Mrs. Reding began by emphasising the role of the Reform of the EU Regulatory Framework for Electronic Communications Networks and Services (Telecoms Package) in the stocktaking of past achievements and future requirements. She then continued by explaining the full content of the Reform as described below:

New regulatory tools to ensure effective competition
According to the conclusion the European Commission (EC) drew from the Reform, effective competition is the key to success. Therefore, the EC’s aim with the Reform is to ensure a level-playing field for the sector; in other words, to provide fair rules for competition, enable companies to offer cross-border and pan-European services, and promote investment in new technologies and services. Mrs. Reding stressed that regulatory efforts in areas where competition is slow and where bottlenecks persist must be accelerated. Thus, the EC is proposing to provide National Regulators the authority to apply functional separation. In the EC’s belief, functional separation will remove the incentive to discriminate between service provides, especially in such cases where discrimination cannot be resolved by behavioural remedies.

Incentives for investment in new infrastructures
Mrs. Reding stated that the “EU Framework is based on networks and services competing with each other in a technologically neutral way”. She emphasised that only “appropriate’ ex ante regulation should be imposed, and that the remedies must be differentiated for the investors to receive sufficient returns on their investments. In connection, the EC will issue by summer 2008 the guidelines on the application of the EU rules to aspects of new fibre investment in the local access network.

The need for regulatory consistency
According to Mrs. Reding, having 27 regulators with each imposing its own idea of good regulation and the lack of power on the side of the EC to interpose on the remedies do not entice new investment. “Operators often face inefficient, delayed and inconsistent remedies”, she stated, and continued by highlighting that this can distort competition and inhibit cross-border and pan-European operations.

A European Telecoms Authority: a necessary tool to achieve a true Single Market in Telecoms
Mrs. Reding stressed that inconsistency not only results in additional costs for operators, but that it also interferes with fair competition and might hide regulation. In particular, inconsistency in her opinion makes communication services uninventive and expensive for consumers. Thus, the EC is proposing to create a European Telecoms Market Authority that will exercise real authority and that will be equipped to face today’s challenging regulatory issues. The role of this Authority in the reinforcement of the Single Market is three-fold:

1. It is to provide coherent and consistent regulation
2. It is to deal with cross-border regulatory issues
3. It is to supervise and protect the interests of consumers and end-users.

Recommendation on Relevant markets: sending a strong signal for better, more focused regulation
With the Reform, Mrs. Reding wants to emphasise deregulation. This was the reasoning especially behind the reduction of the markets suitable for ex ante regulation from 18 to 7. Mrs. Reding reminded that: “The Commission has to remain true to the underlying rationale of the EU’s Regulatory Framework, which is to dispense with ex ante regulation when there is effective competition on a market”.

New spectrum rules for the wireless economy
To end, Mrs. Reding emphasised the EC’s desire to also tackle with the Reform the inefficiencies in spectrum management. The aim is to make technology and service neutrality the binding principles for the management of spectrum. Yet, she did indicate that certain well-defined exceptions would also be allowed. In addition, Mrs. Reding stressed that with technology neutrality minimum rules are nevertheless needed, but that these should only safeguard public health or to manage interference issues. She also highlighted that: “The introduction of service neutrality is not an attempt to constrain the role of broadcasting in Europe”. Having technology and service neutrality at the core of the spectrum reform indicates, in her opinion, that individual licenses are no longer needed. However, in cases where individual licenses can be justified, Mrs. Reding believes that trading in spectrum usage rights will enhance flexibility.

For Commissioner Reding’s full speech, please click here.