The European Commission has today announced that it will not conduct a review of the Recommendation on Relevant Markets Susceptible to Ex-Ante Regulation in 2004, and is rescheduling the first review of the Recommendation to the end of 2005.

The Recommendation was adopted on 11 Feb 2003, and contains a Considerant, which reads as follows: "(21) The Commission will review the need for any update of this Recommendation no later than 30 June 2004 on the basis of market developments". The Explanatory Memorandum accompanying the Recommendation singled out Market 16 as a specifically likely candidate for review, and in recent months, representatives of Commissioner Liikanen indicated in public that Markets 10 and 15 would be candidates for specific review. Subsequently, the minutes of a meeting of the European Regulators' Group (ERG) contained a public expression of the opinion of National Regulatory Authorities that a review of any of the 18 markets would be premature.

Today's statement (press release IP/04/753), in which the European Commission lists four "compelling reasons" to reschedule the review, is reproduced in full in this T-REGS news item.

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First review on new regulatory framework for electronic communication rescheduled for the end of 2005

Reference: IP/04/753   Date: 16/06/2004 

First review on new regulatory framework for electronic communication rescheduled for the end of 2005

For a variety of reasons, the Commission will not conduct a review of its Recommendation on relevant markets and services, which was adopted on 12 February 2003 (the “Recommendation”). This Recommendation comprises a list of electronic communications markets designated to be subject to so-called “ex ante” regulation by national regulatory authorities. The Commission considers that the end of 2005 would be a more realistic date for conducting a more meaningful review of the relevant markets.

The Commission decided to reschedule its review of relevant markets in the field of electronic communications for a variety of compelling reasons:

- First, a significant number of Member States have not even transposed the new regulatory framework for electronic communications into national law. These Member States are Belgium, France, Germany, Greece and Luxembourg;

- Second, even those Member States that have properly incorporated the regulatory framework into their domestic statute books have not yet had the opportunity to complete the requisite market analyses for all the 18 markets mentioned in the Recommendation;

- Third, the pace of change in the markets for electronic communication are not such that an early review would appear justified or that there should be changes to the definition of any of the markets included in the Recommendation;

- Fourth, launching a review of the current Recommendation on relevant markets would imply a substantial disruption the work plans of national regulators, which have been, and continue to be, based on the current Recommendation. Launching a review of the Recommendation would also unnecessarily increase the level of uncertainty related to regulatory intervention, in particular for those Member States which are in the process of carrying out their first market analyses.

For these reasons, rather than launching a review of the Recommendation at this stage, the Commission decided to reschedule the date for the launch of such a review until the end of 2005. This will also enable the Commission to gain a better understanding of the situation of electronic communications markets in all Member States, and in particular in the new Member States which joined the European Union on 1 May 2004.

Background

The Recommendation on relevant markets and services, which was adopted on 11 February 2003[1], comprises a list of electronic communications markets designated to be subject to ex ante regulation. National regulatory authorities are to carry out market analyses for each of the markets included in this list. If one or more operators in the market are found to have significant market power, national regulatory authorities must impose at least one regulatory obligation on such operators. If no operator is deemed to have significant market power, regulation must be rolled back.

The list of markets to be regulated needs to be regularly reviewed. The Commission must periodically undertake such reviews on the basis of a number of factors. Grounds for conducting a review would be:

- the pace of, and trends in, market developments;

- the period needed by national regulators to undertake market analyses;

- the need to safeguard the principle of continuity of regulatory policies; and

- the need to ensure legal certainty for suppliers of electronic communications services as well as other interested parties.

[1] Commission Recommendation 2003/311/EC of 11 February 2003 on relevant product and services markets within the electronic communications sector susceptible for ex ante regulation in accordance with Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services, OJ L114, 8.5.2003, p.45.