Reding Plays Hardball Over Telecoms Regulation

So Commissioner Viviane Reding has decided to play hardball over telecoms reform. Some weeks ago we discussed how the Commission’s proposed telecoms package would hand over extensive new powers to Brussels.

The European Parliament watered down these proposals in first reading, but it seems that the revised version to be sent to the Council gives little ground on the core issue.

As if to remind the member states just how hopeless their regulators can be, the Commission has demanded that the Belgian regulator should do something about Belgacom.

Belgium’s incumbent operator has retained the lion’s share of residential telecoms business despite a liberalised market and has actually increased its market share for business users by value and by volume.

The message seems to be that competition policy has not done its job. The Commission wants action. This is regulation, raw in tooth and claw. What’s more, it enhances the Commission’s image as defender of the consumer – excellent public relations which build on Reding’s assault on the mobile operators’ text and roaming charges.

In last week’s Venice speech to the incumbent operators Reding set out her philosophy quite clearly, emphasising that the virtues of regulation had recently become rather widely recognised in the context of the credit crisis. No apologies there, then.

So the Commission has given little to the Parliament on the issue of control. The main change to her proposals seems to be the creation of an Office for the European Telecoms Regulators (OETR) managed by a 12-strong board, half of them appointed by the Commission and half by member states. The European Regulatory Group (ERG) would apparently have an advisory role and the Commission would retain a veto over the decisions of national regulators, albeit with some OETR involvement.

Some loss leaders have been abandoned or modified, such as previous proposals on network security, spectrum and policing of the internet, but when telecoms ministers meet on November 27 we can expect some fierce skirmishing in defence of national regulators before a qualified majority can be achieved, and maybe further hastily convened Council meetings before the end of the French  presidency.

The package is scheduled to go to second reading in the Parliament in April 2009. The question for Reding is, can she get such a tough package through before the June elections?