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EU regulation under attack

The GSM Association’s European mobile operator focus group, GSM Europe, mounted an attack on the EU’s regulatory framework review on Monday, following the completion of round one last week.

The aim of the EU regulatory framework has been to progressively reduce ex-ante regulation in a number of market segments as competition in the market develops.

But the review has led to fears that the EC may be given greater powers to control national regulatory agencies by intervening in decisions at a local level, particularly after Viviane Reding, EU Commissioner for Information Society and Media’s aggressive approach towards mobile roaming.

The GSM Europe trade association believes that the European Commission has raised serious concerns “in going outside of the Framework to introduce regulation of wholesale and retail international roaming markets, setting a precedent for unexpected and random future intervention in communications markets which can give no confidence to investors or operators as to the nature or level of regulatory risk they face.”

Ultimately, the chair of GSM Europe, Kaisu Karvala, believes that the Commission is reluctant to commit to removing markets that have been found competitive in all but a very few Member States and in fact seeks to add new markets such as wholesale SMS.

“The Commission frequently refers to a de-regulatory approach and the use of better regulation principles but in the case of mobile is unfortunately going in the opposite direction,” Karvala said.

“The Commission always talks about competitiveness and innovation, but instead what we get is more and more regulation. This is bad for the economy and for European consumers.”

However, without Reding’s intervention European consumers would still be paying – as the subsequent cuts have shown – highly inflated roaming rates.

It is not just the mobile operators that have gone on the offensive against the EU’s regulatory proposals either. The authority has also taken some flack from the governments of the member states and fixed line incumbents, which stand to be targeted by EU regulation.

Germany and the EU remain at loggerheads today, with the EU stepping up its threats to take the country to court over controversial proposals to protect Deutsche Telekom from regulation.

The incumbent German carrier, which is in the midst of rolling out a Eur3bn (£2bn) high speed VDSL network, has asked the government that the network be exempt from competition for two to three years, so it can establish itself and recoup the investment cost.

The proposal has been supported by the German government, although the country’s telecom regulator, Bundesnetzagentur (BNetzA), has endorsed a regulatory measure that would give new market entrants access to the incumbent carrier’s new broadband network.

Rudolf Boll, spokesman for the German regulator confirmed to telecoms.com that there is no disagreement between the EU and the German regulator over access to Deutsche Telekom’s VDSL Network.

“The disagreement is between the EU and the German Government over the regulation in future,” he said. Germany, like a number of other European states, believes that regulation will stifle innovation and investment in the telecoms market.

Last week, the European Telecommunications Network Operators Association (ETNO) warned that despite its intentions, the regulatory framework has resulted in more ex-ante regulatory obligations, with National Regulatory Authorities continuously extending regulatory intervention to new markets areas and technologies.

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