Council Scuppers Transfer of Telecoms Power to Brussels

It seems that any major transfer of power from the national level to the European Commission for EU telecoms regulation has been scuppered by the Council of Ministers.

Commissioner Reding had threatened ten days ago to withdraw Commission proposals if ministers refused to go along with them, but the Council’s political agreement on November 27 was unanimous (albeit with abstentions by the Dutch, the Swedes and the Brits), so will form the basis of negotiations with the European Parliament. Gone are the proposed Commission veto on decisions by national regulators, the extensive liberalisation of spectrum access and the functional separation between network and services.

The Commissioner accepted the deal philosophically after what she described as a “constructive crisis” in the Council  – I suppose the political equivalent of “creative destruction”.

It was not all bad news for Viviane Reding. She did win agreement on a price ceiling for roaming text messages (€0.11 as from July 2009 compared with the current average of €0.29) and for data transfer. The price limits on voice calls was also extended by three years to 2013 and the mobile operators must switch to charging by the second.

We can forget about EECMA, IRG and ERG. Assuming that Parliament and Council can agree a compromise – which is essential if legislation is to be agreed before European elections – we will have a new friend called GERT (Group of European Regulators in Telecoms). GERT will remain a private body rather than an EU entity and the Commission will have only limited powers to contest decisions by national regulators after taking “utmost account of the opinion of the GERT before issuing a decision and/or issuing a opinion”.

The tension between regulation and competition policy has been quite a feature of the whole debate and I was interested to see that the Council states its aim to progressively reduce ex ante sector-specific rules (ie regulation) “as competition in the markets develops and, ultimately, for electronic communications to be governed by competition law only”. Music to the ears of the mobile companies no doubt, but it’s still a distant harmony.

The prospect of agreement on a telecoms package echoes progress which has been made on energy liberalisation. The Council reached agreeement in October and we now await second reading in Parliament. Here too proposals for unbundling have been blocked by the Council (although Parliament is in favour), whereas the idea of a European regulator has been welcomed – so much so that Commissioner Piebalgs is pressing for an organisation with teeth.

The Barroso Commission set its sights high in its proposals for liberalising these key sectors and has been forced to abandon some of its most ambitious objectives, but at least it seems probable that new legislation will be on the books by next June which will mark a step towards more open markets.