Commission asks for separation of telecom and cable activities
The European Commission is inviting comments on a draft proposal for a Directive which would legally separate cable operators from telecommunication ventures with the aim of ensuring full competition in the multimedia and audiovisual sectors. The Commission's proposal is based on the results of two studies it requested which resulted in the following four main conslusions: - The development of the telecommunication and multimedia markets depends on four factors: service competition, infrastructure competition and infrastructure upgrade, as well as other types of innovation. The joint provision of telecommunications and cable-TV networks by former monopolies can stifle the development of telecom and multimedia applications; - In the EU, the joint provision, inherited from past monopoly positions, of telecommunications and cable TV networks by a single operator could in certain Member States allow former monopolies to delay the emergence of effective competition. This could lead, from the start, to an asymmetrical situation favouring dominant telecommunication operators over new entrants; - The restrictions on the provision of cable TV capacity via telecommunication networks are also significant as they can create an asymmetrical regulatory framework which again constrains optimal market development over time. However, given that the technology allowing such provision is just emerging, the constraints are not yet heavily felt in practice in most Member States; - The accounting separation in the case of joint provision of competing networks by dominant telecommunication operators, established by the Commission Directive 95/51/EC ("Cable Directive"), has been shown to be insufficient to facilitate pro-competitive development in the multimedia sector. The proposed Directive, grounded on Article 90 of the Treaty, would allow the Commission to take the necessary measures in order to establish or re-establish competition in areas of activity where firms benefit from special rights or a monopoly position. It may also make it possible, following a complaint, for the European Commission to oblige a telecommunication company to abandon its cable activities.