European Competitive Telecommunications Association

TELECOMS PROVIDERS URGE COMMISSIONER REDING TO ADOPT FUNCTIONAL SEPARATION

Brussels, 16 November 2006 - The European Competitive Telecommunications Association (ECTA) today, at its annual Regulatory Conference, called for the Commission to adopt functional separation as a cornerstone of the Review of the Communications Framework. CEOs from ECTA's leading member companies met with Viviane Reding, European Commissioner for Information Society and Media and a keynote speaker at ECTA's Regulatory Conference, to outline the pro-competition organisation's position on this and other critical issues. 

Functional separation of incumbent companies involves the separation of the management of the network assets and the provision of end-user services into distinct business units. If effectively implemented, ECTA believes this could enable open access to networks, resulting in equal competition between the former incumbents and alternative service providers.

ECTA welcomed Commissioner Reding's comment, made at the ECTA regulatory conference. She said, 'I believe that functional separation could indeed serve to make competition more effective.'ECTA also urged her to make available strong and clear powers for national regulators to make this happen for today's networks and for future evolutions. Click here to download Commissioner Reding's speech.

Steen Clausen, Managing Director of ECTA, said, 'Functional separation, through which the critical assets owned by incumbents are put in a separate division with a clear requirement to treat all players on a level playing field, could be a good example of the 'smart' regulation that the Commissioner is advocating. We should, however, be very careful to make sure that it really works before removing any pro-competitive safeguards, and includes network upgrades as leaving fibre access out of the equation would render the regime increasingly impotent as networks evolve.'

In Italy, where the regulator has appointed a Task Force to manage the separation process after Telecom Italia announced its intention to separate its access division, a key question will be whether this division contains only the existing copper lines or will also include upgrades to the network.

Stefano Parisi, CEO of Fastweb, a leading broadband and convergence firm based in Italy, said, The functional separation of Telecom Italia has the potential to be a very positive development for competition in Italy. But it is vital that it is structured to tackle the real bottlenecks that remain, and it should not be seen as a recipe for premature deregulation. We also must make sure that it focuses not just on old technologies, which may soon become obsolete, but also the natural evolutions to the network. Proposals from the Commission to establish clear rules on functional separation could provide the support that we need to ensure a successful conclusion to this process.'

If fully and effectively applied, functional separation could also be a solution in Germany, as politicians debate the telecoms law vis a vis Deutsche Telekom's request for a regulatory holiday following the roll-out of vDSL, a technology which increases the speeds achievable over local loops.

Bernd Schlobohm, CEO of QSC, a leading German telecoms provider which has separated its heavy investments in the loop into a joint venture access company, said, The political focus is now very much on how to take Europe to the next phase in broadband fibre to the curb and to the home  and we absolutely understand that focus. To make that happen in Germany, we need to see a functionally separate unit of Deutsche Telekom that has an obligation to meet demand for network upgrades from the entire industry, where the market cannot deliver. We found that separation of the access network was the right strategy for us to increase demand and lower costs. We see no reason why that should not apply to the incumbents

-ends-

For further information (not for publication):
Barbara McCall or Charlie Pryor
The Wordshop
Tel: +44 (0) 20 7031 8270
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About ECTA (www.ectaportal.com)
The European Competitive Telecommunications Association (ECTA) looks after the regulatory and commercial interests of new entrant telecoms operators, ISPs and suppliers of products and services to the communications industry.

ECTA works for a fair regulatory environment which allows all electronic communications providers to compete on level terms in order to multiply investment and innovation throughout an effective European internal market. The association represents the telecommunications industry to key government and regulatory bodies and maintains a forum for networking and business development.

ECTA member companies include operators, service providers and suppliers as well as National Associations of such which all contribute towards regulatory policy development and participate in our comprehensive range of networking events, conferences, seminars, briefings and executive meetings. 

 

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