EL speech in Parnu, 20'9'2002

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EU policy for electronic communicationswhat
does it mean for Turkey?Richard Harris, DG
Information Society
IKV 2004 Ankara, 20th October 2004
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Agenda

• The context
• From the 98 framework to the New
• Preparing for accession
• Monitoring the markets
• Technology neutrality and universal service
• Harmonisation and implementation
• One current issue - broadband

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Context 1980s telecommunications sector

• Sea of technology
• Monopoly no longer a viable model for
  telecommunications
• US market opened by anti-trust decisions 1968 -
  1983
• UK market opened by legislation 1981 - 1984
• European Court of Justice decisions 1982-1985
• The electronic communications acquis rests on
  this
• EU Green Paper on telecommunications policy 1987

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Context 1990s telecommunications sector

• Liberalisation of telecomms had already begun
• The Information Society gained currency
• GSM and Internet technology arrived
• Remaining EU monopolies abolished 1st Jan 1998
• GATS was made, including the telecomms annex
• For CEE telecomms the rate of change was huge

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Context 2000 telecommunications and IT

• Lisbon agenda - eEurope action plans
• Third generation mobile technology arrived
• The Internet bubble burst
• 2002 package, designed for an open market
• 10 new members joined the EU 1st May 2004
• Slow progress in Turkey

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From the 1998 package to the New

• 1998 designed to open markets that were dominated
  by a few privileged operators
• 2002 designed to consolidate a market where
  competition had taken root
• Regulation must be reduced where possible
• Vital transitional provisions - Article 27 of
  Framework Dir
• Technological neutrality - see later
• Harmonisation measures - see later

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Article 27 of the Framework Directive
(transitional provisions)

• Member States shall maintain existing
  notifications for the purposes of LLUB and all
  obligations under national law referred to in
  Article 7 of Directive 2002/19/EC (Access
  Directive) and in Article 16 of Directive
  2002/22/EC (Universal Service Directive) until
  such time as a relevant determination is made by
  a national regulatory authority in accordance
  with Article 16 of this Directive.

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Article 27 of the Framework Directive
(transitional provisions)

• Article 7 of Directive 2002/19/EC (Access
  Directive) deals with rights and obligations
  between operators and refers back to specific
  articles of the earlier interconnection, voice
  telephony and leased lines directives.
• Article 16 of Directive 2002/22/EC (Universal
  Service Directive) deals with rights and
  obligations between operators and end-users and
  refers back to regulation of retail telephony
  tariffs, carrier selection and leased lines under
  the earlier directives.

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Preparing for accession

• Abolition of monopolies in line with treaty
  obligations or with GATS - whichever is sooner.
• Implementation of market opening and of an
  effective regulatory regime.
• Full transposition and implementation of the
  acquis before accession.
• Promotion of knowledge based economy.
• Use of EU aid programmes where needed.

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Monitoring the markets

• Monitoring of regulatory aspects for 13
  candidates is available as a multi-client
  commercial service.
• Monitoring of commercial aspects was done for two
  years under a special contract for 13 candidate
  countries.
• Monitoring for the present 8 candidate and
  potential candidates will start soon under a
  special contract.
• Similar work is in hand under the MEDA program
  and analogous possibilities exist for other
  neighbouring countries and for Russia

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Telecommunications market indicators

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Telecommunications market indicators

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Telecommunications market indicators - 30/6/2003
??

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Telecommunications market indicators - 30/6/2003

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Telecommunications market indicators - 30/6/2003

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Regular report - 2004

• There is a certain level of alignment with the
  acquis.
• Full market liberalisation was achieved at the
  end of 2003 in legal terms.
• Further efforts are essential to complete the
  regulatory framework and to implement and enforce
  the rules in relation to the large powerful
  companies.
• The progress achieved in some markets, such as
  mobile telephony or internet service provision,
  could not be achieved in all telecommunication
  services.
• Turkey needs to take further steps in order to
  achieve genuine competition in all
  telecommunication markets.

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Technological neutrality

• The 2002 regulatory framework applies regardless
  of the technology involved.
• This means that mobile operators can be regulated
  just as heavily as fixed operators.
• Another consequence of this is that radio
  technology can be used for basic fixed access.
• Where fixed penetration is low, this could be
  very significant, especially for GSM operators
  and radio based broad band services.

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Harmonisation measures

• To discourage fragmentation in the EU market.
• Two kinds of measure
• Notification of certain decisions to Brussels.
• Groups, committees and consultation between NRAs.
• Non EU countries not fully part of this.
• Solution needed for prospective EU members and
  for other countries that choose the EU regulatory
  framework.

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Implementation issues

• Commission as guardian of the Treaty
• Specific notification deadlines.
• Continuous review of the transposition and
  implementation of the Directives by Member
  States. Dialogue, complaints.
• Public hearings.
• Annual report in November.
• Infringement proceedings.

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Implementation issues

• New Regulatory Framework of 2002
• Built on the foundations of the 1998 package
• Effective implementation of 1998 is a
  pre-requisite for the NRF
• Transitional provisions in Article 27 of the
  Framework directive, maintain key parts of the
  1998 package in force until reviews have been
  made under Article 16
• Notified to EU candidate countries in July 2002

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Implementation issues

• Framework Directive
• explicit impartiality of NRAs and independence
  from operators
• attribution of NRA tasks between different
  national bodies not always clear
• give the NRA the full range of powers
  contemplated by the framework
• fix a reasonable time limit for carrying out the
  first market reviews

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Implementation issues

• Authorisations directive
• conditions attached to general authorisation
  clearly defined in law
• procedures for granting rights of use of radio
  frequencies must respect the principles of
  transparency, non-discrimination, etc.
• no unnecessary limits may be imposed on the
  number of rights of use
• existing limitations on the number of rights of
  use of frequencies must be reviewed
• the NRA must make adjustments to balance
  administrative costs and charges and publish a
  yearly overview

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Implementation issues

• Access directive
• law should not predetermine the obligations on
  SMP operators without regard to market conditions
• law should not limit the NRAs power to impose
  particular obligations on SMP operators
• NRA should be empowered to ensure that RIOs
  contain the minimum elements
• NRA must be empowered to intervene on its own
  initiative where necessary

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Implementation issues

• Universal service directive
• full range of US elements must be included
• no operator may be excluded by law from having US
  obligations
• US requirements must be neutral with respect to
  competition
• Rights of end-users must be fully transposed
• Obligations may not be imposed in a retail market
  unless the NRA considers wholesale remedies
  insufficient

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What does this mean for Turkey?

• Turkish policy is being overtaken by events
  political courage is now required.
• The need is to secure an orderly transition to a
  fully liberalised regime quickly.
• Without this, the wider economy will suffer.
• Vital that the resources and energies of Turk
  Telekom are harnessed more effectively.
• EU rules apply in exactly the same way both to
  state owned and to privately owned companies.
• Privatisation is not a requirement of EU rules
  but full liberalisation is required.

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What does this mean for Turkey?

• Above all, remember
• That a liberalised telecommunications sector is
  not an end in itself
• It is the most important building block of the
  Information Society
• When EU ministers meet, they no longer discuss
  liberalisation it is history
• They discuss spam, IPRs, eGovernment, security
  and how to promote broadband access

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Broadband

• Why is the EU involved in broadband?
• What is it doing?
• What progress is there?
• Conclusions

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Why is the EU involved?

• Concern about economic growth
• Concern about competitiveness
• Concern about exclusion

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What is the EU doing?

• Liberalisation of telecommunications
• One framework many situations
• eEurope action plans Lisbon
• Education
• Content
• Trust and confidence
• National broadband strategies
• Common elements of strategies
• Supply side policies
• Demand side policies

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National broadband strategies

• Supply side policies
• Importance of competition
• Extending coverage to under-served areas
• Monitoring the market
• Research and development
• Demand side policies
• Aggregation
• Open and inter-operable services
• Intellectual property
• Trust and security

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What progress is there?

• See the following five slides

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Broadband penetration rates EU15
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Broadband penetration in the New Member States
(January 2004)
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Broadband take-up by technology in the EU15 -
July 2002 to January 2004
35
Facility-based competition (January 2004)
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DSL and cable modem coverage in the EU15
(December 2003)
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Conclusions

• Growth of broadband has accelerated
• Wide differences between countries
• Most growth is in DSL and cable
• Other technologies are in evidence
• Competition stimulates growth
• Only rural areas have low accessibility
• Scope for increased take-up is high

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• Thank you for your attention
• richard.harris_at_cec.eu.int
• For more information
• See - Europa web-site