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EU: Reding and separation August 4, 2006

Posted by Jasper in Regulation.

EU’s Telecoms Commissioner, Viviane Reding, interestingly warned in a speech (on the review 2006 of the EU telecom rules, 27 June 2006) that, in the interests of improving competition in the EU, Europe’s dominant national telecoms companies might be forced to split their infrastructure and services divisions, in order to guarantee fair access for newer rivals. This structural separation, she explained, meant that telecoms regulators would be able to “require a dominant operator to provide non-discriminatory access to all operators by separating infrastructure provision from service provision to a greater or lesser extent”. However, the Commissioner did not disclose whether companies would have to sell or simply move their infrastructure activities into separate legal entities.

She also cited the UK where BT Group Plc has had its retail services operation, BT Openreach, separated from its network operation, BT Wholesale, in order to spur competition.

However, the recently published consultation document for the Review of the Regulatory Framework on the 29 July leaves out any reference to structural separation. Hence it is still unclear whether structural separation will be pursued more generally within the EU framework.



1. John Middleton - August 8, 2006

Hi – looks like an interesting blog and I look forwards to some more analysis.

I would refer you to a comment I made on the telco2.net blog regarding the review of the e-communications framework – at http://tinyurl.com/r238l. Reding likes headlines and basically scaring the shit out of the operators; fortunately, her cabinet and staff are mostly a bit more practical as you will see in the regulatory impact assessment they throw out almost all the suggestions made in her speech!

I think also there is quite a difference between functional seperation (a la BT) and structural seperation (as was threatened to BT..). Maybe I’m wrong but that is my take on it…

2. Jasper - August 8, 2006

John, I agree there are different degrees of separation. When I was refering to the lack of reference to structural separation in the EU consulation I was simply refering to separation more generally.

3. Tom - August 9, 2006

Indeed there is a difference and in actual fact when Commissioner Reding referred to structural separation she meant functional separation as occurred with BT’s undertakings in the UK.

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