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TINF 2010

Tuesday 30 November 2010

Present and Future Regulation of Electronic Communications

Vesa Terävä

European CommissionInformation Society & Media

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Where we come from

Over the past ten years EU telecoms markets have witnessed increasing competition Facilitated market entry Substantial consumer benefits (lower prices, wide

range of communications products) Fixed sector

Market entry of new players has gradually chipped away the entrenched position of former monopolists

Alternative infrastructures, in particular cable has emerged as an alternative in many markets

Regulated access to local access networks has allowed greater competition in broadband markets

Mobile sector Development under the auspices of competition Rapid growth, fuelled by high demand

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Where we are

• 2002 framework successful, but…

– Lack of consistency in national implementation

– Need to complete the single market for electronic communications

– Need to take account of market and technological developments (foster development of broadband)

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Where we are

Still a number of bottlenecks at access level

In concentrated markets with high barriers to entry new entrants face difficulties in gaining toehold in the market

Significant barriers to switching

Cost of certain basic communications services remain high

Internal market remains incomplete: Few operators seeking to expand their service offering

across the whole EU

European citizens cannot yet benefit from telecoms services on a genuinely European-wide scale

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Revised regulatory framework

• Reform Package adopted – 25 November 2009

• BEREC established – 7 January 2010

• National transposition – by 25 May 2011

• Date for application of national laws transposing Better Regulation Directive - 25 May 2011

Effective implementation of the revised regulatory framework is a key to improve consistency and to achieve the single market

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Future challenges

• Technological and commercial convergence

– Convergence between mobile and fixed• Mobile voice represents 47% of all minutes • Smartphones fuel mobile data usage – currently growing

at the rate of 131% p.a.

– Convergence between broadband and cable networks• Bandwidth available over cable is on par with other NGA

networks

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Future challenges

• Increasing maturity and rigidity of the EU telecoms markets

– Difficulties faced by operators in further growing revenues and profits

– Fixed broadband penetration approaching even 80% of households

– Mobile penetration close to saturation

– Declining revenues from traditional voice

– Increasing data traffic does not necessarily translate into higher revenues

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Future challenges

• However, growth and increasing importance of the internet continues– Innovation takes place largely outside

the physical transmission (search platforms, social networks, device platforms)….

– …and outside EuropeChallenge for EU regulatory policy

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Regulatory answers?

• Competition, openness and innovation in the EU single market– Regulation

• More focused and more granular regulation• New access remedies to reflect the technological and

market developments (e.g. fibre unbundling and enhanced bitstream remedies)

• Potential regulatory response to bundles• In the absence of infrastructure based competition

equivalence of wholesale inputs to be considered• Pricing regimes which reward investment risks

– Mobilising spectrum• More harmonised EU-wide approach

– Consistency of regulation• Fully operational BEREC

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Regulatory answers?

• Empowering the citizen

– Facilitate switching• Consumer continue to face difficulties when seeking to

switch products or services

– Ensure competitive and affordable cross-border communications services (e.g. roaming) • to enable citizens to benefit from free movement and

seamless communications services in the EU

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Regulatory answers?

• Cultivating the internet ecosystem

– Openness of the internet• Consumer transparency (traffic management

policies)• Quality of service - supervision by NRAs• NRAs to promote end-users’ ability to access and

distribute information and run applications and services of their choice

– Privacy and trust• Personal data breach notification• Spam: right of action• Principle of transparency for cookies

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Thank you for your attention !