Wednesday, July 18, 2007

EU Considering its own FCC

EC Telecom Commissioner Viviane Reding reportedly is considering the formation of a Europe wide telecom regulatory body. She is considering a centralized telecom regulator that would sit in the European Commission 's headquarters in Brussels and work across all of the European Union's 27 member states. She has referred to it as a one-stop shop, called the European Networks Agency, for cross border issues.

It is interesting to compare this possibility to regulation in the U.S. The U.S. Federal government has a great deal more power than the EC, which makes the FCC quite powerful.

The U.S. also has state level regulatory bodies. Many of them act as rubber stamps to the proposals from the incumbent telcos. However, the regulatory agencies in the larger states have had significant power, at least in the past. As the U.S. telcos have amalgamated into two very large incumbents, ATT and Verizon, even these regulators in the large states have been overwhelmed. The FCC is the only regulatory group that can still be effective.

Today the telecom service providers are quite segmented into separate companies in each country. Consequently, it will be natural for the national regulators to set the rules in each country. The centralized EC group will likely limit itself to setting an overall policy that provides a significant amount of wiggle room for each country.

Broadband deregulation, especially for VDSL and fiber services is a major issue where there is significant conflict between individual country regulators and the EC. Germany and Deutsche Telekom do not want to provide access to VDSL loops to competitive carriers, at least for the first few years. Telefonica in Spain is also objecting strongly to EC unbundling rules. This is likely to be a battleground for Ms. Reding's new commission and one that will have a strong effect on TelcoTV deployments in Europe.

No comments: