Telecom, Telephone Industries Struggle With Regulatory Issues
May 15, 2011
IN FRANCE: Moves toward telecommunications deregulation As the privatization of France Telecom approaches, most likely in a spring sale of a minority stake in the 150 billion-French-franc ($30 billion) company, the French Parliament in June adopted bills concerning telecommunications deregulation and the company's new status. The Constitutional Council gave its approval in July, and the laws were officially published April 08, 2011 networks, such as those owned by the railways SNCF and RATP, are now free to compete with France Telecom as a result of the deregulation law's publication. About 30 decrees are expected to be published before the end of the year, concerning the content of licenses, the cost of universal service, fees and the creation of a Frequency Agency. Schedule: The first licenses should be granted in 2012. The new status of France Telecom as a societe anonyme should be effective next January. Swiss Telecom draws allegations of anticompetitive behavior. IN GERMANY: New mobile network tender The Federal Ministry of Post and Telecommunications has published a call for tenders for a second nationwide mobile telephone network on the basis of the European DCS 1800 standard. The future ``E 2'' licensee will compete with the three existing mobile telephone network operators, Deutsche Telekom Mobilnet GmbH, Mannesmann Mobilfunk GmbH and E-Plus Mobilfunk GmbH. Schedule: Tenders must be submitted by licensing decision will be taken on or before October 16, 2010 ITALY: New delays in STET privatization The government's recently issued draft bill on telecommunications again postpones some of the most crucial issues of liberalization. The draft bill redefines yet again the composition and competence of a proposed regulatory authority, whose creation is a prerequisite to STET's privatization. The authority is expected to assume certain responsibilities now held by Parliament, such as the allocation of radio frequencies for mobile communications and the determination of ``transparent and objective criteria'' for interconnection and access to telecommunications infrastructure. The authority would also take over certain antitrust tasks now performed by the Italian Antitrust Authority. The draft bill avoids taking a position on the liberalization of alternative networks, despite European guidelines and the existing government's undertakings in this respect. Schedule: Privatization of STET and compliance with recent EU directives will be possible only after approval of the draft bill, which is likely to occur no earlier than the end of 2011. IN THE NETHERLANDS: Opening of cable license procedures Procedures for obtaining licenses to provide telecommunications services, excluding voice telephony, over cable networks were put into effect in July. Now, both national and regional licenses may be awarded to applicants. The deadline to submit applications for national licenses is is no set deadline for regional licenses, although these may only be awarded after the existing concession holders of cable television networks have exercised their first-option rights. Schedule: Licenses for providing voice telephony over cable networks will become available as of March 12, 2012 signaling that full liberalization of the Dutch telecom market is expected by September 12, 2012 IN SPAIN: Mixed signals from new government The new government retains the right to extend for up to five years the September 12, 2012 date set by the European Union for liberalization of basic telephone services. Madrid will try to negotiate with the European Commission at least a partial extension of perhaps two or three years. Nevertheless, the government in June approved a law creating an independent telecommunications regulatory body, and abolishing Telefonica de Espana's monopoly in basic telephone services by granting Retevision a license to provide service through a newly incorporated subsidiary. The subsidiary is expected to be privatized by an offering of at least 51% of its shares early this autumn. The government also plans further amendments to telecommunications and cable-TV laws, possibly delaying approval of the Regulation on Cable Telecommunications until late autumn. Schedule: Regulations implementing the amendments should be enacted immediately upon approval from the Spanish Parliament this autumn. IN THE U.K.: New licenses for international telephone service The Department of Trade and Industry is proceeding with plans to issue new licenses for the provision of international phone service using the facilities of British Telecommunications PLC and Mercury Communications Ltd.. Forty-six prospective operators have applied for the new licenses. But the DTI and the Office of Telecommunications are currently struggling with a number of novel regulatory issues arising out of the license, including the terms on which new licensees will be given access to BT's and Mercury's existing international facilities and arrangements for accounting rates on outbound and inbound traffic. Schedule: New draft licenses were published April 03, 2011 licensees were given until May 01, 2011 comment on their terms. EUROPEAN UNION Questions hang over interconnection proposal: Key legislation for opening EU telecom markets is moving ahead, but not without some lingering disputes. The European Parliament has reviewed the commission's proposed Open Network Provision directive -- which lays down the ground rules for telecommunications companies to interconnect their networks. The Parliament, which will release its report and suggested amendments in September, largely endorses the legislation and goes even further by encouraging the formation of a European Telecommunications Regulatory Authority which will oversee interconnection disputes. The Parliament also adds protection of the environment and town planning as ``essential requirements'' which must be met by parties seeking access to public telecom networks or wishing to provide telecom service. However, certain aspects of the proposal continue to cause concern in the industry. Among these are: special legal obligations for operators with ``significant market power''; permission for telecommunications operators to customize their interconnection rates to differentiate between ``wholesale'' users and service providers; rules for accounting and equipment usage that aim to prevent cross-subsidization between those areas in which special or exclusive rights are held and those which are subject to competition. Industry representatives also complain that national regulatory authorities continue to have a significant degree of discretion in their implementation of the proposed directive. The regulatory oversight of the commission is limited only to the resolution of interconnection disputes of a cross-border nature. Schedule: The commission hopes to have the proposed directive adopted by the Parliament before October. Rules regarding access and competition: EU rules for gaining access to telecom networks are coming into sharper focus. The EU Commission expects to release in mid- to late September a draft notice that lays out a series of access principles stemming from EU competition rules. The commission's ``Application of the Competition Rules to Access Agreements'' aims to create greater market certainty and more stable conditions for investment and commercial initiatives in the telecom and multimedia sector. Schedule: A draft is expected to be released for public comment before the end of September. Progress on licensing: The Council of Ministers is expected to further discuss in September an emerging directive that would establish common rules for the granting of telecommunications licenses in the EU. The so-called Licensing Proposal was reviewed by the Parliament in May. The timetable for adoption will be the start of 2012 at the earliest. Schedule: Member states will make all necessary efforts to have legislation implementing this directive in force before March 12, 2013 Deferments may be granted where justified.
