EU regulator Berec has responded in detail to the European Commission's proposals on strengthening the single telecom market. Berec's initial reaction to the proposals presented last month was that the EC had rushed through the development of the package without sufficient consultation or evaluation of the possible consequences.
The regulator has now published a more detailed opinion, after meeting with the EC to discuss the plans. While it shares the EC's overall objectives, it considers the proposals "disproportionate, and in some cases counterproductive to their stated aims".
They also represent a fundamental shift in how the sector is regulated, adding the new aim that ex ante regulation must promote the global competitiveness of the EU. This could increased the room for legal challenges to regulation, creating market uncertainty. In addition, the new focus appears to encourage market consolidation, which appears at odds with the previous goal of regulation to promote competition, Berec said. A number of elements also seem to undermine the principle of infrastructure competition in the current regulatory framework.
The regulator is also concerned about the changing balance in power, centralising it more with the Commission at the expense of the EU member states, national regulators and Berec. The motivation for this, nor its potential consequences, have been explained, Berec said.
The lack of explanation of the consequences of the EC's proposals was evident from Berec's opposition to the proposed single authorisation for operators active in multiple EU markets. Berec said this would not reduce the administrative burden for operators as claimed, but would in fact complicate the matter, introducing the new concepts of 'home' and 'host' regulator and requiring greater coordination between the national regulators.
It could also undermine the national regulators' authorities, as they would not be able to intervene the same for operators active nationally and internationally. The proposed EC veto right on decisions by national regulators affecting international operators also appears disproportionate, given the existing Article 7 procedure for challenging national decisions has been shown to work well in spreading best practices, Berec said. As an alternative, the regulator suggested a harmonised authorisation procedure be introduced across states.
Berec also sees administrative problems and possible unintended effects in the EC's spectrum proposals. A procedure similar to Article 7 for reviewing national spectrum auction plans could in fact delay, rather than speed up, the release of frequencies. It also does not recognise the political nature of spectrum decisions. The proposal to synchronise spectrum auctions could also create problems for operators, possibly limiting their ability to participate if they cannot raise sufficient capital and thus favouring larger players.
Berec, the board of which is made up of representatives of the national regulators, was also against the EC's proposal to create a harmonised wholesale broadband access service for the region. Berec said this ignores the differences in network roll-out, technology and commercial needs across Europe, and the fact that these are continually evolving over time. Such an approach "risks causing serious regulatory and market failure, and represents an unwarranted shift in the current balance of regulatory powers". If such a pan-European service model was warranted, it should be Berec that develops it, it said.
Berec was perhaps the least critical of the EC's proposals on net neutrality and consumer protection. While in general it supports these provisions, it expressed concern that the regulation not be overly prescribed and the clarity improved, in recognition of the continued development of the internet and national regulators' expertise in local markets.
Finally, the EC's proposal to allow operators introducing 'roam like home' offers to avoid application of the earlier decoupling regulation was soundly rejected by Berec. Such a proposal just a year after the decoupling regulation was agreed and a few months before it takes effect creates uncertainty in the market, undermines regulatory authority and is already limiting investment, Berec said. The proposal requires operators to provide the 'roam like home' offers in a certain number of countries in order to benefit from the exemption to the decoupling requirement, a move that favours the large operators with existing pan-European footprints. Furthermore, the proposals trade potential competition (through decoupling) for voluntary price reductions, providing no guarantee that consumers will benefit, Berec said. The regulator said it would prefer to continue down the existing path of price cuts in order to eliminate roaming charges.
