The future regulatory framework of electronic communications

Representatives from European telecommunications and related industries, their national regulatory authorities and consumer bodies gave a generally warm response to the European Commission's plans for the future regulatory framework for electronic communications during a publi...

Representatives from European telecommunications and related industries, their national regulatory authorities and consumer bodies gave a generally warm response to the European Commission's plans for the future regulatory framework for electronic communications during a public hearing on 10 and 11 May.

In particular, delegates signalled approval at the speed of the process, which the Commission hopes will emulate the e-commerce directive, adopted by the European Parliament earlier this month, both of which were signalled as a top priority at the recent Council summit in Lisbon.

The hearing was the last opportunity to discuss the proposals before the Information Society Directorate-General prepares five directives, which, if approved by the European Parliament and Council, will be the cornerstone for shaping Europe's position in the Information Society. The public has until 19 May to submit written proposals and suggestions, and the updated regulatory framework is due to be launched in June.

'The new regulatory framework for electronic communications networks and services must reflect the reality of this dynamic sector,' said Erkki Liikanen, Commissioner responsible for telecommunications. 'The Lisbon European Council has highlighted the importance of the 1999 Communications Review process, and the need for speedy adoption and implementation of the new regulatory framework.

'The aim of the public hearing is to take the debate forward, building on the recent public consultation, and giving interested parties an opportunity to give their views on specific issues to be covered by the forthcoming legislative proposals.'

In November 1999, the Commission launched a public consultation on the future of the regulatory framework for electronic communications. In April, the results of this consultation were made available and a number of key orientations were set for an updated regulatory framework.

The five working documents that formed the basis of discussions were based around these orientations, and were made available on the Internet prior to the hearing. They cover the general regulatory framework, authorisation of services, access and interconnection, universal service, user rights and the protection of privacy in electronic communications.

The proposals aim to simplify licensing rules, moving to an authorisation system based on the use of general licences to authorise all communication networks and services. The documents will draw heavily on EU competition law based on the concept of dominant position when regulators feel it necessary control the behaviour of firms with significant market power.

Opening the two-day hearing, Robert Verrue, Director General of the Information Society DG, thanked the assembled audience for their past and anticipated contributions. In order to keep the momentum instilled into process at the European Council Summit in Lisbon, he said the Commission was working to a strict deadline, aiming to present five directives in June. 'The timetable we are working towards is very tight,' he said, 'but the markets and technologies involved are changing very quickly and we need to respond.

'I think I can say that this is the first time that we have held a public consultation on texts at such an advanced stage. It is a reference of what is now possible because of electronic communications and the Internet.'

The first working document, 'a common regulatory framework for electronic communications networks and services', was presented by Andy May of the Information Society DG. The proposed harmonised framework would cover all satellite and terrestrial networks, including fixed and wireless.

Independent and impartial national regulatory authorities (NRAs) would oversee the system under conditions set out in the directive. NRA's would be obliged to intervene in cases where operators were deemed to have significant market power (SMP). The Commission will set guidelines to assist NRAs in defining markets and assessing the level of competition, and whether or not to act. Some markets, as defined by the Commission, would justify ex ante regulatory intervention, and in these cases NRAs may not impose obligations.

There was debate over the definition of SMP and whether NRAs would be sufficiently independent, but in general participants were pleased that the relationship with competition law would be made clear.

'Access to, and interconnection of, electronic communications networks and associated facilities' was the second working document to be presented. It seeks to ensure that during a period of converging technologies and services and strong market growth, the market for electronic communications services continues to develop in a way that stimulates innovation, competition and user choice. Competition rules are adopted as the prime method of regulating the electronic communications market, however in the transitional stage some sector specific ex-ante rules will continue to be appropriate, particularly where the former monopolists still provide the majority of connections, constraining the competitiveness of the market.

Discussions focused on when such conditions would apply, and what the appropriate regulatory approach would be. It was agreed that regulation should be specific to the problem, proportionate and maintained only for as long as necessary. The overall aim is to provide legal certainty for market players by establishing clear criteria for intervention.

The third working document covered 'the authorisation of communications networks and services'. It proposes the further harmonisation and simplification of national authorisation rules, based on comments received in the 1999 review. At present a patchwork of 15 national regimes governs market entry for communications service providers, each with its own license categories, conditions, procedures and fees.

Based on research showing that the lighter regimes were as effective, if not more so, in stimulating a competitive market, the Commission is proposing a simplified and lighter regulatory model, reduced to a single European authorisation.

'Universal service and users' rights relating to electronic communications networks and services' is the subject of the fourth working document. The document tries to find a balance between universal service obligations, user and consumer interests and rights, and mandatory services. It aims to ensure the availability of good quality electronic communications services throughout the Community, setting standards for contracts, quality of service and the transparency of information made available. Debate focused on how much regulation was advisable.

There was general agreement on the overall aim to ensure a quality set of services - accounting for national conditions - at affordable and competitive prices.

The final working document discussed covered 'the processing of personal data and the protection of privacy in the electronic communications sector', with the aim of securing a high level of protection for personal data and privacy, regardless of the technology being used. If adopted, it will replace an existing directive on the processing of personal data and the protection of privacy in the telecommunications sector. No major changes are intended, rather adaptations are required to account for developments in technology, such as developing new definitions about the types of data needing protection (for example, location data giving the geographic position of mobile users).

The document includes provisions for subscribers to monitor the processing of their data, and to determine whether or not their information is stored in public directories. Some concern was expressed over the proposals for blocking of unsolicited communications. In general, there was less agreement over this working document, with some participants asking for more time to realise how new technologies will affect data processing.

Wrapping up the session, Nickolas Argyris, Director of Communication Service in the Information Society, said there had been some very interesting contributions, and the quality of debate will lend itself finally to the quality of the proposed directives.

Recently, the Commission also adopted a recommendation to national regulators based on unbundling the local loop. The plans encourage local operators to open their networks to competition, particularly the final few metres of copper wire that link subscribers to their nearest exchange. It is hoped this will lead to cheaper Internet costs, giving a boost to the Commission's eEurope initiative.