The new regulatory framework for Electronic Networks and Services

1. European Commission The new regulatory framework for Electronic Networks and Services Peter ScottDG Information Society Brussels

2. Authorisation Directive Access & Interconnection Directive Data Protection Directive Users’ Rights Directive The new package  Framework Directive (Art. 95) Liberalisation Directive (Art. 86)    Spectrum Decision (Art. 95) 

3. Contents 1. Background and Objectives 2. Key features of new framework 3. On-going regulatory issues 4. Next steps

4. EU Telecoms Policy1987-1998 THE GOAL • to create a flourishing single market for telecommunication services and equipment in Europe, providing users with choice, quality and value for money

5. Problems with current legal framework • Long and complex individual licensing procedures in some Member States • Not enough flexibility to cope with rapidly changing / converging markets • Not enough consistency in how rules are applied in Member States • Designed for a newly liberalised market, not one moving to a fully competitive market without sector specific rules

6. General principles set for new regulatory framework • be the minimum necessary to achieve goals • balance sector-specific legislation and competition rules • protect users where market forces do not • be open, flexible, adaptable • stimulate investment and provide legal certainty • be technologically independent, as far as possible

7. Objectives for NRAs • Promote competition • Contribute to the development of the internal market • Promote the interests of the citizen

8. Objective - Promoting competition • users to get maximum benefit in terms of choice, price and quality • no distortion or restriction of competition • efficient investment in infrastructure; innovation • efficient use of radio spectrum and numbering resources

9. Objective - Contributing to the development of the internal market • removing obstacles • encouraging trans-European networks, interoperability, end-to-end connectivity • similar treatment in similar circumstances - no discrimination • consistent regulatory practice and consistent application of rules • efficient use of radio spectrum and numbering resources

10. Objective - Promoting the interests of the citizen • universal service, (including special social groups, eg disabled users) • high level of consumer protection, including simple and independent dispute resolution procedure • high level of data protection and privacy • provision of clear information, in particular tariff transparency • maintaining integrity and security of public networks

11. Contents 1. Background and Objectives 2. Key features of new framework 3. On-going regulatory issues 4. Next steps

12. Electronic communications networks and services - Scope Content Services - outside scope of new framework(e.g. broadcast content, e-commerce services) Communications services (e.g. telephone, fax, e-mail) Communications networks (fixed, mobile, satellite, cable TV, powerline systems, networks used for radio and television broadcasting) and associated facilities (e.g. CAS)

13. Key features • Consistent treatment of all communications network infrastructures, including networks used for delivery of broadcast services • Simplification of market entry procedures (reliance on general authorisations) • Dynamic process for identifying markets that justify ex-ante regulation • Alignment with competition law principles (market definition, dominance) • Enhanced coordination between NRAs, and between Commission and NRAs

14. Monopoly Towards fullcompetition Rely increasingly on competition rules Amount of regulation Pro-competitive sectorial telecoms Laws Competition Law 1990 1998 2003

15. Contents 1. Background and Objectives 2. Key features of new framework 3. On-going regulatory issues 4. Next steps

16. Top 10 Regulatory issues in EU 15 (Nov 2001) • local loop unbundling • mobile call termination and international roaming • flat rate internet access • prices and delivery times for leased lines • tariff distortions and price squeezes

17. Top 10 Regulatory issues in EU 15 (Nov 2001) • numbering : carrier selection and pre-selection • rights of way • consumer protection • licensing conditions for 3G services • organisation and powers of NRAs

18. Local loop unbundling • Problem :slow implementation • Remedies :- hands-on monitoring by NRAs- binding deadlines - credible penalties- provision of wholesale DSL offerings in addition to ULL

19. Mobile call termination and international roaming • Problem :High cost of peak time call termination charges and international roaming charges in mobile networks • Remedy :Regulator needs to have the legal powers to impose obligations on operators (eg in resolving disputes) + Commission investigation into roaming charges

20. Leased Lines • Problem:Continuing high prices, lengthy delivery times and absence of cost orientation for leased lines, particularly for high speeds • Remedy:Effective implementation by operators of reporting mechanisms and cost accounting systems, to allow NRAs to verify costs and delivery times

21. Tariff distortions and Price squeezes • Problem :Persisting tariff distortions and price squeezes (between wholesale and retail prices) • Remedy :Better verification by NRAs of operators’ regulatory accounts

22. Numbering • Problem :Full range of carrier selection and pre-selection services not always available • Remedy :NRAs to impose carrier selection and pre-selection for all types of call (including local, long distance and international calls)

23. Rights of Way • Problem :Disparities in the roll-out of rights of way • Remedy :Clarify respective roles of NRA and local and municipal authorities

24. Consumer protection • Problem :inadequate monitoring of service quality, price transparency and contract issues; lack of effective redress mechanisms • Remedy:NRAs to strengthen their activities with regard to consumer protection issues

25. Licensing of 3G services • Problem :Disparities between licensing conditions in Member States • Remedy:Better co-ordination of future licensing rounds, as foreseen under Radio Spectrum Decisionhttp://europa.eu.int/ISPO/infosoc/telecompolicy/en/com2001-141en.pdf

26. National regulatory authority • Problems:- assignment of powers - ability to resolve disputes rapidly- staff and resources • Remedy:Requires action at political level

27. Ensuring effectiveness of the regulatory authority • Regulator needs to have the legal powers to impose obligations on operators (eg in resolving disputes) • Staff need to be equipped with the necessary technical, economic and legal expertise • Decision-making processes need to be impartial and transparent, and subject to an appeal procedure

28. Independence of Regulatory Authority • Independent of any operator or service provider • Independent of any government department that is a shareholder in an operator or service provider • Independent of political interference with regard to individual decisions

29. Contents 1. Background and Objectives 2. Key features of new framework 3. On-going regulatory issues 4. Next steps

30. Next steps Commission - SMP Guidelines - Recommendation on relevant markets, and possible Decision on trans-national markets - List of Standards (Art 17 of Framework Directive) - Art 86 Directive Member States - transposition and preparatory market analysis Council and EP - adoption of data protection Directive

31. New Groups and Committees • Spectrum policy group • High level policy group established by Commission decision, chaired by M State • Radio Spectrum Committee • standard comitology committee with regulatory and advisory roles • Communications Committee • standard comitology committeewith regulatory and advisory roles • European Regulators group • Chaired by a Regulator; aim is to to seek consistent application of rules in all M States

32. Lisbon European Council March 2000 A “competitive and dynamic knowledge-based economy” demands “an inexpensive, world-class communications infrastructure”

33. For more information ... On DG Information Society: http://europa.eu.int/information_society/topics/telecoms/index_en.htm On the new legislation: http://europa.eu.int/information_society/topics/telecoms/regulatory/new_rf/index_en.htm On implementation issues: http://europa.eu.int/information_society/topics/telecoms/implementation/annual_report/7report/index_en.htm