Meni Styliadou Director European Government Affairs CORNING

1. The New Communication Legislative Package Meni Styliadou Director European Government Affairs CORNING

2. The New Communication Legislative Package Will EU rules on Network Access allow the deployment of next generation broadband infrastructure in Europe ?

3. Agenda • Principles • How it works in practice • What are the implications

4. EU Communications Legislative Package • Framework Directive (2002/21/EC) • Sets the principles and mechanisms • Defines relationship between NRAs & Commission • Authorization Directive (2002/20/EC) • Licensing and authorization for services & networks • Access Directive (2002/19/EC) • Access and interconnection of electronic communications networks & associated facilities

5. EU Communications Legislative Package • Universal Service (2002/22/EC) • Universal service & users rights • Data Protection (2002/58/EC) • Data processing and protection of privacy in the electronic communication sector • Consolidated Competition Directive (2002/77/EC) • Competition in the markets for electronic communications networks & services

6. EU Communications Legislative Package Basic Principles • Technological Neutrality • Same rules should apply to all networks • Regulatory Intervention • Should be limited to cases where there is no effective competition • Licensing • Required only for scarce resources such as frequencies or numbering

7. EU Communications Legislative Package How it Works • Competition in Communication market :same rules apply to all technologies « Electronic communications network shall mean transmission systems and, where applicable, switching or routing equipment & other resources which permit the conveyance of signals by wire, by radio, by optical or by other electromagnetic means, including satellite networks, fixed (circuit - & packet- switched, including internet) and mobile terrestrial networks, and electricity cable systems, to the extent that they are used for the purpose of transmitting signals, networks used for radio and television broadcasting, and cable television networks, irrespective of the type of information conveyed »

8. EU Communications Legislative Package How it Works • Authorization : • Operators can provide services and/or establish networks subject to a general authorization. • Individual licensing may be required only for • Use of radio frequencies • Use of number • General authorization may include a number of obligations defined in the directive • NRAs may stop an undertaking from providing electronic communication services if found in breach of conditions attached to a general autorization • Operators may also be subject to « specific obligation » by virtue of the Access Directive, USO etc.

9. EU Communications Legislative Package How it Works • Access Obligation : • NRAs and the Commission periodically assess all communication markets to identify which markets present the following characteristics: • High and non-transitionary entry barriers • No dynamic leading to effective competition • Competition law cannot resolve the issues • If a market presents these characteristics, the NRAs need to assess whether there is an operator with SMP in one of these markets • If yes, NRAs need to impose adequate remedies

10. EU Communications Legislative Package How it Works • Examples of markets found to be susceptible to ex-ante regulation : Retail level • Access to the public telephone network at a fixed location for residential customers • Access to the public telephone network at a fixed location for non residential customers • Etc.

11. EU Communications Legislative Package How it Works • Examples of markets found to be susceptible to ex-ante regulation : Wholesale level • Call origination on the public telephone network provided at fixed location • Call termination on individual public telephone networks provided at fixed location • Voice call termination on individual mobile networks • Wholesale broadband access • Etc.

12. EU Communications Legislative Package How it Works • Examples of possible remedies : • Transparency • Non discrimination • Accounting separation • Access to and use of specific network facilities • Price control and cost accounting obligations • Retail obligations

13. EU Communications Legislative Package Implications • Advantages :one applies regulation only if necessary • Old « mechanic » rules run the risk of regulating what is not necessary or not regulating what is necessary • Under the new framework, regulation will only target those markets and situations where it is strictly needed. Each market will be subject to an appropriate regulatory response to specific, clearly identified problems

14. EU Communications Legislative Package Implications • Disadvantages :there is a lot of uncertainty : investors’ nightmare • Periodic assessments mean frequent changes • Reliance on NRAs and frequently on an eventual « compromise » between NRA and the Commission makes « legal predictability » impossible

15. EU Communications Legislative Package Implications • Disadvantages :particular challenges for fibre deployments • If an operator deploys fiber in access, there is a high probability that this fibre infrastructure may be construed as « a high non-transitionary barrier to entry » and the operator may be subject to ex ante regulation and more specifically to an access obligation. This may create disincentives for fibre deployments, in particular in view of the cost involved and the long depreciation period of such investments

16. e-Europe • Lisbon agenda : EU to become the most competitive and dynamic knowledge-based economy by 2010 • In order to achieve this, the Commission has been asked to draw an action plan • e-Europe 2005 aims to stimulate services, applications and content-based on a widely available broadband infrastructure

17. e-Europe • The initiatives focus on : • e-government • e-learning  to stimulate demand • e-health • e-business • Widespread availability of broadband access at competitive prices (with public sector intervention if necessary) • Secure information infrastructure

18. Thank you