The Commission has published three studies which it commissioned
into the state of the European telecoms business, one of which
examined the prospect of increasing Commission powers over those
companies deemed to have "significant market power".
The study was conducted by Brussels-based Hogan & Hartson
and London's Analysys and was called 'Preparing the Next Steps in
Regulation of Electronic Communications'. It was conducted to help
the Commission in its ongoing review of 2002's EU telecoms
regulations.
"The study looks at the issue, currently under discussion, to
give the Commission enhanced powers over remedies to be adopted by
national telecom regulators in case of a position of significant
market power on a specific electronic communications market," said
a Commission statement. The term 'significant market power' refers
to companies which control a certain proportion of a specific
market.
Generally a market share of 25% or more is enough to have a
company designated as having 'significant market power'. The
designation brings with it tighter regulatory control and almost
always applies to a country's former monopoly telecom supplier.
"Several respondents suggested that an enhanced Community
control over remedies would facilitate greater harmonisation and
availability of consistent wholesale products across the EU," said
the statement.
The study recognised that in some cases, national regulators may
have more difficulty in imposing themselves on incumbents than a
European institution would. It even canvassed the views of those in
the telecoms industry on the establishment of a European Regulatory
Authority (ERA).
"One argument presented in support of an ERA is that it may be
able to apply regulation in a more consistent manner and to 'stand
up to incumbents' when the current NRA may not," says the
report.
The report continues,
"Some respondents alleged that their NRA was
either lax or ineffective in imposing regulation. There appears to
be an expectation that an ERA could alleviate the negative effects
of tensions between the NRA and the government in certain
countries.
"In support of this notion, an alternative
fixed operator stated that an ERA 'would prevent or at least reduce
the possibility of political interference.' An alternative mobile
operator lamented that the 'competition protection authority is not
performing its duties,' which implies that there may be scope for
correction of a national regulatory failing."
The report concluded that more participants were against the
establishment of an ERA than in favour of it.
Another of the studies found that regulation was essential if
investment was to be attracted into the telecoms business. The
third study found that retail market regulation could largely be
done away with, and that regulation of the wholesale supply of
telecoms services is now sufficient to keep the market in line with
EU policy.
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