European Commission Sees Active Role in Shaping Telecom Competition

The European Commission will continue to take an active role in shaping the relationship between regulation and competition in the electronic communications sector, said Mario Monti, European Commissioner for Competition Policy, speaking at the European Competitive Telecommunications Association (ECTA) conference last week in Brussels.


While acknowledging that electronic communications are increasingly the engine for overall economic growth, Monti highlighted two areas in telecom where competition has not taken hold. First, local loop unbundling is not taking off across the EU. Second, as to development of broadband in many EU countries, the dominance by the incumbent of the local loop is being extended into both the wholesale and the retail broadband markets.


Monti said "the aim of regulation is, or should be, creating a pro-competitive environment in the long term, by remedying the most visible market failures in each relevant market." However, he said he believes there is not necessarily a contradiction between access-based and facilities-based competition. In the short term, some incentives should be provided to help competition take hold, but in the long term, "the regulatory framework should privilege operators which base their competitive advantage on building their own infrastructure."


Monti cited several ways in which the EC is helping to shape the market. For instance, the EC has taken the view that bit-stream services are a useful complement to local loop unbundling, but also that they must be characterized as "access services" -- which are differentiated from end-to-end services. As for concrete actions, Mario noted that the EC and its National Regulatory Authority (NRA) partners have worked on 31 cases, 17 of which have already been closed. Examples include a decision in May 2003 on Deutsche Telekom's pricing strategy for local access to the fixed telephony network, and a decision in July 2003 regarding the predatory retail ADSL pricing strategy of France Telecom's subsidiary Wanadoo.http://europa.eu.int/