CONVERGENCE & REGULATION: What Europe Thinks…

The European

Commission, with member states whose traditional approaches

to regulation have been quite different from each other has

been trying to evolve some consensus on broader concept of convergence

and the regulatory challenges that convergence may bring about.

To initiate a discussion on this, the Commission had come out

with a Green Paper on the Convergence of the Telecommunications,

Media and Information Technology sectors in December 1999. The

paper got tremendous response from member countries, companies,

academicians, regulators, and associations. The summary of the

public responses was published in March 1999. Produced here

is an extract from the summary.

Future

Approach to Regulation



Most commentators agreed with the Green Paper's assertion that
convergence does not call into question the objectives that

underpin sector specific regulation, but may call for a review

of the manner in which these objectives are achieved. However,

many felt that any new rules should take account of the way

in which new services and technologies empower the consumer

and the citizen, enabling them to make more informed choices

about the services and information they receive.

A wide variety

of views were expressed about the extent to which convergence

would or should have an impact on the approach to the regulation

of telecommunications, IT, and the media. Issues included:

• the balance
  
  between competition rules and sector-specific regulation;
  
  
  
  
• the extent
  
  to which the Internet and other on-line services should be
  
  subject to detailed (or additional) regulation; and
  
  
  
  
• the areas
  
  on which competition rules might focus.
  
  
  
  

There was

general agreement that future regulation should be technology

and platform-neutral, and that existing rules would need to

be adjusted where this was not the case. Some commentators took

the publishing model as their example, suggesting, along with

others, that future regulation should be competition-based,

with no a priori assumption that all services should be regulated.

Many commentators considered that certain public interest objectives

could not be achieved by the simple application of competition

rules, and that regulatory intervention to achieve such objectives

would always be needed.

Others saw

a continuing role, which balanced competition rules with sector-specific

regulation designed to foster competition, deliver social and

consumer goals, and oversee certain aspects of content provision.

Others stressed

that the application of competition law should recognise the

very large investments needed in the face of uncertain demand.

Still others focused variously on the need for competition rules

to be applied against discriminatory behaviour by existing network

operators; on the commercial activities of publicly funded broadcasters,

and on the risk of unfair cross-subsidies of new service activities

by large telecommunications operators.

There were

a number of comments expressing concerns about the risks of

extending existing regulation to areas currently unregulated,

and of applying audio-visual content rules inappropriately to

the on-line environment. Some contributors argued that the Internet

did not require additional regulation, and that the problems

in respect of regulating on-line activities would be those of

enforcement, where solutions combining industry self-regulation

with consumer control would be important.

There was

a large measure of agreement on the need to ensure a consistent

approach on the way in which networks and transmission services

were treated, leading many to support a move away from current

vertical regulatory divisions to a more horizontal approach

to them. This would ensure a consistent approach to infrastructure,

and at the same time allow rules governing content provision

to continue to reflect the specific nature of the services concerned.

There was

general agreement that all the sectors affected by convergence

required a clear and predictable regulatory framework to facilitate

investment decisions, and that regulation should be proportional

to the nature of the service or activity concerned. Among several

criteria suggested for defining the type of regulation that

should be applied, many argued that the distinction between

public and private communications should be considered to be

one of the more fundamental. At the same time there was general

recognition of the need to avoid inconsistent regulatory treatment

of essentially similar services, although some were sceptical

of claims that current definitions were inadequate.