EU Applicants Slow to Adjust Telecom Rules

The 13 new applicant countries for European Union membership have a long way to go before successfully aligning their telecommunication laws with EU regulations, the Commission revealed in a series of reports last week.

Although all the countries have a high penetration of fixed and mobile telecommunication lines, most are still in the process of changing legislation to allow competition. In addition to making their telecom industries more competitive, the applicants will also need to adopt 25 EU telecom directives, including at least partially privatizing their national telecom monopolies. The applicants also need to create independent telecom regulatory authorities.

Even in countries, such as Poland, where governments have made considerable progress in adopting the necessary laws, effective implementation of the new laws is lagging far behind, the Commission said.

In March 1998 the Union opened formal membership negotiations with the Czech Republic, Cyprus, Slovenia, Estonia, Poland and Hungary. Last week the Commission proposed to launch formal negotiations in December with another six countries Malta, Slovakia, Latvia, Lithuania, Romania and Bulgaria. Turkey is also a candidate country, but formal negotiations cannot start until its government has fulfilled the political requirements of membership including respect for the rule of law and its minorities.

Although there is no deadline for entry, Enlargement Commissioner Gunter Verheugen believes that the most advanced countries could join the EU from 2003.

In order to be admitted for membership, all candidate countries must enact and implement all EU rules. Enlargement negotiations consist essentially of determining whether the applicant has fulfilled this task, and where necessary, agreeing to so-called transition periods that give the applicant extra-time after membership to apply the rules.

Cyprus, for example, had initially requested a transition period for telecom liberalization, but announced earlier this year that it will introduce full competition in the sector from January 2003. Cyprus has a telecom penetration rate that is higher than the EU average, according to the Commission.

For the last two years the Commission published annual reports on progress made in each applicant country toward implementation of EU rules. The 1999 reports reveal progress but continuing problems.

Bulgaria, for example, adopted a new Telecommunications Law in 1998 which goes a long way to introducing EU rules. The law has brought in full competition on all services except voice telephony and leased lines which will be opened to competition from January 2003. Hungary also has adopted several regulations to align national law with EU standards, and it has completed privatization of the incumbent network operator, MATAV.

Some countries have significantly further to go than others.

On the other end of the spectrum, Malta has not even started the process towards adopting EU regulations, although it has promised to open of voice telephony services to full competition by January 2003 at the latest. And in Slovenia, progress towards liberalization is still insufficient according to the Commission notably because the decree on public telecom services which extends the exclusive rights of the public network operator, Telekom Slovenije, to the infrastructure for data communications and multi-media applications is still in force.

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