EU policy for electronic communications: what does it mean for Turkey EU policy for electronic communications: what does it mean for Turkey? Richard Harris, DG Information Society IKV 2004 Ankara, 20th October 2004

Agenda The context From the 98 framework to the New Preparing for accession Monitoring the markets Technology neutrality and universal service Harmonisation and implementation One current issue - broadband

Context – 1980s telecommunications sector Sea of technology Monopoly no longer a viable model for telecommunications US market opened by anti-trust decisions 1968 - 1983 UK market opened by legislation 1981 - 1984 European Court of Justice decisions 1982-1985 The electronic communications acquis rests on this EU Green Paper on telecommunications policy 1987

Context – 1990s telecommunications sector Liberalisation of telecomms had already begun The “Information Society” gained currency GSM and Internet technology arrived Remaining EU monopolies abolished 1st Jan 1998 GATS was made, including the telecomms annex For C&EE telecomms the rate of change was huge

Context – 2000 telecommunications and IT Lisbon agenda - eEurope action plans Third generation mobile technology arrived The Internet bubble burst 2002 package, designed for an open market 10 new members joined the EU 1st May 2004 Slow progress in Turkey

From the 1998 package to the New 1998 designed to open markets that were dominated by a few privileged operators 2002 designed to consolidate a market where competition had taken root Regulation must be reduced where possible Vital transitional provisions - Article 27 of Framework Dir Technological neutrality - see later Harmonisation measures - see later

Article 27 of the Framework Directive (transitional provisions) Member States shall maintain existing notifications for the purposes of LLUB and all obligations under national law referred to in Article 7 of Directive 2002/19/EC (Access Directive) and in Article 16 of Directive 2002/22/EC (Universal Service Directive) until such time as a relevant determination is made by a national regulatory authority in accordance with Article 16 of this Directive.

Article 27 of the Framework Directive (transitional provisions) Article 7 of Directive 2002/19/EC (Access Directive) deals with rights and obligations between operators and refers back to specific articles of the earlier interconnection, voice telephony and leased lines directives. Article 16 of Directive 2002/22/EC (Universal Service Directive) deals with rights and obligations between operators and end-users and refers back to regulation of retail telephony tariffs, carrier selection and leased lines under the earlier directives.

Preparing for accession Abolition of monopolies in line with treaty obligations or with GATS - whichever is sooner. Implementation of market opening and of an effective regulatory regime. Full transposition and implementation of the acquis before accession. Promotion of knowledge based economy. Use of EU aid programmes where needed.

Monitoring the markets Monitoring of regulatory aspects for 13 candidates is available as a multi-client commercial service. Monitoring of commercial aspects was done for two years under a special contract for 13 candidate countries. Monitoring for the present 8 candidate and potential candidates will start soon under a special contract. Similar work is in hand under the MEDA program and analogous possibilities exist for other neighbouring countries and for Russia

Telecommunications market indicators eEurope 2002 set out to accelerate progress in the legal framework on, for example, telecoms and e-commerce and to re-orient financial instruments such as the R&D programmes. We also defined a set (23) of indicators for benchmarking, in order to track progress in topics ranging from the price of Internet access to the development of e- Government. The eEurope Benchmarking report that was adopted last week by the Commission is the first comprehensive reporting on these indicators. The idea of eEurope was to set clear targets with equally clear deadlines to be achieved by the end of 2002. Has this idea worked? I think it has. Let me give you a few examples: The new telecoms package, as well as the regulation on unbundling the local loop, have been rapidly adopted. This has been a substantial success and will generate improvements for both consumers and the industry in Europe. A light, but effective, legal framework on e-commerce that should ensure predictability and enhanced security in this field.

Telecommunications market indicators eEurope 2002 set out to accelerate progress in the legal framework on, for example, telecoms and e-commerce and to re-orient financial instruments such as the R&D programmes. We also defined a set (23) of indicators for benchmarking, in order to track progress in topics ranging from the price of Internet access to the development of e- Government. The eEurope Benchmarking report that was adopted last week by the Commission is the first comprehensive reporting on these indicators. The idea of eEurope was to set clear targets with equally clear deadlines to be achieved by the end of 2002. Has this idea worked? I think it has. Let me give you a few examples: The new telecoms package, as well as the regulation on unbundling the local loop, have been rapidly adopted. This has been a substantial success and will generate improvements for both consumers and the industry in Europe. A light, but effective, legal framework on e-commerce that should ensure predictability and enhanced security in this field.

Telecommunications market indicators - 30/6/2003 ? eEurope 2002 set out to accelerate progress in the legal framework on, for example, telecoms and e-commerce and to re-orient financial instruments such as the R&D programmes. We also defined a set (23) of indicators for benchmarking, in order to track progress in topics ranging from the price of Internet access to the development of e- Government. The eEurope Benchmarking report that was adopted last week by the Commission is the first comprehensive reporting on these indicators. The idea of eEurope was to set clear targets with equally clear deadlines to be achieved by the end of 2002. Has this idea worked? I think it has. Let me give you a few examples: The new telecoms package, as well as the regulation on unbundling the local loop, have been rapidly adopted. This has been a substantial success and will generate improvements for both consumers and the industry in Europe. A light, but effective, legal framework on e-commerce that should ensure predictability and enhanced security in this field.

Telecommunications market indicators - 30/6/2003 eEurope 2002 set out to accelerate progress in the legal framework on, for example, telecoms and e-commerce and to re-orient financial instruments such as the R&D programmes. We also defined a set (23) of indicators for benchmarking, in order to track progress in topics ranging from the price of Internet access to the development of e- Government. The eEurope Benchmarking report that was adopted last week by the Commission is the first comprehensive reporting on these indicators. The idea of eEurope was to set clear targets with equally clear deadlines to be achieved by the end of 2002. Has this idea worked? I think it has. Let me give you a few examples: The new telecoms package, as well as the regulation on unbundling the local loop, have been rapidly adopted. This has been a substantial success and will generate improvements for both consumers and the industry in Europe. A light, but effective, legal framework on e-commerce that should ensure predictability and enhanced security in this field.

Telecommunications market indicators - 30/6/2003 eEurope 2002 set out to accelerate progress in the legal framework on, for example, telecoms and e-commerce and to re-orient financial instruments such as the R&D programmes. We also defined a set (23) of indicators for benchmarking, in order to track progress in topics ranging from the price of Internet access to the development of e- Government. The eEurope Benchmarking report that was adopted last week by the Commission is the first comprehensive reporting on these indicators. The idea of eEurope was to set clear targets with equally clear deadlines to be achieved by the end of 2002. Has this idea worked? I think it has. Let me give you a few examples: The new telecoms package, as well as the regulation on unbundling the local loop, have been rapidly adopted. This has been a substantial success and will generate improvements for both consumers and the industry in Europe. A light, but effective, legal framework on e-commerce that should ensure predictability and enhanced security in this field.

Regular report - 2004 There is a certain level of alignment with the acquis. Full market liberalisation was achieved at the end of 2003 in legal terms. Further efforts are essential to complete the regulatory framework and to implement and enforce the rules in relation to the large powerful companies. The progress achieved in some markets, such as mobile telephony or internet service provision, could not be achieved in all telecommunication services. Turkey needs to take further steps in order to achieve genuine competition in all telecommunication markets.

Technological neutrality The 2002 regulatory framework applies regardless of the technology involved. This means that mobile operators can be regulated just as heavily as fixed operators. Another consequence of this is that radio technology can be used for basic fixed access. Where fixed penetration is low, this could be very significant, especially for GSM operators and radio based broad band services.

Harmonisation measures To discourage fragmentation in the EU market. Two kinds of measure: Notification of certain decisions to Brussels. Groups, committees and consultation between NRAs. Non EU countries not fully part of this. Solution needed for prospective EU members and for other countries that choose the EU regulatory framework.

Implementation issues Commission as guardian of the Treaty Specific notification deadlines. Continuous review of the transposition and implementation of the Directives by Member States. Dialogue, complaints. Public hearings. Annual report in November. Infringement proceedings. eEurope 2002 set out to accelerate progress in the legal framework on, for example, telecoms and e-commerce and to re-orient financial instruments such as the R&D programmes. We also defined a set (23) of indicators for benchmarking, in order to track progress in topics ranging from the price of Internet access to the development of e- Government. The eEurope Benchmarking report that was adopted last week by the Commission is the first comprehensive reporting on these indicators. The idea of eEurope was to set clear targets with equally clear deadlines to be achieved by the end of 2002. Has this idea worked? I think it has. Let me give you a few examples: The new telecoms package, as well as the regulation on unbundling the local loop, have been rapidly adopted. This has been a substantial success and will generate improvements for both consumers and the industry in Europe. A light, but effective, legal framework on e-commerce that should ensure predictability and enhanced security in this field.

Implementation issues New Regulatory Framework of 2002 Built on the foundations of the 1998 package Effective implementation of 1998 is a pre-requisite for the NRF Transitional provisions in Article 27 of the Framework directive, maintain key parts of the 1998 package in force until reviews have been made under Article 16 Notified to EU candidate countries in July 2002 eEurope 2002 set out to accelerate progress in the legal framework on, for example, telecoms and e-commerce and to re-orient financial instruments such as the R&D programmes. We also defined a set (23) of indicators for benchmarking, in order to track progress in topics ranging from the price of Internet access to the development of e- Government. The eEurope Benchmarking report that was adopted last week by the Commission is the first comprehensive reporting on these indicators. The idea of eEurope was to set clear targets with equally clear deadlines to be achieved by the end of 2002. Has this idea worked? I think it has. Let me give you a few examples: The new telecoms package, as well as the regulation on unbundling the local loop, have been rapidly adopted. This has been a substantial success and will generate improvements for both consumers and the industry in Europe. A light, but effective, legal framework on e-commerce that should ensure predictability and enhanced security in this field.

Implementation issues Framework Directive explicit impartiality of NRAs and independence from operators attribution of NRA tasks between different national bodies not always clear give the NRA the full range of powers contemplated by the framework fix a reasonable time limit for carrying out the first market reviews eEurope 2002 set out to accelerate progress in the legal framework on, for example, telecoms and e-commerce and to re-orient financial instruments such as the R&D programmes. We also defined a set (23) of indicators for benchmarking, in order to track progress in topics ranging from the price of Internet access to the development of e- Government. The eEurope Benchmarking report that was adopted last week by the Commission is the first comprehensive reporting on these indicators. The idea of eEurope was to set clear targets with equally clear deadlines to be achieved by the end of 2002. Has this idea worked? I think it has. Let me give you a few examples: The new telecoms package, as well as the regulation on unbundling the local loop, have been rapidly adopted. This has been a substantial success and will generate improvements for both consumers and the industry in Europe. A light, but effective, legal framework on e-commerce that should ensure predictability and enhanced security in this field.

Implementation issues Authorisations directive conditions attached to general authorisation clearly defined in law procedures for granting rights of use of radio frequencies must respect the principles of transparency, non-discrimination, etc. no unnecessary limits may be imposed on the number of rights of use existing limitations on the number of rights of use of frequencies must be reviewed the NRA must make adjustments to balance administrative costs and charges and publish a yearly overview eEurope 2002 set out to accelerate progress in the legal framework on, for example, telecoms and e-commerce and to re-orient financial instruments such as the R&D programmes. We also defined a set (23) of indicators for benchmarking, in order to track progress in topics ranging from the price of Internet access to the development of e- Government. The eEurope Benchmarking report that was adopted last week by the Commission is the first comprehensive reporting on these indicators. The idea of eEurope was to set clear targets with equally clear deadlines to be achieved by the end of 2002. Has this idea worked? I think it has. Let me give you a few examples: The new telecoms package, as well as the regulation on unbundling the local loop, have been rapidly adopted. This has been a substantial success and will generate improvements for both consumers and the industry in Europe. A light, but effective, legal framework on e-commerce that should ensure predictability and enhanced security in this field.

Implementation issues Access directive law should not predetermine the obligations on SMP operators without regard to market conditions law should not limit the NRA’s power to impose particular obligations on SMP operators NRA should be empowered to ensure that RIO’s contain the minimum elements NRA must be empowered to intervene on its own initiative where necessary eEurope 2002 set out to accelerate progress in the legal framework on, for example, telecoms and e-commerce and to re-orient financial instruments such as the R&D programmes. We also defined a set (23) of indicators for benchmarking, in order to track progress in topics ranging from the price of Internet access to the development of e- Government. The eEurope Benchmarking report that was adopted last week by the Commission is the first comprehensive reporting on these indicators. The idea of eEurope was to set clear targets with equally clear deadlines to be achieved by the end of 2002. Has this idea worked? I think it has. Let me give you a few examples: The new telecoms package, as well as the regulation on unbundling the local loop, have been rapidly adopted. This has been a substantial success and will generate improvements for both consumers and the industry in Europe. A light, but effective, legal framework on e-commerce that should ensure predictability and enhanced security in this field.

Implementation issues Universal service directive full range of US elements must be included no operator may be excluded by law from having US obligations US requirements must be neutral with respect to competition Rights of end-users must be fully transposed Obligations may not be imposed in a retail market unless the NRA considers wholesale remedies insufficient eEurope 2002 set out to accelerate progress in the legal framework on, for example, telecoms and e-commerce and to re-orient financial instruments such as the R&D programmes. We also defined a set (23) of indicators for benchmarking, in order to track progress in topics ranging from the price of Internet access to the development of e- Government. The eEurope Benchmarking report that was adopted last week by the Commission is the first comprehensive reporting on these indicators. The idea of eEurope was to set clear targets with equally clear deadlines to be achieved by the end of 2002. Has this idea worked? I think it has. Let me give you a few examples: The new telecoms package, as well as the regulation on unbundling the local loop, have been rapidly adopted. This has been a substantial success and will generate improvements for both consumers and the industry in Europe. A light, but effective, legal framework on e-commerce that should ensure predictability and enhanced security in this field.

What does this mean for Turkey? Turkish policy is being overtaken by events – political courage is now required. The need is to secure an orderly transition to a fully liberalised regime quickly. Without this, the wider economy will suffer. Vital that the resources and energies of Turk Telekom are harnessed more effectively. EU rules apply in exactly the same way both to state owned and to privately owned companies. Privatisation is not a requirement of EU rules but full liberalisation is required.

What does this mean for Turkey? Above all, remember: That a liberalised telecommunications sector is not an end in itself It is the most important building block of the Information Society When EU ministers meet, they no longer discuss liberalisation – it is history They discuss spam, IPRs, eGovernment, security and how to promote broadband access

Broadband Why is the EU involved in broadband? What is it doing? What progress is there? Conclusions

Why is the EU involved? Concern about economic growth Concern about competitiveness Concern about exclusion

What is the EU doing? Liberalisation of telecommunications One framework – many situations eEurope action plans – Lisbon Education Content Trust and confidence National broadband strategies Common elements of strategies Supply side policies Demand side policies

National broadband strategies Supply side policies Importance of competition Extending coverage to under-served areas Monitoring the market Research and development Demand side policies Aggregation Open and inter-operable services Intellectual property Trust and security

What progress is there? See the following five slides

Broadband penetration rates – EU15

Broadband penetration in the New Member States (January 2004)

Broadband take-up by technology in the EU15 - July 2002 to January 2004

Facility-based competition (January 2004)

DSL and cable modem coverage in the EU15 (December 2003)

Conclusions Growth of broadband has accelerated Wide differences between countries Most growth is in DSL and cable Other technologies are in evidence Competition stimulates growth Only rural areas have low accessibility Scope for increased take-up is high

Thank you for your attention richard.harris@cec.eu.int For more information: See - Europa web-site Both benchmarking and promoting best practices are central to the eEurope 2005 approach. Benchmarking was pioneered in eEurope 2002. The focus is measurable outputs. The process involves: defining and then using a series of indicators to measure the development of the Information Society, and then reflecting the findings in policy. To ensure we are comparing like with like, the Commission will propose a legal basis for European Information Society statistics before the end of the year. The benchmarking results will also help us identify best practices. The analysis and dissemination of these best practices is critical to ensure that, for example, the many hundreds of local authorities across Europe do not all reinvent the local e-government wheel.