Competition key to EU's new world

Reding brings case for massive overhaul of telecom rules

Europe can expect to kick-start a generation of new services such as mobile broadcasting and online film downloading only if there is a massive overhaul of telecom rules, EU media and information society commissioner Viviane Reding has warned.

Speaking at a European Parliament hearing Thursday, Reding said her own reform plans — unveiled in November — will help spur competition among operators and drive down the costs that have hampered new broadcasting opportunities.

"The EU member states where there is the most competition, and where the in-vestment is best, are those with the most services," she said.

Reding was speaking just days after a British couple revealed they had been hit with a bill of $22,000 after downloading four episodes of the sitcom "Friends" via a mobile phone.

The commissioner said that telecom operators are among the biggest obstacles to mobile Internet services because they are able to add prohibitive charges on data downloads.

"Users expect the mobile Web to be as open and easy to use as the fixed-line Internet," she said. "For the vast majority of consumers, the horror of getting a terribly expensive bill acts as a powerful deterrent."

The reforms aim to encourage operators, broadcasters and content providers to develop new broadcast services through the Internet, wireless networks or on mobile phones. Reding said that new technologies have been kept from the market by former state-owned telecom mo-nopolies that have no competitors and therefore no incentive to offer more to their customers. "I do not believe monopolies lead to investment. But competition does lead to investment," she said.

Reding's reforms will set up an EU telecoms authority, liberalize radio spectrum and give national authorities the right to break up some of Europe's biggest telecoms companies.

At the hearing, she was opposed by telecoms operators, who said the best way to build new broadcasting services would be to underpin the heavy investments that were being made. "The telecoms sector will face an unprecedented increase in data traffic and in bandwidth capacity needs. The key challenge is therefore how to encourage risky investment in new networks," said Michael Bartholomew, director of the European Telecommunications Network Operators.

However, the association of rival operators, the European Competitive Telecommunications Assn., said that established operators were abusing their market dominance to keep prices high. Broadband is eight times more expensive in the closed Greek market than in France.
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