Openreach, a British Telecom (BT) unit created to give rivals equal access to its network, launches today (Wed.). Openreach will provide a “first mile” of connections, fiber and wiring linking millions of residential and commercial users to communications providers’ networks through BT local exchanges, the telco said. The new division results from a deal with the Office of Communications (Ofcom), which used the cudgel of an antitrust probe to persuade the incumbent to play fair with competitors. U.K. alternative telcos said time will tell if Openreach can achieve that goal.
Dugie Standeford
Dugie Standeford, European Correspondent, Communications Daily and Privacy Daily, is a former lawyer. She joined Warren Communications News in 2000 to report on internet policy and regulation. In 2003 she moved to the U.K. and since then has covered European telecommunications issues. She previously covered the U.S. Occupational Safety and Health Administration and intellectual property law matters. She has a degree in psychology from Duke University and a law degree from the University of Tulsa College of Law.
German alternative telcos reacted furiously Tues. to a document hinting the govt. may move away from regulating Deutsche Telekom (DT). In comments filed in a European Commission (EC) consultation on review of the new telecom regulatory framework (NRF), the Ministry of Economic Affairs (BMWi) said the European Union is wrong to equate effective competition with absence of market power. “This could lead to the conclusion that the primary goal of regulation is the removal of extensive market power. This creates a danger of inefficient and excessive regulation, as natural monopolies and bottleneck positions are virtually characteristic for the telco market, and temporary monopoly positions represent a key element in dynamic processes of competition,” BMWi said. It urged the EC, when revising the NRF, to devise a “feasible concept” for whether and how to regulate in new markets, “especially with a view to encouraging innovations and investments.” DT rivals “are very concerned that this paper is the beginning of a change in strategy in Germany, away from regulating the ex-monopolist,” Swidler Berlin lawyer Axel Spies said on behalf of the German Competitive Carriers Assn. (VATM). Easing regulatory checks and balances even for a limited time would devastate DT’s competition in the broadband and other emerging sectors, he said. It would let DT “occupy new market sectors unchecked, pushing the competitors out of those sectors, which will devaluate the billions and billions of euro” they've already spent on infrastructure and new services, and discourage foreign investment. Germany lags behind other European countries in regulatory efficiency and broadband investment, according to the European Competitive Telecom Assn (ECTA). In Dec., the organization said studies show regulation spurs investment, and it pointed to low investment in Germany, “where the incumbent has maintained a strong grip and the regulatory environment is weak” (CD Dec 2 p8). DT has been pushing a regulatory “moratorium” on fiber VDSL deployment, something German telecom regulator BNetzA said last month it wouldn’t approve (CD Dec 27 p6). But the govt.’s apparent swing toward regulatory holidays for dominant players has competitors up in arms. If rules are lifted, Spies said, it will pit Germany against other member states, undermining efforts to harmonize European telecom. VATM also questioned BMWi’s reliance on a 2004 U.S. Supreme Court case, Verizon v. Trinko, in concluding temporary monopolies are needed to obtain dynamic competition. Trinko dealt with antitrust law’s role in a regulated telecom environment, not with whether to maintain preemptive regulation in markets not yet found to have effective competition, Spies said. In its paper, BMWi recommended use of benchmarking, cost-benefit analyses and other tools to monitor the effectiveness of rules and their enabling laws at the national and European level. Competition among regulatory models would enable nations to find more successful schemes sooner and junk less-effective ones more quickly, the govt. said.
Network and data security, including squelching spam, will be a key European issue this year. Austria, which took the European Presidency Jan. 1, listed spam among 4 telecom areas on which it will focus. Austria and Finland, to head the Presidency as of July, said they'll pay “particular attention” to beefier network security. EU presidencies rotate every 6 months.
France’s data protection agency completed rules to help U.S.-listed companies, including communications services providers, comply with the anonymous whistleblower requirements of the Sarbanes-Oxley Act while respecting French privacy laws. The Dec. guidelines from the Commission nationale de l'informatique et des libertes (CNIL) appear to signal a “serious effort to compromise and accommodate the goals” of the U.S. law, said Alan Raul, an attorney with Sidley Austin Brown & Wood LLP. Nevertheless, multinationals eyeing whistleblower hotlines still face a patchwork of European data protection laws, said Axel Spies, a European attorney with Swidler Berlin.
With several major U.S. and Canadian MSOs starting or expanding their VoIP rollouts in the fall, the cable industry’s IP telephony customer count easily surged past 2.5 million as 2005 drew to an end. At the same time, total N. American cable telephony subscribers, including those served by either circuit-switched or VoIP technology, passed the 5 million mark, according to the latest statistics from Kinetic Strategies Inc.
German telecom regulator BNetzA’s decision to regulate bitstream access as part of the wholesale broadband access market won approval from the European Commission (EC) and wary praise from Deutsche Telekom (DT) rivals. At first BNetzA sought to carve bitstream, or VDSL, from the market definition, a move DT sought. The incumbent, which plans to spend several billion euro deploying a fiber network to replace copper lines, asked BNetzA to deregulate wholesale and subscriber prices on fiber lines. Competitors said they'll wait to see how BNetzA ensures the access they need.
The European Parliament (EP) Wed. resoundingly voted to require Internet and phone call traffic data storage, a move that may be challenged at the European Union (EU) or national level. By 387-197, with 30 abstentions, lawmakers agreed to the controversial data retention directive at first reading, as the U.K. Presidency wanted. The vote was seen by many as a victory for the EP, which has been angling to strengthen its role in European decision-making.
The European Commission (EC) unveiled its proposal for revamping TV regulation Tues. The TV Without Frontiers (TVWF) draft has sparked strong criticism from Europe’s telecom sector over its distinction between traditional scheduled TV services (linear) and on-demand (non-linear) services. Under the proposal, TV rules would be updated to account for technological changes and market developments such as new viewing habits. Ad and product placement rules would be updated. On-demand audiovisual (A/V) content would come under less oversight, focussing mainly on protecting children and minors and quashing incitement to hatred.
Voting today (Wed.) on mandatory storage of phone and Internet traffic data, the European Parliament (EP) is badly split on the antiterror measure. Many who back the proposed directive, a compromise between the EP’s 2 largest political groups -- the Socialists and the European People’s Party -- and the Justice & Home Affairs (JHA) Council and European Commission (EC), admit it’s flawed but say it’s needed to fight serious crime. Many other MEPS decry it for failing to balance national security with human rights. Others rage at what they call a “back-door” compromise. The proposal is so disliked in some quarters that the Irish govt. is said to be prepared to challenge the directive in the European Court of Justice if, as expected, it’s adopted.
The fight against mandatory storage of Internet and phone traffic data isn’t lost but rejection has become “more than extremely difficult,” a key European Parliament (EP) foe of data retention told us Thurs. Last week, the Justice & Home Affairs Council approved amendments to a European Commission-proposed directive (CD Dec 5 p12) differing from those MEPs adopted weeks earlier. Ministers apparently got the heads of the EP’s 2 largest political groups to back the Council version, said Alexander Alvaro, author of a civil liberties panel report criticizing data retention. That backing means the measure likely will adopted in next week’s plenary session.