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published NOVEMBER 27, 2009

New EU telecoms package set to boost Commission powers over national regulators and help foster competition within the market, says Freshfields

The new EU telecoms package due to be voted upon by the European Parliament tomorrow will create a major overhaul of EU telecoms rules and increase the powers of the Commission over national regulators by introducing a power of veto for it on obligations proposed by national regulators to regulate dominant operators. The new laws will also facilitate, as a last resort, the separation of dominant operator’s network and services businesses to resolve persistent competition problems and allow a better use and allocation of frequencies and facilitate their trading, according to international law firm Freshfields Bruckhaus Deringer. If passed, the new rules will come into effect in mid-2011 (other than those relating to spectrum use, which will come into force in mid-2010). Laurent Garzaniti, partner in Freshfields’ Brussels competition and TMT practices, comments: ‘One of the most important changes introduced by the new EU communications regulatory package is the power of veto that the Commission will now have on regulatory obligations that national regulators, such as OFCOM, may impose on dominant telecom companies. ‘A crucial novelty is also the possibility for national telecom authorities to impose upon incumbents the functional separation of their network and services operations in a similar way to the reorganisation of BT to create a standalone wholesale network business, Openreach. The new EU regulations also promote the more efficient use and allocation of frequencies, in particular by encouraging their trading, said Garzaniti. ‘This should release frequencies so that they can be used to provide new services such as 3G and 4G wireless broadband internet services and, ultimately, benefit consumers at large,’ he concluded.