The International Handbook of Telecommunications Economics, Volume III
Edited by Gary Madden
Chapter 9: The European Union and world telecommunications markets
Richard Cawley INTRODUCTION This chapter provides insight into the substance and process of telecommunications regulation and policy in the European Union (EU) in the latter part of the twentieth century. Full telecommunications competition came relatively late to the EU as a whole, although all legislation for market opening was in place in time to back commitments made in the World Trade Organization (WTO) agreement on telecommunications liberalization.1 The model for liberalization and regulatory oversight in the EU has been a combination of strong competition powers and sector-speciﬁc regulation. Competition powers in the EU context comprise the prevention or conditioning of mergers and agreements, and traditional instruments preventing the abuse of dominant market position and anticompetitive agreements. Sector-speciﬁc regulation has comprised ex ante legislation and related recommendations covering market authorizations, access, interconnection and universal service. Sector legislation has also been used to institute a harmonized regulatory approach across the EU and the early emphasis was on interoperability between networks and services in separate member states. The relatively late arrival to full competition conferred some second-mover advantages. Regulatory design was able to draw on experience in Europe as well as from other parts of the world. Artiﬁcial lines of business restriction that had characterized policy in the United States (US) were avoided. The regulatory framework was nevertheless asymmetric in nature with the heaviest obligations falling on undertakings, in particular incumbent telephone companies, deemed to have signiﬁcant market power. An important message in the EU context is that regulatory...
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