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EU: telecoms framework review clears the final hurdle

Matthew Howett

EU: telecoms framework review clears the final hurdle

After almost two years of political wrangling, the European Parliament has formally approved the EU's telecoms reform package, paving the way for its adoption across Europe. Since the review kicked off, the focus and bone of contention has moved from being about functional separation and institutional bureaucracy to being about Internet rights and freedoms - something that almost threatened to return the whole package to the drawing board under a new parliament. Now that the reforms can go through as planned, they represent a victory not only for consumers but also for Commissioner Viviane Reding, whose future will be decided in the next few days.

A compromise that everyone accepts

Primarily designed to tackle the inconsistencies that have prevented a single market for telecoms, a new regulatory framework for telecoms was almost never to be. Bitter disagreement over an obscurely named amendment related to Internet rights threatened to return the whole package to the drawing board. Yet careful last-minute political manoeuvring by Reding prevented two years of work from going to waste, with parliament approving the text of the Framework Directive (which contained the controversial amendment) at the third reading following a period of conciliation. Agreement on all other aspects of the reform had been reached back in May 2009.

The all-round sense of relief at getting the package through is genuine. Aside from the issue of Internet rights, it contains many crucial elements including how regulators should approach the regulation of next-generation access networks, and how to coordinate the release of valuable spectrum. It even equips NRAs with the tool of functional separation.

Internet freedoms: a victory for consumers as Reding rules out a 'three strikes' approach

The year 2009 will go down as the dawn of a new era in the crackdown of illegal peer-to-peer file sharing. At a time when governments around the world are launching initiatives to ensure that everyone who wants broadband can have it, they are also quite prepared to take it away. First we saw the HADOPI law (dubbed 'three strikes') in France and more recently the UK's Digital Economy Bill - both of which attempt to tackle this problem.

The newly agreed Internet freedom provision deals not only with the proliferation of illegal peer-to-peer file sharing, but also clears the way for future net-neutrality provisions. The rules protect the presumption of innocence, thereby preventing the disconnection of a user's Internet connection without judicial process. Under the text, a three strikes policy (as initially proposed in France) would be a clear violation of Community law. The consequence for member states as they put forward legislation can't be understated since it significantly ties the hands of government.

The EC gains a veto on remedies, but will be constrained by the new regulators group

While the institutional reforms did not receive as much attention as expected during the negotiation process they are worth commenting on. Most notable is the new 'single market procedure' under which the EC can now express a serious concern on the remedy an NRA chooses. At the moment the Commission's say on remedies is absent. Should the EC decide to go down this route it could add an additional five months onto the market analysis process. Promisingly the EC consults throughout this process with the upgraded regulators group - the Body of European Regulators for Electronic Communications (BEREC), but could ultimately use a binding decision to achieve harmonisation if opinion is divided.

The new body itself is also interesting. Having gone through many revisions, and at least five name changes, the final authority is a much leaner and accountable institution to the one originally planned. It has the potential to strengthen the single market, particularly in the area of international services for enterprises, and transfers valuable expertise to those regulators that lack the resources of NRAs such as Ofcom, ARCEP or CMT.

Only the timelines are certain

Once the legislation has been published in the EU's official journal at the end of December, member states will have 18 months to incorporate the new rules into their national legislation. While these timelines are certain, who will be responsible for overseeing implementation isn't. The most likely contender is the hard-hitting EU competition commissioner Neelie Kroes, although another term for Viviane Reding hasn't been ruled out. Europe will need a strong willed individual and both have demonstrated this trait. Some incumbents might quiver at the thought of another five years of Reding, but they would find it hard to discredit her effectiveness.

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