EU Competition policyOn Monday of last week, the three main institutions of the European Union reached agreement on a draft proposal that will dramatically alter how the telecommunications sector is regulated.  By coming to agreement member nations have ushered in a new era harmonizing telecom policy at the regional level. The agreement seeks to establish:

… an EU-level telecoms supervisor, the Body of European Regulators in Electronic Communications, or Berec, that moves away from the current consensus-based decision making in oversight of telecoms between national regulators, with majority rule being taken up (Source: BusinessWeek).

The agreement will bring ‘far-reaching changes’  reforms of the telecommunications sector. Stopping short of granting BEREC the power to veto decisions made by national regulatory bodies, the body will be able to make recommendations with the support of a majority of its 27 members. If these recommendations are not adhered to in a two-year time frame, Berec will have power to put forward ‘legally-binding’ resolutions.

A strong regional regulatory framework is necessary to act as a counterweight to the influence large incumbent operators have over national regulatory bodies, where they are more likely to push anti-competitive policies  favoring themselves.

The agreement represents a compromise.  Major telecom operators had asked for provision for cost-sharing for deploying next-generation networks. Countries like the UK and Sweden had been pushing for language on ‘functional separation’, requiring the separation of infrastructure companies into two units: services and network activities. Ultimately, these two measures were not included in the draft proposal.

For Pacfic nations, these developing events represent a roadmap for what integration of regulatory efforts in our part of the world might look like.  The EU is not the only model.

ECTELThe Eastern Caribbean Telecommunitions Authority (ECTEL) was established by the Governments of five Eastern Caribbean states (Commonwealth of Dominica, Grenada, Saint Christopher and Nevis, Saint Lucia, Saint Vincent and The Grenadines) to promote market liberalisation and competition in telecommunications of the contracting states.

The Authority’s work to promote competitive practices can serve as a model to the nations of the Pacific.  Having undertaken the liberalisation process in the late 1990s, the institution offers almost ten years of experience and knowledge to the island nations of the South Pacific.

In their most recent newsletter (1mb PDF), ECTEL weighs in on Interconnection rates an issue of some significance to regulatory bodies in the Pacific. Interconnection rates are defined as:

the rate that consumers pay for calls to persons using a different network. The retail rate for making a call to another network consist of the cost of interconnection (this is paid to the operator on the network being called) plus the cost to your provider for offering you his services.

ECTEL has recommended that carriers only charge each other what it costs them to carry the call and has done the research to ascertain what that cost-pricing structure would like.

I have stated quite consistently that as a late-comer to the telecom liberalisation party, the nations of the Pacific have the benefit of studying experiences in countries from all over the world.  By understanding developments in other regions, we can make much more informed decisions on how to pursue competition policy and greater regional harmonization on policy.