Should the European Union have only a single telecommunications regulator, or keep 28 national regulators? That appears to be a live question now that rival “proposals” are floating around the EU.
Neelie Kroes, the EU telecommunications commissioner, has proposed an arrangement that some would think is more policitically feasible, namely keeping the 28 national regulators in place, while nevertheless removing restrictions that hinder cross-border operation, cooperation and ultimately mergers.
However, in a document obtained by the Financial Times, Joaquín Almunia, EU antitrust executive, called for a more-radical plan of abolishing the separate national authorities and replacing them with a single EU telecommunications office.
Fair-minded observers might say each plan has merit. Many service provider executives might agree that a single, continent-wide market would be more efficient, easier to navigate, at less cost.
But observers might also say there will be much more political opposition to the one-regulator plan, than to plans to harmonize and liberalize cross-border operations, while keeping the national regulators in place.
So the Kroes plan might arguably have the advantage of faster implementation. It might be hard to envision national governments potentially giving up the revenues national spectrum auctions might raise, nor the ability to customize national universal service plans between their own urban and rural areas, for example.
On the other hand, policymakers still appear “conflicted.” They still seem to want to promote competition by maintaining low-cost wholesale access to dominant carrier networks.
On the other hand, policymakers also want those dominant carriers to make huge new investments in next generation networks that will subject to the same low-profit, competition-enhancing arrangements that make those investments risky to stupid.
It isn’t so obvious that one regulator or 28 cooperating authorities is necessarily the better plan. Simplicity is good. But so is speed of implementation. And both sets of proposals seem to have the same objective, namely rationalizing operating environments and paving the way for mergers and consolidations that will produce fewer, but stronger, providers.
Under any set of circumstances, service provider executives and policymakers might well agree that current scale of operations for most service providers is not optimal. They need to get bigger.
Most EU policymakers also must address the risk and high costs of building next generation fixed networks, without addressing investing firm ability to capture adequate financial returns.
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