Commission Goes Back on De-regulatory Agenda for Mobile
Mobile operators in Europe have responded to the European Commission's latest proposals that are intended to set the regulatory framework for electronic communications into the next decade. The chair of GSM Europe Kaisu Karvala said: "This review should be about enabling European businesses to develop in an open and competitive environment which facilitates efficient businesses delivering innovative products at fair prices."
Unfortunately, the Commission instead raised serious matters of principle in going outside of the Framework to introduce regulation of wholesale and retail international roaming markets, setting a precedent for unexpected and random future intervention in communications markets which can give no confidence to investors or operators as to the nature or level of regulatory risk they face. One of the key objectives of the Framework is to set out a comprehensive set of regulatory tools so that businesses can invest with certainty and stability. The Commission's actions to regulate outside the Framework, bring into question whether the Framework will give operators and investors the certainty that it will be the sole source of regulatory intervention in the future.
GSM Europe notes that the Commission's own study specifically states "...there were a number of indications that regulatory uncertainty was one important aspect of regulation that negatively affects investment decisions". Mobile operators believe that the Commission now needs to restore confidence in the Framework as the comprehensive source of regulation for the communications sector and so provide the certainty that encourages investment.
Whilst the Commission's proposals on the list of relevant markets for regulatory scrutiny at first sight seem deregulatory given the removal of a number of fixed line markets, this is certainly not the case for the proposed approach to mobile markets. Mobile, arguably the largest and most competitive communications infrastructure market in Europe, is instead to be subjected to increased regulation.
The Commission appears reluctant to commit to removing markets (from those listed for regular review) that have been found competitive in all but a very few Member States3 and seeks to add new markets such as wholesale SMS. The Commission frequently refers to a de-regulatory approach and the use of better regulation principles but in the case of mobile is unfortunately going in the opposite direction. "The Commission always talks about competitiveness and innovation, but instead what we get is more and more regulation. This is bad for the economy and for European consumers" said Karvala.
In general the Commission's overall aim to increase flexibility and efficiency of spectrum is welcome. However, the demonstrable merits of harmonisation and prevention of interference under the current regime should be maintained. This means a cautious and evolutionary approach and a suitable transition period.
Thus, unfortunately the small number of positive proposals for mobile operators, which are welcomed, are overshadowed by the Commission's unjustified intention to increase regulation in this competitive sector."
Posted to the site on 31st October 2006