Key Notes

Telecommunication

Background: Importance of the subject - European value added

During the last decade, the telecommunications sector has been opened up to competition in all Member States. new entrants have penetrated the market, reducing the market share of incumbents, and , as a result, a substantial reduction in prices has occurred in most Member States.

In 1999 the Commission launched a major review of existing EU telecommunications law that resulted in the adoption of a new regulatory framework for electronic communications in 2002, to be applied as of July 2003. The main objectives of the review were to create a set of rules that would be simple, aimed at deregulation, technology neutral and sufficiently flexible to deal with fast changing markets in the electronic communications sector. The goals of the new framework are to encourage competition in the electronic communication markets, to improve the functioning of the internal market and to guarantee basic user interests that would not be guaranteed by market forces.

The Internet is changing the worlds we live in, and the challenge for Europe is to embrace the digital age and become a truly knowledge-based economy. The way in which the European Union manages this transition will help determine our quality of life, our working conditions and the overall competitiveness of our industries and services.

"eEurope" is the EU's scheme for guiding this process of change and for modernizing our education and conventional training systems to ensure digital literacy at school and in the workplace.


I. What does the European Union do?

The telecommunications regulatory process in the European Union (EU) should be seen as part of the wider process of the economic integration of Europe initiated by the Treaty of Rome. This process was accelerated through the European Community's internal market programme which since the mid-eighties has provided a firm basis inter alia for the development of a common regulatory framework for the telecommunications sector. The broader political framework of the Maastricht Treaty, the Treaty on European Union which entered into force in November 1993, has added an important new element to the legal basis for European integration in the area of telecommunications by means of its Title XII on Trans-European networks. The common theme of the policy mix on the development of the common market for telecommunications services and equipment which has emerged in the progressive removal of barriers to pan-European operation, service provision and equipment supply across the EU's telecommunications market (stimulated by the Green Paper) is the evolving balance to be struck between liberalization and harmonization, competition and public service.

In terms of opening up the market there are three instruments which have been used to liberalize telecom in the European Community:

• Progressive liberalization of a former monopoly sector
• Accompanying harmonization measures
• Competition rules.

The mechanism chosen to liberalize telecom in the EU was Commission directives based on Article 86 of the Treaty (ex Article 90 of the Treaty of Rome). Article 86 gives the Commission power to require the removal of special or exclusive rights granted to undertakings by Member States where other Treaty rules are broken as a result. In the telecom sector, the Commission considered that giving certain public enterprises special and exclusive rights to produce telecommunications equipment, or to provide telecommunications services and operate networks breached Treaty competition and internal market rules. The various directives abolished those rights, requiring Member States to permit the provision of competing services.


II. What has the EPP-ED Group achieved?

The EPP-ED Group believes that Telecom are very important for building a paneuropean market in the electronic communications sector, and a real internal market for telecom. This sector is moving away from a monopoly towards effective competition. In the current 15 Member States market differences still exist, so it is essential to give a role to Commission in order to achieve an internal market.

The EPP-ED Group succeeded in giving an ex ante power to the Commission to block the National Regulatory Authority's decisions on market definitions and designation of operators with significant market power. In particular EPP-ED Group called the Commission to communicate to the EP which concrete steps the Commission will undertake to ensure the rapid adoption of an open European standard or interactive television services.

EPP-ED Group asked for greater guarantees to users in terms of end-to-end connectivity and to create flexibility regarding the future development of obligations on access to digital television. Concerning 'Obligations to interconnect', the common position grants NRA's specific powers to interconnect undertakings controlling access to end-users.

In the access directive EPP-ED Group considered interoperability as a benefit for end-users, asking that prices of International roaming be based on the principles of effective competition, and that prices of call termination be based on the principles of effective competition .


III. Our goals for the next legislative period:

It is really important to facilitate the implementation of a Telecom legislation. It is also fundamental to ensure internet security which is at present a major obstacle to the development of e-business. It is an EPP-ED priority to promote better broadband connections and infrastructure and to ameliorate e-content in public administration, health care and education, in order to give easily accessible information and better services to citizens.

Facilitating the roll out of 3G telecom is a major issue for European competitiveness but is also important to allow smooth consolidation of market operators and secondary trading of 3G spectrum. It will be also necessary to set the rules for sharing a mobile network infrastructures. Promoting competition - in order to achieve economic efficiency in the interests of users and society - is one of the main objectives. However competition is not the complete answer, and is necessary to ensure that user needs are met when competition fails in order to guarantee Universal services.