Landline deregulation: Big EU telcos have Skype to thank

Traditional telcos have caught a break from the European Commission with the fixed telephony and the wholesale fixed call markets set to be immediately deregulated.

However, Steelie Neelie Kroes, the outgoing digital agenda commissioner, denied that this was a sop to get lots of very large and powerful companies on-side, via the proposed Connected Continent Package.

“Sometimes I have the feeling I'm speaking to spoilt children, but this is not just about giving them sweeties,” she said, adding it was high time the old-fashioned telcos moved with the times.

“It is not a healthy sector,” said Kroes, but with increased competition due to the likes of Skype, the commish decided it could lift some regulation on two parts of the telecoms market.

The access to the fixed telephony market and the wholesale market for fixed call origination will now only be subject to usual competition rules.

The package encompasses “the freedom to provide and to consume (digital) services wherever one is in the EU”, according to the EU’s website, with the proposal doing this by “pushing the telecoms sector fully into the internet age (and providing incentives for new business models and more investment) and removing barriers to a single market”.

“EU citizens and businesses demand superfast networks: moving away from unnecessary regulation is a fundamental first step if we are to unlock the massive investments needed," said Luigi Gambardella, chairman of the European Telecommunications Network Operators Association.

The commish is allowed to place extra regulation on markets where there are structural, legal or regulatory barriers to entry, for example high costs required to roll out a network; where market structure does not tend towards effective competition; and where competition law alone is insufficient to adequately address the market failure.

With users increasingly turning to IP technologies for voice calls, and the increased use of mobile phones in all parts of daily life, the landline sector is now off the regulatory hook.

Thursday’s recommendation also recognises that “virtual access products” can be considered substitutes to physical unbundling. The rules take effect immediately. ®