EU Telecom Rules Set for Big Changes

Significant changes in telecommunications over the past year could lead the European Commission to urge changes in European Union laws, and speed up the timeframe for revising regulations covering the cost of leased lines, a senior European Commission official said today.

"The transformation of the sector is such that even if not legally required to review our legislation in 1999, it would be a good idea," according to Nicholas Argyris, who heads the Communication Unit of the Commission's telecom and innovation division. Argyris spoke at the Telecommunications and EC Competition Policy conference here organized by IBC, the London-based information and conference-organizing company.

At the end of October, the Commission will present its conclusions to the year-long review which will then be discussed by EU telecom ministers during their meeting on Nov. 30.

The review takes place against a background of general satisfaction with the pace of deregulation in the EU which required all member states except Greece and Portugal to end any remaining restrictions on the provision of telecom services by January 1, 1998. That same deregulation required the Commission to carry out a review in 1999 in recognition that increased competition would change the market and thus probably require related changes to the regulatory framework.

Argyris identified the convergence of the telecom, audio-visual and information technology sectors as the prime force behind the transformation and the need for a new look at regulations.

"It is clear that we must now move to a homogenous treatment of all transport services while keeping separate rules on content," Argyris explained. This would mean that whether delivered over the internet or on the traditional phone, voice telephony would be subject to the same rules.

The Commission review takes a look at the roughly 25 pieces of EU telecom legislation and what modifications are necessary to take into account the changing market place. It examines for example the possible need to expand the definition of universal services to include high-speed internet access for schools; the need to simplify licensing systems for operators to facilitate pan-European access and to explore what changes are needed to promote the growth of the Internet, notably a reduction in the cost of leased lines, he explained.

If telecom ministers endorse the Commission conclusions on these and other issues, the Commission will come forward with legislative proposals in 2000 which would not be implemented before 2003.

Faced with this typical and lengthy legislative timing, Argyris stressed that some issues, notably regarding leased lines and licensing can not wait. As a result the Commission will, for example, come forward by the end of the year with a Recommendation on leased lines which would explain to companies what the Commission views as acceptable price levels.

The high cost of leased lines are particularly damaging to the growth of the Internet, Argyris said.