POLICIES :: eCommunications :: Telecoms policy: supporting liberalisation and harmonisation
Telecoms policy: supporting liberalisation and harmonisation
Over the past two decades the European telecommunications sector has moved from a tradition of strong public service monopolies, often twinned with national postal services, to one of increasing privatisation and competition. EU policy has evolved with the sector supporting common development, promoting competition and harmonisation.
The primary driver of change in the telecommunications sector has been the dramatic increase in the use of information technologies, which has revolutionised the industry.
The first phase of Community policy-making focused on establishing common technical development. Starting from 1984, the policy sought to develop:
- Common standards and specifications,
- Shared research programmes between operators and industry,
- Special programmes for the least developed regions using Structural Funds,
- Initial common European positions for international telecommunications negotiations.
Since 1987 a second policy phase saw liberalisation as the main focus and culminated with the liberalisation of all telecommunications services and networks by 1 January 1998. The 1998 framework was reviewed in 2002, when growing convergence between telecoms, broadcasting and information technology meant the rules had to be adapted. Today, with the EU’s emphasis on ‘Growth, Competitiveness and Employment’ telecommunications policy is at the heart of Union policy. The revision launched in 2007 seeks to bring the framework up to date for the fast-developing telecoms sector in a Union which now has 27 Member States.
Regulatory evolution
The regulatory process for telecommunications reflects the wider process of economic integration in Europe.
The main policy theme has been the move towards a single market for telecommunications services and equipment that progressively removes barriers to pan-European operation and supply. This policy has seen an evolving interaction between four elements: liberalisation, harmonisation, competition and public service.
Three instruments have been used to liberalise the sector in Europe:
- Progressive liberalisation of former monopolies
- Accompanying harmonisation measures
- Competition rules
The main mechanisms to promote liberalisation were directives which abolished the special rights of certain public enterprises to produce or supply telecommunications equipment or services, which then breached competition and internal market rules. These Directives required Member States to allow competition in the market for telecommunication services, but did not require the privatisation of national public services.
Open networks
To complement the liberalisation directives, a series of harmonising measures were also adopted. The 1990 Framework Directive established the principle of Open Network Provision: essentially harmonised open access to public telecoms networks. This directive was developed in the mid-1990s to adapt to the evolving competitive environment and together with further Directives on Interconnection and Licensing made up the ‘1998 package’ of legislation which established the basis for the full opening of EU telecoms markets on 1 January 1998. The legislative package was accompanied by comprehensive guidelines on the application of EC competition law in this new business environment.
The 1998 package was primarily designed to manage the transition from monopoly to competition. With rapidly changing technology, convergence and the new challenges of truly liberalised markets a single, coherent framework of regulation covering all electronic communication, including broadcasting networks, was agreed and applied from 2003. The 2003 policy framework largely replaced the 1998 package catering for a dynamic and potentially unpredictable market involving more players and a more complex multi-faceted telecommunications market environment.
The review of the 2003 framework launched in November 2007 seeks to build on the gains that consumers have already realised in the telecoms market. Competition has grown strongly in some cases, less so in others. Prices have fallen in many sectors, and EU initiatives such as the Roaming Regulation have helped bring them down in others. But the market is still largely fragmented, with few operators offering services across several Member States. The revised rules will focus regulation on those market sectors where competition is still lacking, and develop stronger EU-level regulation to foster the development of the internal market.
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