Last week the EU Comm-ission published a report on broadband access in the EU member states, indicating growth in the use of broadband due to increasing competition. It was also noted that the growth was marked by an increasing gap between countries with high penetration of broadband and those trailing behind. Recently, Lithuania took a huge step towards promoting broadband by issuing licenses for WiMax, which would enable introduction of high-speed mobile Internet networks in the country.
The EU Commission considers availability of broadband as the main indicator of the development of the information, communications and technology sector, therefore some regulatory measures necessary for reducing the gap are to be taken. EU Telecoms Commissioner Viviane Reding has promised that the whole set of proposals for the new EU telecom regulatory framework, including those concerning broadband, will be introduced on November 13, 2007.
What can we expect from the new framework, and will it act as a real driver for competition and investment?
First, it should be noted that the Commission considers that "in about 50 percent of the 18 regulated markets today, the case for ex-ante regulation is no longer apparent and competition law alone can be relied upon in those markets" (Reding, in a speech in the plenary meeting of the European Regulators Group, Athens, October 11, 2007). This indicates that the new framework will follow the path of deregulation, however, putting strong emphasis on the regulation's effectiveness, giving tools to the regulators that would be better suited for dealing with competition problems. The Commission is supporting the idea of a very strong independent regulator, providing national regulatory authorities with the possibility of choice in whether to regulate the particular market or not. In addition, it is planned to give the national regulator the tool of functional separation, which could help to ensure competition in those cases where other measures have failed. This tool should allow the regulator to request that the access business and service business be separated within the company, ensuring non-discriminatory network access for other market players.
This tool is expected to be especially efficient in solving the broadband problems in individual EU member states.
The second important factor the Commission will try to bring to life is the single European market for telecom operators and users. As noted by Reding, the goal is to open the Single Market, which would ensure innovation, new services and benefits for the consumer by increasing competition, cross-border services and economies of scale. An inseparable part of the reform will be the creation of the European Telecom Market Authority, which will be responsible for regulating and supervising the Single Market. The proposal to create such an authority already came under heavy criticism, as unnecessary centralization and new bureaucratic obstacles are feared.
The new regulatory package is expected to enter into force as of 2010. Meanwhile the Commission is ready to tackle some electronic communications market problems such as the previously mentioned growing gap in broadband usage, large differences in mobile termination rates in different member states, and the highly sensitive issue of intercepting voice over IP.
Tomas Ivanauskas is an advocate at Jurevicius, Balciunas & Bartkus, a member of Baltic Legal Solutions, a pan-Baltic integrated network of law firms including Teder, Glikman & Partnerid in Estonia and Kronbergs & Cukste in Latvia, dedicated to providing a quality "one-stop shop" approach to clients' needs in the Baltics.