Reding Readies Regulatory Fireworks

"Remember, remember the fifth of November" goes the poem about the 1605 plot by Guy Fawkes and his gang to blow up the British Houses of Parliament.

Well, there could be fireworks of a different kind this Nov. 5 if the European Union's feisty telecom commissioner Viviane Reding fulfills her plan to unveil her latest revised proposals for a pan-European telecom regulatory body that would have some measure of control over telecom rules in the EU's 27 member states, each of which is currently regulated by its own national watchdog.

Reding and her team believe the relationship between the majority of national regulators and incumbent operators, which still account for 71 percent of the EU's €347 billion ($450 billion) telecom services market, is still too cozy and is halting vital competition, investment, and better deals for consumers.

But Reding, who is driven by a vision of a single European telecom market, rather than the current collection of 27 separate national markets, had her initial plans for a single European regulator (along the lines of the U.S.'s Federal Communications Commission (FCC) ) spurned by members of the European Parliament (MEPs) in September after a sustained campaign against her proposals by individual member states. (See Reding's Plans Rebuffed.)

The MEPs voted against Reding's plan for a so-called "super regulator," and instead voted in favor of a new European regulatory group that would be funded by the EU and staffed equally by representatives from the national regulators and by new recruits hired by the new group.

That body would not have the right to dictate regulation. Instead, the MEPs voted for a system whereby any measures proposed by individual national regulators could not be adopted if called into question by the new European regulatory group and the European Commission.

Now Reding looks set to re-introduce proposals that would give yet another new European Commission-led centralized group the right to veto proposed national regulations. This new group would be advised by, but not controlled by, representatives from the national regulators, a marked difference from the wishes of the European Parliament.

Details of Reding's new attempt to gain greater control over EU telecom regulation could be unveiled as soon as Wednesday (Nov. 5).

Speaking at the Financial Times World Telecom Conference in London on Tuesday, Ken Ducatel, a member of Reding's team, said a new "modified response" to the European telecom reform plans could be published Wednesday, if everything went to plan.

And Ducatel reiterated the Reding team's views on the negative impact of Europe's current fragmented regulatory set-up. He said the commission believes European businesses are losing out on productivity gains because there are 27 separate regulators with their own regimes, and that the lack of a powerful single telecom regulatory body is "damaging the EU" to the tune of €20 billion ($25.9 billion) per year.

All Reding's team is doing, he said, is "trying to put order to the chaos that is European telecom regulation."

If Reding does reintroduce attempts to create a centralized, EC-controlled regulator that could veto national regulatory proposals, that would fly in the face of the European Parliament's vote and jeopardize the whole of the telecom reform package that is due to go to a final vote in 2009.

The first hurdle Reding's new proposals would face is a meeting of the Council of Telecoms Ministers, which is due to meet on Nov. 27. That Council is unlikely to sanction any amendments that counter the European Parliament's September vote.

Europe's national regulators and operators know they need to take Reding seriously -- she has already altered Europe's mobile services landscape by forcing through price limits on cross-border voice calls and plans to do the same with data services. (See EU Adds Mobile Law and Reding Back on Attack.)

— Ray Le Maistre, International News Editor, Light Reading

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