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Science

EU pushes for lower phone, Internet costs

Neelie Kroes, the EU's telecom commissioner, warns the industry of increased pressure in 2011. National telecom regulators, as in Italy, have not kept up the pressure on former state monopolies.

Neelie Kroes warned national telecom regulators

Neelie Kroes warned national telecom regulators

In a speech in Brussels on Tuesday, the European Union's telecom commissioner warned of new EU-level pressure on member states that continue to allow former state telephone monopolies to charge high fees for phone and Internet costs.

The European Commission has said that these additional charges range from five euros ($6.50) extra per month, as is the case in Poland, to as much as 18 euros a month in Ireland.

The move, known in the industry as local-loop unbundling, requires local telephone providers to be able to buy phone and Internet access from former state monopolies, like France Telecom or Deutsche Telekom, at cost. This then creates more competition at the retail level.

A new EU law gives Neelie Kroes, the EU's telecom commissioner, the power to open high-level investigations into national telecom regulators who themselves are not cracking down within their own country.

"Equal access to information is another key principle of non-discrimination," she said in the speech. "Where the dominant operator shares between its wholesale and retail arms commercially sensitive information about the network, but withholds it from access seekers, this could grant the retail arm of the dominant operator an anti-competitive advantage."

The speech was given just a month after the European Commission said that it supported plans by the Italian telecom industry regulator, known as Autorita per le Garanzie nelle Comunicazioni, or AGCOM, to let Telecom Italia raise its wholesale rates by 24 percent over the next two years. AGCOM later revised that figure in November to a maximum of 9.4 percent following an October 21 letter from Kroes.

As a former monopoly, France Telecom may face increased pressure from Brussels

As a former monopoly, France Telecom may face increased pressure from Brussels

Industry will not act on its own, expert says

Telecom observers say that Kroes' pressure is long overdue.

"The fact that this is necessary shows the profound weakness and ineffectiveness of numerous European national telecoms regulatory authorities," said Joe McNamee of the European Digital Rights Agency, a non-profit advocacy group in Brussels, in an e-mail to Deutsche Welle.

"In the same speech, the Commissioner urged 'national regulators not to hesitate to take action against any company' that was engaged in discriminatory behavior. The regulators do hesitate and this is one of the weakest links in the chain of defense of an open, democratic neutral Internet."

In a related speech last Thursday in Paris, Kroes also called for greater cloud computing security and consumer protection, including the right to permanently remove personal data from the Internet - a measure that is also being championed by her predecessor, Viviane Reding, who is now the EU's justice commissioner.

"Having clear and 'cloud-friendly' rules can only help ICT […] to know exactly what is allowed and what is not," Kroes said, adding that this could lead to simplification, for example in registration forms.

Kroes emphasized that the EU commission encourages "self-regulatory initiatives, such as codes of conduct or codes of practice like the 'binding corporate rules' for international data transfers. That is how they can effectively both protect and serve their customers."

Author: Cyrus Farivar
Editor: Kate Bowen

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