Telecommunications and the information society

As a first step in executing its action plan on Europe's progress towards an information society, the European Commission has sent the first part of its Green Paper on telecommunications infrastructure to the Council and Parliament. In most Member States, telecommunications n...

As a first step in executing its action plan on Europe's progress towards an information society, the European Commission has sent the first part of its Green Paper on telecommunications infrastructure to the Council and Parliament.

In most Member States, telecommunications networks are in the hands of State monopolies, the telecommunications operators. In the first part of the Green Paper, the Commission has proposed a timetable for the introduction of competition in the provision of telecommunication network infrastructure. The second part of the Green Paper will be issued by the end of this year and will deal with the modalities of infrastructure liberalization.

As an immediate step, the Commission intends to enable operators of infrastructure for specific purposes, such as cable TV or networks, to make their infrastructure available for the provision of telecommunications services which have already been liberalized.

Corporate high capacity networks, as well as innovative entertainment and educational services for the home, are very high growth industries. This is not a "zero sum game" between old and new operators. The market has the potential to expand rapidly.

The benefits achieved from liberalizing the use of existing infrastructure for liberalized telecommunications services will include the following:

- Overcoming or bypassing bottlenecks in existing networks;
- Stimulation of public and private investment (which calls, in particular, for a stable regulatory framework);
- Competitive pressure to bring tariffs into line with costs, which will dramatically reduce prices for leased lines;
- Encouraging innovation and experimentation, allowing maximum flexibility combined with enhanced quality of service;
- Particular stimulation of the use of infrastructure for multimedia and interactive services;
- Significant growth opportunities for Europe's telecoms sector;
- Allowing the development of various pan-European and global alliances.

The most important benefit is the improvement of the competitiveness of European industry as a whole. This relies upon the availability of advanced business communications services matching, in terms of quality and price, those of their competitors in more liberalized environments, such as the USA and Japan.

Actions to be taken over the past few years in telecommunications services, except for public voice telephony, have already been opened to competition. The Union's telecommunications policy is now focused on the date of 1 January 1998 for the liberalization of voice telephony services for the general public, subject to transitional arrangements for certain Member States. Industry now needs a clear picture of how and when the liberalization of infrastructure will proceed.

In order to define such a coherent approach, the Commission proposes the general principle that where telecommunications services are open to competition, there should be a free choice as to the underlying infrastructure used for the delivery of these services.

On the basis of this principle, immediate action is necessary and desirable to remove restrictions on the use of own or third-party infrastructure in the following areas:

- The delivery of satellite communications services;
- The provision of all terrestrial telecommunications services already liberalized including the use of cable television infrastructure for this purpose. This concerns terrestrial telecommunications services other than the provision of voice telephony services to the general public, i.e. data and value-added services as well as voice services for corporate networks and closed user groups;
- To provide links, including microwave links, within the mobile network for the provision of mobile communications services;

Immediate action in the first three areas could remove substantial barriers which currently exist to the provision of services already open to competition, thereby making the liberalization measures undertaken by the EU fully effective. At the same time, studies carried out for the Commission show that action in these areas will not undermine the provision of universal services in Member States.

The full liberalization of infrastructure for voice telephony services for the general public following their opening to competition on 1 January 1998 (subject to additional transition periods for a number of Member States) will require certain safeguards. These involve securing the appropriate financing of networks and network development. Not only must current levels of universal and public services be maintained, but also their further positive development must be ensured. Such safeguards can only be defined on the basis of broad public consultation which will be initiated by the second part of the Green Paper on infrastructure which is to be issued by the end of this year.

The Commission's Paper will enable the Council, at its meeting on 17 November 1994, to decide on the principles of liberalization and on a clear timetable.

The report to the European Council in Corfu on Europe and the global information society by the Bangemann group had already put forward a convincing argument for information and communications to be placed at the heart of Europe's future economic and social strategies. The report's first recommendation is to request Member States to "accelerate the on-going process of liberalization of the telecommunications sector by opening liberalizing infrastructures and services still in monopoly, by removing non-commercial political burdens and budgetary constraints on telecommunications operators, and setting clear timetables and deadlines for the implementation of practical measures to achieve these goals".

Recognizing the need for effective and timely action, the Commission prepared an action plan on 19 July 1994 on "Europe's way to the information society". In line with the conclusions of the Bangemann group report, the plan identifies infrastructure liberalization as one of the main initiatives to be taken in order to open the way for the development of the network and applications on which the information society relies.