EU to revamp telecom legislation

Changes in the European telecommunications market have prompted a radical rethinking of legislation in the European Union, Enterprise and Information Society Commissioner Erkki Liikanen said.

"We need to promote greater competition, respond to rapidly changing technology and cut back on red tape," the Commissioner said, as he introduced a package of documents aimed at giving Europe a flexible and lightweight legislative framework for telecommunications in the future.

If EU telecom ministers and industry endorse the strategy contained in the documents included in the Communication announced - "Towards a new framework for Electronic Communications Infrastructure and Associated Services" - the EU will gradually move to eliminate telecom-specific legislation and allow antitrust law to determine the legality of market practices and conditions, Liikanen explained.

In the meantime, however, the Commission plans to cut back on red tape, mainly by reducing the number of EU telecom-related laws, from the current 20 to six, within three years. Concrete legislative proposals could surface in the first half of next year. These could include a single framework directive covering continued liberalization of the market and accompanied by five so-called harmonisation laws to cover licensing procedures, universal service requirements, data protection, access to the networks and interconnection, Commission experts who asked not to be identified explained.

The strategy results from a year-long review of existing EU telecom rules to determine how to adapt EU directives to current market conditions. The EU has already introduced rules to break the hold that national monopolies held over the telecom market. These rules have led to increased competition, job creation and a reduction in tariffs, Liikanen said, adding that electronic communications now account for one out of four new jobs in the EU.

However, despite the positive achievements, Liikanen stressed, "We cannot rest on our laurels, notably as regards the continued high price of local calls." Liikanen said that local calls "represent the gateway to internet access for consumers."

As a result, in the near future the Commission will focus on efforts to bring these prices down, notably by encouraging EU countries to ensure that the former monopolies unbundle their local loops - lease out local network elements to competitors.

Industry representatives generally welcomed the Commission's non-interventionist objectives and confirmed its analysis. "Existing rules are based on the monopolistic situation (that characterised the EU market before 1998), but now the market has changed due to globalization and new technologies, so clearly there is a need for a different approach," said Adrian Whitchurch, manager of European Regulation for British Telecommunications.

"The market of the future should have as few rules as possible with anti-trust laws regulating the situation, but we cannot move ahead too fast, particularly since some of the existing rules are not yet all enforced," Whitechurch said.

A detailed report of EU countries' compliance with current liberalisation laws is expected to be published tomorrow.

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