Split of telecom firms mulled

BRUSSELS – European regulators should have the power to split telecoms operators from the networks they control if the firms are found to have significant market power, the European Commission will suggest later this year. The EU’s executive Commission will also seek the authority to impose remedies on telecom companies that are not behaving in a competitive way, Telecoms Commissioner Viviane Reding will say in a speech today, her notes obtained by Reuters showed. The Commission will publish an overhaul of EU telecom rules in October that changes which markets are regulated, by whom and with what powers. The European Parliament and the bloc’s 27 countries will have the final say on the new rules. «One of the changes I am looking at in the context of this year’s reform of the EU telecom rules is to give regulators a mandatory power to impose functional separation on telecom companies with significant market power,» Reding’s notes said. Britain’s incumbent operator, BT, has been split in this way and Italy and Sweden have discussed the issue. Most national regulators lack the power, however, to impose such a measure. «Functional separation» of an operator still enables it to count revenues gained from its networks division. But the unit would be under different management and have to offer network access on the same basis as it would to its parent. The Commission recently rapped Germany for passing a law that allowed dominant national operator Deutsche Telekom to block access by rivals to its high-speed network. Reding will also say cooperation between national regulators is insufficient on cross-border issues, which the Commission wants to solve with «federal solutions where necessary.» In the past year, the Commission has suggested increasing the powers of the European Regulators Group (ERG) – an advisory body of national regulators – to impose consistency in applying rules across borders. The ERG’s response was lukewarm. At the same time, and after almost a year of wrangling and heated discussions, the Commission managed to push through EU-wide caps on «roaming» fees for using a mobile phone abroad. «The roaming story should have shown you that we have a European telecom regulator already. It is the European Commission, which is a truly independent and supranational European institution,» Reding will say. The new rules would include additional power for the Commission to select its own solutions to competition problems in a domestic telecoms market if it feels that a national regulator has not done enough.