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Financial Times on Telecoms Separation

David Isenberg

I've written that a Network Neutrality law needs a Network Management Exception, and I've laid out how this exception is likely to become a giant vacuum-cleaner-fish loophole. The way out is the separation of infrastructure from service, so infrastructure operators can have no financial interests in the services they carry, hence no motive to discriminate in anti-competitive ways.

Now today's Financial Times has an editorial on the EC telecom regulator, Viviane Reding's proposal to beef up national telecom regulatory authority within European countries and create a Europe-wide so-called super-regulator. The editorial endorses functional telecom separation, saying,

...the commissioner has proposed allowing national watchdogs to force large operators to split the parts of their businesses that manage network infrastructure from those that provide services to consumers.

This "functional separation" makes sense. In the UK, BT's decision to create a separate infrastructure subsidiary has, arguably, improved access for rival providers. Greater competition and broadband use followed.

But the FT is skeptical of the super-regulator concept — as was I when I read about it! — saying,

The proposals for an EU super-regulator, and for the European Commission to be able to veto decisions by national watchdogs it does not like, are more worrying. There, Ms Reding has gone too far. Her premise is that regulatory consistency is needed and some watchdogs are too close to big telecoms providers to be trusted. But it is hard to see how the proposals will not create extra bureaucracy. They smack, too, of a "one-size-fits-all" strategy.

The FT proposes a "Lamfalussy committee" alternative. (Never heard of it.) The FT says that such a body would, "… enable the regulators to offer legislative advice and co-ordinate action among member states..."

I'm curious how a super-regulator or a Lamfalussy committee avoids regulatory capture. Anyhow, I'm off to Google Lamfalussy…

By David Isenberg, Principal Prosultant(sm), isen.com, LLC
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