ECTA: Less regulatory independence for more investment uncertainty: Council position threatens foundations of EU telecoms regulation


Brussels, 23 October 2017. Ahead of negotiations on rules to promote investment and thereby boost broadband connectivity in the EU, the Council deals a blow to regulatory independence in pursuit of better investment conditions. ECTA calls on the European Parliament and the European Commission to ensure that wilful political intervention in the work of national regulatory authorities (NRAs) be excluded under the future framework for electronic communications.

On 11 October 2017, the Council of Ministers issued the Estonian Presidency with a mandate to start interinstitutional negotiations with the European Parliament about the future rules for providers of connectivity in the form of electronic communications.

This mandate has left unaddressed critical issues of how to make co-investment solutions for future network deployment competitively sustainable. ECTA has previously insisted that notably the issue of co-ownership by operators participating in co-investments needs to be convincingly addressed, while ensuring access to non-participating operators on terms that enable them to compete effectively.

With its vote, the Council has not only failed to address these key aspects. In effect, the Member States brought added confusion to the co-investment issue by introducing commercial access agreements as an alternative. This indicates that the Council, rather than tackling foundational key aspects, seeks short-cuts that do not present a real alternative – neither for potential co-investors, nor for other operators who do not participate in co-investments.

The mandate crowns these insufficient rules for co-investment with a frontal attack on the centrepiece of the EU regulatory model for electronic communications: the independence of NRAs’ decision-making in all questions of market regulation. The text thus empowers Member States to block NRAs from imposing obligations for a minimum period `not longer than 7 years´, even if they have concluded that co-investment will not produce effective competition.

Executive Director Luc Hindryckx explains, `The issue here is not with whether this mechanism is appropriately justified or made subject to conditions. It simply must not enter the Code. Governments must not be able to interfere with the regulators’ appraisal of the market situation – and especially not to block remedies that the NRA would otherwise have imposed.´

ECTA regrets that Member States despite confirming their digital ambitions at the European Council last week, have been unable to translate these ambitions into agreement on a coherent, pro-competitive legislative mandate. Instead, the mandate has made a bad provision worse – to the extent of endangering the integrity of EU telecoms market regulation. The reduction in regulatory independence politicises market regulation, reduces regulatory predictability and has no discernible benefit in terms of promoting investment.

ECTA therefore calls on the European Parliament and the European Commission to prevent any lessening of NRAs’ independence in analysing and regulating markets. And encourages them to uphold the ambition of setting a broader remit of minimum competences for NRAs.

ECTA members are united in their belief that competition is the best driver of efficient investments and the greatest enabler of innovation, choice and benefits for citizens and businesses, as well as for the European economy overall. This is the key message that ECTA and its members promote in the discussions about the proposed European Electronic Communications Code.