The EU And Telecoms (Part 2)

Following from part 1 we continue with part 2 where we explore more fully EU telecoms regulations and its current situation especially regarding Flexcit.

As happens in other areas of EU competence, laid down by the treaties, member states must adhere to the telecommunications chapter of the EU acquis and are bound together by network governance and by harmonisation measures as a consequence. These span shared policies and legislation, implementation and regulation, standards and the accreditation of qualifications.

It’s interesting that what is often overlooked is the EU is a project not yet finished. It currently remains a work in progress following the engrenage (gearing) principle the well established method to engineer another leap forward in integration, the slow, salami-slicing approach adopted by Jean Monnet.

This principle has the consequence that while it continues a process of hollowing out member states competences and trying to move them up to EU level that there often occurs a period of absence of any competence at all. In this we are reminded of Booker’s comment on a criticism of evolution:

Years ago…Attenborough himself [claimed] to ‘prove’ Darwin’s theory by showing us a mouse and a bat, explaining how one evolved into the other. He seemed oblivious to the obvious point that, as the mouse’s forelegs evolved by minute variations to wings, there must have been a long period when the creature, no longer with properly functioning legs but as yet unable to fly, was much less ‘adapted to survive’ than it had been before.

For the regulation of network industries there have been delegations of powers by governments of the member states to EU institutions, notably to the European Commission (EC), but also to their own domestic National Regulatory Authorities (NRAs). This was somewhat ad hoc and piecemeal in the 1980s and 1990s, however from the 1999 Electronic Communications Services review (COM(1999) 539 final, 10.11.1999) the intentions and the outcomes increasingly concentrated on a more systematic approach.

Yet there continues to be considerable variations between member states which the European Commission and the European Parliament sought to reduce the disorder and to complete the single market for telecommunications.

As we previously noted the UK regulator Ofcom – determined to breakup BT’s monopoly further – used competition law powers under the Enterprise Act 2002 – itself a result of EU Directives – to come to an agreement with BT over a separate network access division called Openreach which would offer its wholesale products on an equivalent basis to both external customers and itself.

The establishment of Openreach and its relationship to external customers at the time was unique to the UK within the EU and its experience was studied by regulators in other European countries who experienced similar competition problems arising from the presence of a large incumbent telecommunications operator, such as France Telecom.

Viviane Reding, the European Commissioner who in 2006 was in charge of telecommunications regulation, took inspiration from the UK in forcing the “structural separation” of incumbent telecom operators into service and infrastructure divisions across the European Union.

With this in mind Reding unveiled proposals aimed at not only extending competition among telecom operators, but also the the idea of one single EU wide telecom regulator, to act as an umbrella organization for Member States’ national regulators. Reding’s proposals became the “review of EU Telecom rules: Strengthening Competition and Completing the Internal Market” which argued that:

“The most effective way to achieve a real level playing field for telecom operators across the EU would of course be to create an independent European telecom regulator that would work together with national regulators in a system, similar to the European System of Central Banks. In such a system, national regulators would continue to act as direct contact points with operators and could directly analyse the market. At the same time, a light European agency, independent from the Commission and from national governments, could ensure by guidelines and, if necessary, instructions that EU rules are applied consistently in all Member States.”

Here Reding sought to achieve “a real level playing field” by tackling what she called the three issues; Firstly the need for more internal market integration for a more effective use of radio spectrum. Falling back on the traditional EEC/EU arguments of fish, pollution or ‘climate change’ which knows no country boundaries as a reason for extending EU competences Reding relies on this regarding spectrum:

Radio spectrum itself knows no borders, but it is managed at national level, normally in an administrative, bureaucratic way that creates scarcity by prescribing in detail what every part of the spectrum may be used for in that Member State.

I also believe that we need to put the idea of a European spectrum agency on the table…we have to recognise the competitive disadvantage the EU faces because, instead of having one single regime for spectrum management and spectrum licensing, as they do in the US, we have 25 different ones.

Reding also argued that with the “switch from analogue to digital TV there is a one off opportunity to re-use the analogue frequencies for new technologies”. The second issue she addressed was better regulation:

“…a more consistent application of the EU telecom rules”. In the telecom sector, where neither technology nor economic interest nor consumer behaviour know national borders any more, I see a clear, long overdue need to make the internal market a reality also in regulatory terms”.

The third proposal was that there should be no “regulatory holidays” in the face of technological advances and with the liberalisation of the telecoms market should come “structural separation”:

Structural separation means that telecom regulators could require a dominant operator to provide non-discriminatory access to all operators by separating infrastructure provision from service provision to a greater or lesser extent. Today, the EU rules in force do not foresee structural separation as a regulatory remedy on the telecom markets. But I see that the United Kingdom, which has opted for a form of structural separation at national level, has made good experiences with this remedy. 

Her legislative proposal was for a European Electronic Communications Market Authority (EECMA) in which the EC sought a formal cooperation structure to remedy the lack of coherence within the internal market, which included “a fragmentation of European markets” and the absence of mechanisms for authorising cross-border services (e.g., mobile and IP-based services).

This proposal was significantly reshaped by the Parliament (which increased its own influence as a consequence) and the Council and, via Regulation (EC) No 1211/2009, became the Body of European Regulators of Electronic Communications (BEREC):

The main objective of this body is to enhance cooperation among national regulatory authorities (NRAs) and to strengthen the internal market in electronic communications networks.

BEREC consists of NRAs members where each is nominated per Member State. (NRAs from the European Economic Area (EEA) States only have observer status and are represented “at an appropriate level”). Thus BEREC consolidated the “official” status of NRAs despite having no democratic credentials.

BEREC itself conducts its business in secret and it attempts to justify this by claiming that there is often a special requirement to avoid public scrutiny and stakeholder involvement. We can see this secrecy, or ‘independence’ officially laid out under Regulation (EC) No 1211/2009 Article 4: Composition and organisation of BEREC:

The members of the Board of Regulators shall neither seek nor accept any instruction from any government, from the Commission, or from any other public or private entity.

In addition, there is a lack of clarity whether its decisions and opinions can be challenged in the EU courts alongside that it is unaccountable before the EU parliament, giving it a democratic and judicial deficit. Even the mechanism for engagement with BEREC is through consultations on terms determined by the organisation itself.

Aside from BEREC, further complications in European telecoms governance arise from earlier attempts at European harmonisation mechanisms via European Regulatory Networks (ERNs).

ERNs were established particularly with network sectors in mind; designed to respond to the multiplication of regulators and their uneven development. ERNs were an attempt to address by the need for greater co-ordination in implementing  regulation by member states. 

However within the institutional design of ERNs lies their genesis. Their design reflects acutely the difficultly of trying to move from national governance to one of supranational governance. Having been given grandiose tasks, the European Commission and national governments still maintained many powers. Here then we see the creation of double delegation, with powers “delegated up” from the NRAs and “delegated” down from the EU with the inevitable result of dissatisfaction:

The EU’s ‘double delegation’ to IRAs and the EU Commission has led to major and as yet unresolved problems of coordination and implementation.

Thus this means that ERNs can be seen as a ‘second best’ method of dealing with implementation of EU regulation; a compromise between EU ‘colleagues’ pressing for greater European integration and those member states, especially national governments, reluctant to endorse it fully. The compromise inevitably means that while more uniform regulation by coordinating approaches and functions was the intention, there has been little evidence of success in harmonisation and no attempts even to measure the effectiveness of the measures.

But within ERNs remains legacy EU regulatory telecoms governance that sits alongside and is distinct from BEREC, and this is apparent in the various EU bodies such as the Radio Spectrum Committee (RSC);

The Radio Spectrum Committee (RSC) is responsible for specific technical measures required to implement the broader Radio Spectrum Policy. The RSC is composed of Member State representatives and chaired by the European Commission.

Established by the 2002 Radio Spectrum Decision (676/2002/EC), the Radio Spectrum Committee (RSC) is assisting the Commission for the development of technical implementing decisions to ensure harmonised conditions across Europe for the availability and efficient use of radio spectrum.

…and the Radio Spectrum Policy Group (RSPG) which enables Member States, the Commission and stakeholders to coordinate the use of radio spectrum.

Here we can see that unlike the secret nature of BEREC, bodies such as the RSC and the RSPG within ERNs involve extensive consultation amongst all stakeholders, which include “regulatory authorities and the ministries having responsibility for radio spectrum related matters in each Member State”, manufacturers, network operators and users.

RSC and RSPG are also part of the comitology process which allows the Commission to discuss its proposals with national administrations before implementation in order to ensure that any measure is optimised to the various national situations. Thus under these rules the following associations are permitted to be consulted:

Consumers:
The European Consumer Organisation (BEUC) – which brings together 40 European consumer organisations from 31 countries (EU, EEA and applicant countries). 

International Telecommunications Users Group INTUG – an international association of business users of telecommunication.

Operators:
European Communities Trade Mark Association ECTA – which in addition to having close links with the European Commission and the Office for Harmonization in the Internal Market (Trade Marks and Designs) (OHIM), ECTA is recognised by WIPO as a non-Government Organisation (NGO).

European Telecommunications Network Operators’ Association  ETNO – who are pan-European operators and has been the voice of Europe’s telecommunications network operators since 1992

GSM Association GSMA– is an association of mobile operators and related companies devoted to supporting the standardising, deployment and promotion of the GSM mobile telephone system.

Manufacturers:
Digital Europe

We can see therefore that even under EU telecoms governance and the comitology process there is extensive consultation with international associations. A further example can be seen with the European Conference on Posts and Telecoms (CEPT). CEPT extends far beyond the EU, including the countries of the former USSR and currently includes 48 countries in its membership.

And it is with international relationships with the EU we will examine further in part three. But first we will look at the EEA agreement where although there is commitment to adhering to the EU telecommunications acquis there is more flexibility with regard to the implementation as per the EEA agreement.

And it’s with the EEA’s relationship regarding telecoms and the EU where we turn our attention to next.