasks for Member States
The Commission has published its 'European telecoms regulation and markets 2002' report, which urges Member States to transpose the new European telecoms framework into national law and do more to promote competition within the sector. The report gives an overview of the health of the telecommunications market in Europe and provides analysis on the implementation of the telecoms regulatory package. It also identifies areas where further action is needed to overcome problems in the sector, such as lack of competition and unnecessary administration. As one of its key conclusions, the report states that: 'After four and a half years of liberalisation of telecoms services, the regulation put in place at national level is very substantially compliant with the EU framework. [...] Nonetheless, there are areas where work remains to be done, in particular in relation to pricing and access issues surrounding local loop unbundling.' The report is positive about the state of the telecoms sector in Europe, saying that: 'Realistic estimates of growth in the telecoms services market for 2002 in the combined national markets of the 15 Member States vary from around five per cent to seven per cent; a very healthy outlook in the light of average projected EU GDP growth of one per cent for 2002.' It does warn, however, that the market is 'somewhat fragile' following the dotcom slump, global economic slowdown, and high levels of debt due to acquisitions and the cost of third generation licences. The market analysis within the document goes on to show that prices for national and international calls have continued to fall across Europe by around five per cent, and that tariffs offered by new entrants into the market are up to 56 per cent lower for national calls than those offered by incumbents in some countries. In conclusion, the report states that 'Overall, despite the difficult financial situation in the market, there are positive indicators of continued demand for services and of competitive activity in the market.' In looking at the state of regulation of the industry in Member States, the report concludes that whilst all national regulatory authorities (NRAs) have the required skills and independence to police the sector, many are still hampered by 'heavy national procedures', which reduce their effectiveness. It goes on to state that while NRAs have done much to clarify the regulatory framework for local loop unbundling, 'significant problems remain in particular with regard to pricing and non-discriminatory access to facilities.' Study of the levels of broadband penetration in the EU shows that of the total 10.79 million broadband customers, 4.45 million (or 41 per cent) are served by new entrants to the high-speed Internet access market. When looking at the DSL market (high-speed Internet access over copper telephone lines) in isolation, however, the report reveals that new entrants serve only 22 per cent of retail customers. That only four per cent of customers are served via unbundled lines is put down to 'extensive market pre-emption by incumbents', achieved through first-mover advantage and 'tariffing issues'. The report warns NRAs and Member State governments that 'there are areas where work remains to be done, in particular in relation to pricing and access issues surrounding local loop unbundling. Full implementation both of cost-orientation and non-discrimination principles are essential in this regard [...].' In conclusion, the report states that: 'Finally, governments can, in the prevailing financial situation, assist in the roll-out of electronic communication services by examining a number of additional burdens on the sector in the form of specific taxes on telecommunications services, disproportionate fees for the placing of infrastructure, including mobile antennas, on public land, and radio emission restrictions going considerably beyond those recommended at European level.'