ECTA Comments on EU

ECTA welcomed Commissioner Reding’s proposal to strengthen competition in the telecoms sector

June 28, 2006

2 Min Read

BRUSSELS -- The European Competitive Telecommunications Association (ECTA) today welcomed Commissioner Reding’s proposal to strengthen competition in the telecoms sector. In particular, ECTA welcomed the debates on separating incumbents’ infrastructure and services businesses and on broadening the availability of radio spectrum. However, ECTA cautioned that the proposals to reduce regulation in the retail sector before competition is sustainable could back-fire.

ECTA believes that one possible model for separation would be one that is based on functional separation. This is a system that has recently been introduced in the UK, and should, if effectively implemented, result in an environment that encourages competition. A European-wide precedent also already exists in the energy sector, where Member States were required to separate network functions from other services. ECTA also supports the approach to the use of radio spectrum promoted by the European Commission, and the concrete measures that will lead to more flexible use of spectrum.

ECTA further welcomes Mrs Reding’s clear position against any “regulatory holiday”, which is a concept invented by incumbent operators to free themselves of any regulation as soon as they upgrade their networks, for example with the move to optic fibre.

While welcoming the proposed removal of unnecessary regulation, ECTA remains concerned that the timing of some of the deregulatory proposals may be premature. In particular, removing regulatory protection from retail markets before a more permanent solution is found to prevent incumbents abusing their powerful position could leave competitors vulnerable to retaliatory action. ECTA believes that competition law is too slow and ill-adapted to deal with these kinds of issues in sectors with structural and legacy competition problems.

Steen Clausen, Managing Director of ECTA, said, “We are delighted that the Commission has reaffirmed the importance of competition in driving investment and innovation, and is committed to examining solutions that might address competitive problems at their core. But the proposal as it stands may mean that by removing critical retail markets from regulatory protection, the Commission could put in jeopardy the many benefits consumers have already enjoyed as a result of the Framework as it exists today.”

European Competitive Telecommunications Association (ECTA)

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