The new EU Regulatory framework for electronic communications: from monopoly structure markets towards free competition in EU member states: a critical analysis

Abstract

The last decade of the 20th Century saw unprecedented changes in the global telecommunications industry. Numerous state-owned telecommunications operators were privatised and a wave o9f pro-competative and deregulatory telecommunications policies swept the world. new market-based approaches to the supply of telecommunications services were introduced in scores of countries.

The liberalisation of telecommunications markets was motivated by various factors including:

- Increasing evidence that more liberalsied telecommunications markets were growing and innovating faster and serving customers better

- The need to attract private sector capitalo to expand and upgrade telecommunications networks and to introduce new services

- Growth of the internet which caused data traffic to overtake voice traffic in many countries and led to the introduction of many new service providers

- Growth of mobile and other wireless services which provided alternatives to fixed networks and introduced new service providers to telecommunications markets

- Development of international trade in telecommunications services which are increasingly provided by trans-national and global service providers.

As market-based approaches were adopted during the 1990s, the number of national telecommunications regulatory authorities increased from 12 to over 90 around the world. To some this appears ironic. Shouldn't the market-based supply of telecommunications be accompanied by less regulatory intervention, rather than more?

The consensus answer around the world is "yes in the long run, but no in the short run". The successful transformation of monpolistic telecommunications markets into competative ones requires regulatory intervention. Without it, viable competition is not likely to emerge. In fact, the times when privatisation and the introduction of significant competition occur can be the busiest in the lifecycle of a regulatory organisation.

Regulatory intervention is required for a variety of reasons. Typically regulators must authorise or licence new operators. They must often remove barriers to market entry by new operators. they must oversee interconnection of new entrants with incumbent operators. Regulatory intervention may also be required to ensure competative markets do not fail to serve high cost areas or low income subscribers.

the objectives of telecommunications regulation vary from country to country. Governemtns in most countires continue to see telecommunications as an essential public service. even after telecommunications networks are no longer run by them, governments normally retain a regulatory role to ensure that telecommunications servidces are supplied in a manner consistent with national perceptions of the public interest.

With the widespread adoption of market-based approaches to the supply of telecommunications services, there is a growing consensus that regulators should not be involved in detailed "management" of the sector. Instead the regulators' role is seen to involve maintenance of a regulatory environment conducive to the efficient supply of telecommunications services to the public. The service suppliers will generally be private sector operators.

The trend today is toward deregulation. Some traditional forms of telecommunications regulation are now viewed as having been more damaging than beneficial to the development of national telecommunications infrastructure and services. Today when regulatory measures are proposed or reviewed, governments and regulators must generally ensure that there is a demonstrated need to regulate and the most efficient measure is selected to meet the specific regulatory objective.