EU Commission Moots Major Telecom Market Reform

Addressing the German Association for Information Technology, Telecommunications and New Media German (Bitkom) on Tuesday, EU Information Society and Media Commissioner Viviane Reding said that the current patchwork of national telecom regulations was inconsistent and holding back competition.

"The most effective way to achieve a real level playing field for telecom operators across the EU would of course be to create an independent European telecom regulator that would work together with national regulators in a system, similar to the European system of central banks," Reding said.

One of the countries that would be affected by the establishment of the EU telecom regulator is Germany. Reding has previously criticized the German government for tolerating Deutsche Telekom's "monopolistic" and "unilateralist" position on the country's telecommunications market "out of short-term political opportunism."

She also raised the possibility of setting up a European agency to manage radio frequencies, but acknowledged that such an idea was "not yet very popular in some quarters."

Tougher competition

The European Commission is eager to see tougher competition in Europe's telecom market, which Brussels considers essential if Europe is to remain on top of key developments in information and communications technology. Reding is to begin sounding out industry officials on Wednesday about how to improve regulation with the aim of proposing new rules by the end of the year.

Reding is already leading a campaign to force mobile telecom operators to lower their so-called "roaming tariffs" on phone calls made from a mobile phone while abroad.

EU Competition Commissioner Neelie Kroes said last week that she was considering launching a sector-wide inquiry into telecommunications.

The US model

Reding said that the liberalization of telecom goods and services had had a "dramatic" impact on the market, but that still more needed to be done. Noting that the landmark decision of US authorities to break up AT&T in 1984 yielded wide-ranging benefits, she said bold measures were needed to weaken the grip of former state monopolies.

In particular, Reding raised the possibility that regulators could force dominant operators to let rivals use their infrastructure, which she called "structural separation."

"I believe that the policy option of structural separation could answer many competition problems that Europe's telecom markets are still facing today," she said.

"Perhaps we have to be as radical as regulators were in the US in the 1980s to make real progress. Of course, we will have to find our own European solutions, adapted to the needs of our continent," she added.