October 3, 2007
Large telecoms operators targeted
An intriguing twist in a tale that is fast turning into one of the best dramas in the Brussels law-making machine.
It’s all to do with whether some of the biggest telecoms companies in the EU – such as Deutsche Telekom – could be forced to change the way they work, as part of efforts to bolster broadband development.
On Wednesday, the EU’s national telecoms watchdogs unanimously backed a plan that would give them the right to break up large operators if other regulatory tools had failed.
So, regulators like the idea of having more power. Big deal?
Actually, it is…
1. If approved, this "split up" measure could really open the market - so say smaller, newer telecoms operators. They’re seeking to take on the big-gun companies that used to be state-run.
2. Wednesday’s move helps to set the stage for a showdown in the European Commission between Viviane Reding, EU media commissioner who is writing the break-up plan, and critics such as Neelie Kroes, the competition supremo. The Commission decides on the proposal in November.
3. The regulators’ move on Wednesday is a classic sign of political pressure at work in Brussels. Reding has called for a new, EU-super regulator for telecoms because she thinks the existing forum doesn’t work well. And whatdoyaknow? Suddenly, the current group - known as the ERG - gets it together to back her plan unanimously.
4. Last, it will prompt more questions about whether the break-up plan would actually spur investment in new, ultra-fast broadband networks. Reding praises the UK, which has pursued this route, but now there are concerns that Britain lags other countries when it comes to building new broadband infrastructure.
As the leading broadband provider in Italy, we at Fastweb fully support Commissioner Reding’s proposal of using functional separation as a mechanism to enforce existing rules better in Europe. In particular, where competition is seriously and manifestly hindered, functional separation represents an appropriate tool to promote competition and new investments, provided it is carefully adjusted to suit the circumstances of each country.
We believe that functional separation will contribute to increasing investment in the sector overall.
Commissioner Kroes has herself verified that incumbents continue to abuse their dominant position, by retaining both high market shares and the full control over the network. Indeed, given that the Antitrust Authorities cannot counterbalance such market power by relying on ex post measures, Commissioner Kroes should, in conclusion, support functional separation as an appropriate and proportionate tool to increase competition.
Posted by: Stefano Parisi, CEO of Fastweb | October 4th, 2007 at 9:32 am | Report this commentToo much competition can of course slow down investments in expensive infrastructure - this partly explains the US’s lag in mobile telephony and the UK’s poor backbone network compared with, say, Germany.
But does Kroes really oppose the plan for any reason other than it is not her DG that is proposing it?
Posted by: d jones | October 5th, 2007 at 11:59 am | Report this commentAnother problem is some mayor Telecom’s
Posted by: blogger | October 9th, 2007 at 5:26 pm | Report this commentinstalling fiber optic to the home or the curve ,financed with their huge profits from copper, a Public Utility, and then starting to cut-off the copper,as well as the competing dsl/vdsl providers running over copper, ending up with a total monopoly trough fiber and able to charge at will and able to offer their choice of programs and content only, not the choices of consumers, who after financing copper and profits for 100 years end-up stuck with a fiber monopoly, a disaster for growth and open healthy competition …. and that’s why also an open WiFi,Wimax,White Spaces,Cognitive Radios,etc., menu of choices with options of browsers and platforms is the only way to expand Trade and Commerce growth,new jobs and wireless digital economy progress,our future way to new energy technologies,new training, new Health Industry savings,new voting systems,new industry working methods and new communication solutions.