New entrants and national regulators agree on need to increase competition in high-speed internet

Brussels, 26th September 2003 - At a roundtable entitled 'Competition in Broadband' held today in Brussels, there was broad agreement between new entrants and National Regulatory Authorities on the need for effective implementation of the new EU telecoms package, in particular in the area of bitstream access.

Speaking in the presence of distinguished panellists and invitees including Jens Arnbak, Chair of the European Regulators Group (ERG), and Erik van Ginderachter, Head of Unit in DG Competition at the European Commission, Tiscali President and CEO Renato Soru said that European telecoms incumbents are currently taking advantage of insufficient regulation to partition the EU market for broadband and to deny European consumers lower prices and access to better services. "In a sector vital for the European economy, newcomers offering broadband need interconnection or bitstream access to the incumbent's existing local network. Without this, competition is hindered - with the risk of a de facto Internet monopoly along national lines," Soru said.
At the event, Managing Director of the European Competitive Telecommunications Association (ECTA) Roger Wilson presented ECTA's latest DSL scorecards. Even if the figures show a slight increase in broadband uptake in Europe, this lags far behind what it could be in a more competitive environment, said Wilson.

Taylor Reynolds, from the International Telecommunications Union (ITU), added how a recent international study by ITU shows that the roll-out of broadband, in particular in parts of Asia, is much more advanced than in Europe, with consumers not only getting lower prices but faster transmission rates and better service.

Jens Arnbak, Chair of ERG stressed that new entrants need "stepping stones" such as bitstream access and local loop unbundling in order to build up market presence. Marco Pierani of the Italian consumer watchdog, Altroconsumo, said that the priority for regulators should be ensuring the development of sustainable competition which would ultimately lead to lower prices and better quality services for consumers. Paul Champsaur, President of France's Autorité de Régulation des Telecommunications, underlined that until competition in broadband is satisfactory in Europe, the NRAs must remain able to regulate. Roberto Viola, Director of Regulatory Department, at Italy's regulator Agcom, added that detailed scrutiny of margin squeezes needed to be conducted - in Italy this is being facilitated through the separation of wholesale and retail units of the incumbent.

Erik van Ginderachter said the Commission believes there is insufficient competition in broadband, with the incumbents "taking the lion's share of a growing market". He assured that the Commission would continue to act on the basis of EU antitrust rules, to complement national ex-ante regulation. He also stated that future findings of abuse in the broadband market could result in higher fines being imposed, know that precedents have been set by the 2003 Wanadoo and Deutsche Telekom decisions.

Last February, the European Commission adopted its Recommendation on Relevant Markets, a key measure of its new regulatory package for telecommunications in the EU which came into force in July. It included guidelines to national regulators in the 15 Member States on how to define the market for bitstream access. It is now the responsibility of the national regulators to analyse this market and, where competition is found lacking, to put in place appropriate remedies. But many of them are lagging behind schedule, Andy Tarrant, Director of Regulatory Affairs of ECTA, told the roundtable, because they are being held back by the failure of certain Member States to implement new EU rules on time. This was holding back the development of communications markets by creating uncertainty and affecting investor confidence.

The roundtable was co-hosted by Tiscali, the European Internet Communication Company, and ECTA. It was moderated by Nick Clegg MEP, who is responsible for an upcoming European Parliament report on the implementation of the telecommunications package.