Reding restates call for super regulator

Viviane Reding, the European Union’s Commissioner for Information Society and Media, restated her call for a pan-European super regulator on Thursday.

Speaking at the European Competitive Telecommunications Association regulatory conference in Brussels, Reding proposed a system under which national regulators would continue to act as direct contact points with operators and directly analyse the market but would have to operate as a system and in line with guidelines and decisions at a supranational level.

“For me it is clear that the most effective and least bureaucratic way to achieve a real level playing field for telecom operators across the EU would be to replace the present game of “ping pong” between national regulators and the European Commission by an independent European telecom authority that would work together with national regulators in a system similar to the European System of Central Banks,” Reding said.

Under a “two pairs of eyes” principle, Reding also outlined plans for greater consistency and effectiveness in the application of remedies to repair the fragmentation of the internal market. Under this principle the Commission would extend the internal market-control that it already exercises with regard to market analysis to the remedies as well.

“Experience has shown that “two pairs of eyes” see more than only one,” Reding said. Although she acknowledges that “some national authorities are saying that they know best what is happening on their markets,” without the Commission’s role of surveillance in the present regulatory framework, national regulators may arrive at wrong decisions, she said.

In any event, the commissioner warned the national regulators that they need to tighten up the timescales in which they act, “in order to avoid the long delays that we have seen in some countries.”

In the spring of next year, the EU will review the Commission Recommendation on Relevant Markets of 2003. The Commission said it is ready to remove at least one third of the markets that were originally listed as markets where ex ante regulation is appropriate.

But one thing is clear – incumbents will remain in the crosshairs. Reding claimed the market has identified that dominant operators tend towards non-compliance or stretch the rules to their limit. To address this problem, she said the market is largely in favour of the measure of creating functionally separate businesses for services, on the one hand, and access provision, on the other – such as is the case in the UK. These separate businesses would be obliged to provide equivalence of treatment to all operators.

“I believe that functional separation, which is a specific form of separation in the large sense as just described, could indeed serve to make competition more effective in a service-based competition environment where infrastructure-based competition is not expected to develop in a reasonable period.”

Reding added that functional separation would not be possible without an implementation of the “two pair of eyes” principle.

Tony Lavender, analyst with Ovum, said that Reding’s overall assessment was that good progress has been made with liberalisation and that service competition has played its part. But that the future requires greater investment in sustainable infrastructure competition.

Many of the objectives have to rest with the application of the current framework for the time being, Lavender said, as the new framework is unlikely to become law before 2009. “It is hard to see how this can be fully achieved with the deficiencies of the current framework and fragmented national approaches,” he said.

“It goes without saying that there will be much more debate on the final form of the review before the dust settles” Lavender said.

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