Viviane Reding wants to establish a pan-European telecom market authority. Do you agree with this idea?
No, we disagree on this point. It might be appropriate to create an agency responsible for dealing with technical issues in the sector, such as network security or spectrum management, at European level, but Viviane Reding’s plans go beyond this. The creation of a European regulator would significantly alter the relationship between Member States and the Commission. Europe is not a federal state. The Union functions on the basis of close cooperation between Member States and the European institutions, but the latter are not substitutes for those States. In the case of this proposal, that would be the case. Furthermore, telecoms markets are strongly rooted in their respective national environments.
Moreover, the Commission has not been sufficiently involved in the analysis of the electronic communications markets since 2002 and has not made use of the expertise of the European Regulators Group (ERG). It has not provided the guidance one might have expected in the case of fundamental issues such as high-speed broadband or the distortion of competition between fixed and mobile telephony. What Viviane Reding seeks to achieve by creating this agency is to extend its powers through an additional layer of bureaucracy.
But regulation is not applied in the same way in each country and that is preventing the creation of a single telecoms market …
Exactly – the Commission has never played this sort of harmonising role on a European scale. In the only real cross-border market – international roaming pricing – it has taken a decision under duress. It corrected a distortion of the market which had existed for several years, but only intervened after January 2006 when the ERG called for definitive action to be taken. How would the creation of an agency in Brussels change things? The European Union needs to be harmonised, but it is necessary for all the national regulators to work under the aegis of the Commission, which in turn should be responsible for providing a lead on the major issues and for taking decisions concerning harmonisation.
The European Commission wants to be able to break up the incumbent operators. Are you in favour of this in France?
Dividing the incumbent’s business into two separate entities, with network operations on the one side and services on the other, can work in certain countries. However, in France, conditions are not right for splitting France Télécom’s operations in two. Deciding to separate the network from the services is to acknowledge that the network, i.e. the local loop connecting the subscribers (currently copper), is a natural monopoly. This is contrary to the principles by which Europe has so far been guided, based on competition by means of investment by new entrants in their own infrastructures.
The Commission considers that each frequency band should be able to be used for either audiovisual or telecoms services. What is your view?
Europe lacks harmonisation as far as spectrum usage is concerned. It is extraordinary that the Union of 27 is not capable of defining a common position for the World Radiocommunication Conference currently underway in Geneva, which is charged with defining the terms for usage of the spectrum freed up by the switch-off of analogue TV services. Once again, this is the Commission’s responsibility. If the British give a particular frequency band to the highest bidder – a telecoms operator – and the Belgians allocate the same one to a broadcasting company, this will cause problems, because a television transmitter has a range of 500 kilometres, which means that the citizens of London wouldn’t be able to use their mobile operator’s services!
All in all, what is your opinion of Viviane Reding’s proposals?
They are totally unhelpful. Viviane Reding has not dealt with the question of future regulation, including in particular incentives for rolling out optical fibre networks. She is setting Europe on a path which will lead to opposition to change and to conflict with the national regulators.