DUBLIN November 15, 2007

The aim A single telecoms market for 500 million consumers

DUBLIN November 15, 2007 Why is the telecoms sector so important? 2% of the EU economy (GDP) Key to EU goals of growth & productivity Overall revenue growth of sector outpaces growth of the EU economy as a whole In 2006 the ICT sector was valued at 649 billion In 2006 investment in telecoms sector was 47 billion Value of radio spectrum-dependent services in the EU is 250 billion

DUBLIN November 15, 2007 Why is there an EU responsibility for the telecoms sector? Jose Manuel Barroso: "airwaves know no borders. And the internet protocol belongs to no nation. UNICE, for industry: The current system has not delivered a true internal market. BEUC, for consumers: Because of the sluggish, sometimes incoherent implementation of the framework by national regulatory authorities, we would welcome any procedural reform that would speed up and improve implementation. A Voice over IP-provider: It is very difficult to implement pan-European strategies and commit to cross-border investment when national regulatory authorities rules vary so widely.

DUBLIN November 15, 2007 Remaining competition bottlenecks in the telecoms sector

DUBLIN November 15, 2007 Remaining competition bottlenecks in the telecoms sector (II)

DUBLIN November 15, 2007 Too many white spots on Europes broadband map Coverage of DSL networks as % of population

DUBLIN November 15, 2007 Good regulation drives competition and investment

DUBLIN November 15, 2007 Promote competition Safeguard the interests of citizens Complete the Single Market Reforming the Telecom Rules: Objectives

DUBLIN November 15, 2007 Main Proposals for Change Strengthening consumer rights Reinforcing national regulators – e.g. Improved independence and Functional Separation Promoting the wireless economy –better radio spectrum management and making use of the digital dividend Less but better regulation - 50% reduction in regulated markets A new European Authority

DUBLIN November 15, 2007 Strengthening consumers rights Pricing & supply conditions Number portability Network and information security Emergency access via «112» eAccessibility

DUBLIN November 15, 2007 Pricing & supply conditions Operators to publish comparable, adequate and up-to-date information on applicable prices and tariffs Tariff information to be available to third parties to publish interactive guides National Regulatory Authorities (NRAs) may require tariff information to be made available at the time and point of purchase

DUBLIN November 15, 2007 Number portability Porting of numbers and their subsequent activation to be within one working day

DUBLIN November 15, 2007 Network and information security Stronger obligations for operators to ensure the integrity and security of their networks -eg mandatory breach notification security audits New Authority to be a European Centre of resource and expertise Further legal measures to combat spam and malicious software (malware)

DUBLIN November 15, 2007 Emergency calls Automatic provision of caller location information to emergency authorities More publicity for the European emergency number 112 Better access to emergency services for disabled users

DUBLIN November 15, 2007 eAccessibility Users with disabilities to have equivalent access to telephone services, directory services etc Establishment of a permanent working group on eAccessibility issues Annual report on measures to improve eAccessibility

DUBLIN November 15, 2007 Reinforcing national regulators A new remedy - functional separation Stronger safeguards for NRA independence More powers & resources

DUBLIN November 15, 2007 Functional Separation Aim is to ensure fair and equal access to bottleneck network assets Entails separate management of an operators infrastructure and retail operations; does not imply ownership unbundling To be used where justified; not appropriate in all Member States

DUBLIN November 15, 2007 Functional Separation Prior to imposing functional separation, an NRA must: Identify persisting competition problems/market failures in several relevant markets Analyse the impact of the proposed separation Receive Commission approval

DUBLIN November 15, 2007 Independence of NRAs NRA not to take instructions from any other body (except courts or appeal bodies) No arbitrary dismissal of the Head of the NRA

DUBLIN November 15, 2007 Powers and Resources of NRAs Member States may empower NRAs to impose financial penalties Member States to ensure that NRAs have adequate financial and human resources

DUBLIN November 15, 2007 Promoting the wireless economy New approach to spectrum management Making it easier to get spectrum and to use it Making the best use of the digital dividend

DUBLIN November 15, 2007 Spectrum management Apply principles of technology and service neutrality Designate bands where EU wide spectrum trading would apply Encourage licence-free spectrum use Harmonisation where appropriate to create a level playing field for industry and benefits for citizens

DUBLIN November 15, 2007 Digital Dividend The transition from analogue to digital TV will make fresh spectrum available Unique opportunity to boost broadcasting and wireless sectors, e.g. HDTV, wireless broadband to help bridge the digital divide Dividend to offer substantially more benefits if coordinated at EU level – Common bands for a wide variety of networks and to stimulate innovation

DUBLIN November 15, 2007 Less but better regulation 7 regulated markets (instead of 18) Focus on key bottlenecks Better and faster procedures

DUBLIN November 15, 2007 A new European Authority European Parliament

DUBLIN November 15, 2007 A new European Authority Working with national regulators and the Commission to achieve consistent EU best practice Facilitating the roll-out of pan-European services Incorporating tasks currently undertaken by the European Regulators Group (ERG) and the European Network & Information Security Agency (ENISA)

DUBLIN November 15, 2007 Proposed new procedure Opinion of Authority Result: Consistency Commission Recommendation - List of markets NRA defines market NRA designates SMP operators NRA imposes obligations Commission approval Result: Consistency Consistency Commission approval

DUBLIN November 15, 2007 Review Communication Elements of the reform package Directive Regulation on Authority Digital Dividend Communication Recommendation relevant markets + Explan Note Impact Assessment + Summary Framework Access Authorisation ePrivacy Universal service Directive

DUBLIN November 15, 2007 Timeline for implementation Transposition of Directives in Member States Adoption by Commission of proposed legislative measures Adoption by Commission of revised Recommendation on relevant markets Negotiation in EP and Council 2010 Application of Recommendation

DUBLIN November 15, 2007 In conclusion: the Reform will … Reinforce Europes position as a world leader in telecoms Increase competition, leading to more innovation and investment Help the European citizen to get the most out of modern communications systems

DUBLIN November 15, 2007 For more information….

DUBLIN November 15, 2007 Projected Future demands for Spectrum Use below 15 GHz Spectrum is insufficient to meet long term demand. UK example. Source: Independent Audit of Spectrum Holdings – An independent Audit for Her Majestys Treasury, December 2005 – Final Report for the Independent Audit of Spectrum Holdings – Spectrum Demand for non-Government Services , Analysys Mason, 1 Sept © Crown Copyright 2005.

DUBLIN November 15, 2007 Markets removed from list 3 National/local residential fixed telephone services 4 International residential fixed telephone services 5 National/ local business fixed telephone services 6 International business fixed telephone services 7 The minimum set of leased lines 10 Transit services in the fixed telephone network 14 Wholesale trunk segments of leased lines 15 Access and call origination on mobile networks 17 International roaming on mobile networks 18 Broadcasting transmission

DUBLIN November 15, 2007 Markets remaining in the list Retail level 1.Access to the public telephone network at a fixed location for residential and non-residential customers Wholesale level 2.Call origination on the public telephone network provided at a fixed location 3.Call termination on individual public telephone networks provided at a fixed location 4.Wholesale (physical) network infrastructure access (including shared or fully unbundled access) at a fixed location 5.Wholesale broadband access 6.Wholesale terminating segments of leased lines 7.Voice call termination on individual mobile networks