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					          Review of the EU
 regulatory framework for
electronic communications

                                                      Paraskevi MICHOU
                                            European Commission
                                      Information Society & Media
                    Directorate Electronic Communications Policy
                                                          Brussels




22 May 2008 - 3rd Black Sea and Caspian Regulatory Conference
               The EU Telecom Framework
                working for the consumer
• Public Policy Provisions – to meet general
  interest objectives
            quality of service, security,
              privacy
            universal service
            consumer’s rights

• Economic Policy Provisions – to enable the
  transition to competition
            choice, price, quality and
              innovation
            ex ante regulation
22 May 2008 - 3rd Black Sea and Caspian Regulatory Conference
     The Regulatory Approach in
           Economic Regulation

•   Based on Competition Law Principles

•   Absence of effective competition as a threshold for
    regulation

•   No « regulatory holidays »

•   Competition as a driver for innovation and
    investment

•   Market analysis procedures as a basis for regulation

•   Technological mentality – Regulation of markets not
    of infrastructures
22 May 2008 - 3rd Black Sea and Caspian Regulatory Conference
     EU Economic Environment –
      A large and dynamic sector
     • Electronic communications
       services in 2007:
          – Investment exceeded €50 billion
            representing an increase over
            2006
          – Sector worth over €293 billion
          – In most EU markets the picture is
            one of increasing volume and
            falling prices


22 May 2008 - 3rd Black Sea and Caspian Regulatory Conference
                               Broadband Penetration –
                                       A success story

                                                            EU Broadband penetration rate (January 2008)
 40%

 35%




                                                                                                                                                                                                                          35.6%
                                                                                                                                                                                                                  34.6%
                                                                                                                                                                                                          34.2%
 30%




                                                                                                                                                                                                  31.2%
 25%




                                                                                                                                                                                          25.7%
                                                                                                                                                                                  25.6%
                                                                                                                                                                          25.4%
                                                                                                                                                                  23.8%
                                                                                                                                                          23.3%
 20%




                                                                                                                                                  21.2%
                                                                                                                                          20.0%
                                                                                                                                  19.0%
                                                                                                                          18.3%
                                                                                                                  17.4%
                                                                                                          17.3%
                                                                                                  17.1%
                                                                                          16.9%

 15%
                                                                                  16.1%
                                                                          15.0%
                                                                  14.6%
                                                          14.2%
                                                  13.8%
                                          13.7%




 10%
                                   9.8%
                            9.1%
                     8.8%
              8.4%
       7.6%




  5%

  0%
       BG     PL     SK     EL     RO     LT      CY      HU      CZ      LV      PT      MT      IT      SI      IE      ES      AT      EU27    EE      FR      DE      LU      BE      UK      SE      NL      FI      DK




Data for Estonia, France, Lithuania, the Netherlands and Austria as of October 2007.


   22 May 2008 - 3rd Black Sea and Caspian Regulatory Conference
                                  Mobile sector – growing to
                                          even higher levels
                                                 Mobile subscribers penetration in EU (2G and 3G)

                          600                                                                            111.8%      120%
                                                                                103.2%

                          500                              95.0%                                                     100%
                                       84.6%

                          400                                                                                        80%




                                                                                                                            EU penetration rate
 Million of subscribers




                          300                                                                                        60%




                                                                                                           553.46
                                                                                   478.38
                                                             436.68
                                       386.61




                          200                                                                                        40%


                          100                                                                                        20%


                            0                                                                                        0%
                                    Oct. 2004            Oct. 2005             Oct. 2006               Oct. 2007

                                                EU subscribers                                 EU penetration rate
Source: Commission services based on NRA data and EMC




                          22 May 2008 - 3rd Black Sea and Caspian Regulatory Conference
                                              Mobile Termination Rates
                                                   Interconnection charges for call termination on mobile networks
                                                            (national average on the basis of subscribers)
                                                                     EU average Oct. 2007: 9,67 €-cents



                     20

                     18

                     16

                     14
€-cents per minute




                     12
                                    18,82




                     10
                                                       16,84
                                                       16,82




                                                                                                     16,00
                          15,53




                      8


                                                                                                  13,97
                                                                       13,47
                                                                      12,80
                                                                     12,40




                                                                     12,17




                                                                                               11,82
                                                                                               11,67
                                                                                               11,61
                                                                                               11,57

                                                                                               11,48
                                                                    11,44
                                               11,38
                                               11,37




                                                                                              11,37




                                                                                              11,00
                                                                                              11,00
                                                                   10,96




                                                                   10,95
                                              10,86




                      6




                                                                                             10,61
                                             10,57




                                                                                             10,55
                                                                                            10,43
                                                                                            10,43




                                                                                            10,38
                                                                                            10,10




                                                                                            10,06
                             9,91




                                             9,90




                                                                  9,81
                                                                  9,68




                                                                                            9,64
                                                                                           9,12
                                            9,11




                                                                                          8,98




                                                                                          8,94
                                                                                          8,82
                                                                                         7,96
                                                               7,81




                                                                                        7,57
                                                                                        7,51




                                                                                        7,33
                                                                                        7,18
                      4




                                                                                       7,07
                                                                                       7,03
                                                                                      5,98
                      2
                                                                               2,22
                                                                               2,06




                      0
                           BE BG CZ DK DE EE EL ES FR IE                   IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI   SE UK


                                                 October 2006           October 2007         EU average (Oct. 07)



                     22 May 2008 - 3rd Black Sea and Caspian Regulatory Conference
 Achievements of regulation –
                 Conclusions
• Withdrawal of regulation in some markets
  and some regions
• Investment, innovation and growth:
  increased EU penetration in broadband
  (20%) and mobile telephony (111 %)
• Lower prices and more transparency for
  consumers

• BUT :
     – barriers to the Single Market
     – bottlenecks
     – more consistency in remedies needed


22 May 2008 - 3rd Black Sea and Caspian Regulatory Conference
                                 Proposals for change
                                         (June 2006)


• Spectrum management
• Streamlining market reviews
• Consolidating the internal market
• Strengthening consumer protection and
  user rights
• Improving security
• Removing outdated provisions


    22 May 2008 - 3rd Black Sea and Caspian Regulatory Conference
                                     Summary of
                               November Proposals
                                     – main aims



• Strengthen competition

• Improve consistency

• Complete the internal market



22 May 2008 - 3rd Black Sea and Caspian Regulatory Conference
         Main Proposals for Change

• Strengthening consumer rights
• More choice through more competition -
  reinforced tools for regulators
   –   e.g. Functional Separation

• Promoting the wireless economy
   – better radio spectrum management

• Significant deregulation of markets but increased
  consistency in regulation
   – 50% reduction in regulated markets

• A European Authority – working towards a single
  market in telecommunications

 22 May 2008 - 3rd Black Sea and Caspian Regulatory Conference
                Strengthening consumers’
                                   rights

• Improved price transparency
• Number portability: max 1 working day
• Enhanced emergency access via «112»
• Easier access for users with
  special needs and disabilities



 22 May 2008 - 3rd Black Sea and Caspian Regulatory Conference
                           Functional Separation


• Aim is to ensure fair and equal access
  to bottleneck network assets
• Entails separate management of an
  operator’s infrastructure and retail
  operations; does not imply ‘ownership
  unbundling’
• To be used where justified; not
  appropriate in all Member States

22 May 2008 - 3rd Black Sea and Caspian Regulatory Conference
                       Promoting the wireless
                                    economy

•    Ease access to spectrum
•    Strengthen principles of technology and
     service neutrality
•    Designate bands where EU wide
     spectrum trading would apply
•    Encourage licence-free spectrum use
•    Harmonisation where appropriate to
     create a level-playing field
    –     harmonisation of authorisation conditions and common
          selection for pan-European services


22 May 2008 - 3rd Black Sea and Caspian Regulatory Conference
                Regulate less, but more
                             effectively

• Less regulated markets
• Focus on key bottlenecks
• Better and faster remedies
• Stronger and more independent
  national regulators




22 May 2008 - 3rd Black Sea and Caspian Regulatory Conference
            New Recommendation on
                  Relevant Markets
 • Significant deregulation of markets: 18 to 7

 • Developments since 2003: Effective regulation of
   wholesale products – Roll-out / Upgrade of
   infrastructures
 • Deleted markets:
      –   Retail markets
      –   Transit markets
      –   Trunk segments of leased lines
      –   Mobile call origination
      –   Broadcasting transmissions

 • Three-criteria test as a threshold for regulation
 • Focus on key bottlenecks: e.g. broadband, mobile
   termination.

22 May 2008 - 3rd Black Sea and Caspian Regulatory Conference
       Commission oversight with
             regard to remedies

•   Experience with current Commission oversight role: the
    regulatory approaches for market definition and market
    power analysis have converged to a large extent

•   However: Less consistency across the EU with regard to
    remedies than has been achieved in market definition
    and SMP analysis
     – Differences in remedies are not always justified by
       diverging market conditions
     – The most efficient remedy is not always chosen
     – Sometimes similar regulatory remedies but different
       methodologies - e.g. cost modelling

•   Extension of oversight to content and timing of
    remedies


22 May 2008 - 3rd Black Sea and Caspian Regulatory Conference
       European Telecoms Market
                       Authority
• Improved institutional basis

• Organisational advantages / Synergies (ENISA)

• More efficient participation of NRAs

• Main tasks:

           - participate in market analysis proceedings
           - transnational markets
           - participate in spectrum policy measures
           - ETNS / Number Portability
           - Network and information security

22 May 2008 - 3rd Black Sea and Caspian Regulatory Conference
                                                                Outlook
• Commission proposals to be approved by EP
  and Council
• EP elections in Spring 2009
• Commission Communication on Universal
  Service
• Recommendation on termination markets
  (2008)
• Recommendation on access to Next
  Generation Networks (2008)
• Revision of Commission Recommendation on
  Art 7 procedures (2008)

22 May 2008 - 3rd Black Sea and Caspian Regulatory Conference

				
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