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'Yes' to eliminating artificial barriers for ICT growth, 'no' to 'regulatory holidays', says Reding

Information Society and Media Commissioner Viviane Reding has repeated calls to national authorities to use caution when considering the introduction of 'regulatory holidays' to boost investment in the digital economy, particularly for the uptake of advanced broadband networks...

Information Society and Media Commissioner Viviane Reding has repeated calls to national authorities to use caution when considering the introduction of 'regulatory holidays' to boost investment in the digital economy, particularly for the uptake of advanced broadband networks. The concept of 'regulatory holidays' refers to the deliberate and publicly announced decision by a regulator to abstain from regulation for a certain period, or until certain conditions are complied with. This could include, for example, when the candidate for regulation has been successful and reached a dominant position in the market. Proponents of such measures in the European telecoms sector argue that they would provide an incentive to invest in the market. However, those opposing regulatory holidays have raised concerns over the risk that regulators would discriminately be second-guessing winning services or technologies. Speaking at the New Economy Forum in Madrid on 8 May, Ms Reding said that while eliminating artificial barriers is a must in order to unlock the innovative potential of the digital economy, the introduction of regulatory holidays would be a mistake. 'This would be step backwards and would result in re-establishing monopolies. 'I have made the point very strongly to the political authorities in Member States that this is against the spirit and objectives of European law,' said the Commissioner Recent figures show that broadband take-up is progressing fast in Europe with almost 60 million broadband subscribers in the EU as of 1 January 2006 .This trend, said the Commissioner, is due to the current regulatory framework for e-communications, which is helping to create a healthy and competitive environment needed for continued investment. '[T]he latest implementation report [on the telecommunications sector] shows clear evidence that competition drives the broadband take up. Countries with the highest broadband take-up all have extensive cable networks that compete with the networks of the incumbents. They also often have well developed regulatory access regimes,' noted Ms Reding. '[T]he key question is getting the balance right: the minimum of regulation to promote competition, growth, investment and innovation from industry plus a guarantee that gives the best conditions for users,' she added. The European Commission is set to adopt a review communication in late June of current regulations, which Ms Reding said will seek to identify the changes to legislation needed in order to improve the performance of e-communications. The proposals made in the communication will then be open to public consultation until September. It is expected that the Commission will make concrete legislative proposals by the end of the year.