The European Commission has warned seven EU member
states that their failure to enact a new legal regime called the
telecom package is hampering the development of high-speed
broadband services.
The commission opened legal proceedings against eight countries
last month: Belgium, Germany, Greece, Spain, France, Luxembourg,
the Netherlands and Portugal. Since then, only Spain has transposed
the telecoms package into its national laws.
The laws place much of the responsibility for regulating
markets, ranging from local telephone exchanges to e-mail servers,
with national regulatory authorities. However, the commission can
intervene if it believes fair competition does not exist in a
market.
"All competent authorities now need to do their work and further
strengthen competition in the broadband market to build on the
current momentum," said Mario Monti and Erkki Liikanen,
commissioners for competition and the information society
respectively.
"Before they can do their job," they added, "the EU legislation
needs to be transposed into national law."
The new regulatory framework is designed to get national telecom
regulators working in line with each other, helped by a
co-ordinating role played by the commission.
It started with a regulation on local loop unbundling passed in
December 2000. Since then, laws including a directive on auctioning
licences, on access and interconnection of networks, data
protection in the digital environment and a framework
telecommunications directive have been passed. They should have
taken force across the EU in July.
In spite of the poor rate of transposition of the telecom
package, the commission said the market is improving. Electronic
communications markets are expected to grow faster in 2003 than the
overall rate of growth of the EU economies.
The number of mobile subscribers will grow at a rate higher than
in 2002, despite the mobile penetration rate being close to 90% in
some member states. Third-generation mobile communication services
are now available in at least four member states and are being
launched in others.
The number of fixed broadband access lines almost doubled in the
year to July 2003. New entrants' market share is starting to pick
up, even if competition in the broadband sector is still weak.
However, the commission concluded that local loop unbundling,
designed to prise open local phone exchanges to allow competitors
to offer high-speed internet access on the same conditions as the
former telecom monopolies, has not yet taken off.
Earlier this year the commission fined Deutsche Telecom and
France Telecom's internet service provider Wanadoo for failing to
allow fair access to the high-speed internet connection market.
The number of competing operators in each national market has
remained more or less stable in recent years, the commission
concluded, but it noted that a number of operators have
retrenched in their home markets.
Competitive pressure has moved from the international and
long-distance markets to the local call segment, where the
incumbents' fixed market share has continued to fall, while
consumers have continued to benefit from price reductions for fixed
voice telephony.
"While the downward trend in prices has been maintained, the
pace in 2003 is significantly slower than in previous years and
less than half of that reported in 2002," the commission said.
Paul Meller writes for IDG News
Service