1. 1 TINF 2010 Tuesday 30 November 2010 Present and Future Regulation of Electronic Communications Vesa Terävä European Commission Information Society & Media

2. 2 Where we come from  Over the past ten years EU telecoms markets have witnessed increasing competition  Facilitated market entry  Substantial consumer benefits (lower prices, wide range of communications products)  Fixed sector  Market entry of new players has gradually chipped away the entrenched position of former monopolists  Alternative infrastructures, in particular cable has emerged as an alternative in many markets  Regulated access to local access networks has allowed greater competition in broadband markets  Mobile sector  Development under the auspices of competition  Rapid growth, fuelled by high demand

3. 3 Where we are 2002 framework successful, but… –Lack of consistency in national implementation –Need to complete the single market for electronic communications –Need to take account of market and technological developments (foster development of broadband)

4. 4 Where we are  Still a number of bottlenecks at access level  In concentrated markets with high barriers to entry new entrants face difficulties in gaining toehold in the market  Significant barriers to switching  Cost of certain basic communications services remain high  Internal market remains incomplete:  Few operators seeking to expand their service offering across the whole EU  European citizens cannot yet benefit from telecoms services on a genuinely European-wide scale

5. 5 Revised regulatory framework Reform Package adopted – 25 November 2009 BEREC established – 7 January 2010 National transposition – by 25 May 2011 Date for application of national laws transposing Better Regulation Directive - 25 May 2011  Effective implementation of the revised regulatory framework is a key to improve consistency and to achieve the single market

6. 6 Future challenges Technological and commercial convergence –Convergence between mobile and fixed Mobile voice represents 47% of all minutes Smartphones fuel mobile data usage – currently growing at the rate of 131% p.a. –Convergence between broadband and cable networks Bandwidth available over cable is on par with other NGA networks

7. 7 Future challenges Increasing maturity and rigidity of the EU telecoms markets –Difficulties faced by operators in further growing revenues and profits –Fixed broadband penetration approaching even 80% of households –Mobile penetration close to saturation –Declining revenues from traditional voice –Increasing data traffic does not necessarily translate into higher revenues

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11. 11 Future challenges However, growth and increasing importance of the internet continues –Innovation takes place largely outside the physical transmission (search platforms, social networks, device platforms)…. –…and outside Europe  Challenge for EU regulatory policy

12. 12 Regulatory answers? Competition, openness and innovation in the EU single market –Regulation More focused and more granular regulation New access remedies to reflect the technological and market developments (e.g. fibre unbundling and enhanced bitstream remedies) Potential regulatory response to bundles In the absence of infrastructure based competition equivalence of wholesale inputs to be considered Pricing regimes which reward investment risks –Mobilising spectrum More harmonised EU-wide approach –Consistency of regulation Fully operational BEREC

13. 13 Regulatory answers? Empowering the citizen –Facilitate switching Consumer continue to face difficulties when seeking to switch products or services –Ensure competitive and affordable cross-border communications services (e.g. roaming) to enable citizens to benefit from free movement and seamless communications services in the EU

14. 14 Regulatory answers? Cultivating the internet ecosystem –Openness of the internet Consumer transparency (traffic management policies) Quality of service - supervision by NRAs NRAs to promote end-users’ ability to access and distribute information and run applications and services of their choice –Privacy and trust Personal data breach notification Spam: right of action Principle of transparency for cookies

15. 15 Thank you for your attention !