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Content......................................................................................................................i
Summary..................................................................................................................ii
Context of liberalisation and main objectives of EU’s ICT regulation................1
Evolution and outcomes of ICT regulation in the EU..........................................3
Conclusion............................................................................................................4
References............................................................................................................6
Page i
Summary
This paper focuses on the liberalisation process that began in the late 1970s,
early 1980s in the European Union. The aim of the paper is to identify the main
objective of the ICT regulation which accompanied the liberalisation process and
to describe the outcomes of the emergence of regulatory regimes in national
telecoms sectors throughout the EU. In order to reach these aims the paper will
look at the general motives behind the drive for liberalisation of public
telecommunications, as well as describe the unique supranational institutional
setting of the EU and its interaction with Member State governments in the
process of liberalisation.
Page ii
Context of liberalisation and main objectives of EU’s ICT
regulation
The institutional setting of the European Union is unique and at that time the
Commission’s involvement in the liberalisation process from a supranational level
was unprecedented. The decision to act at a European level was motivated by the
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importance of the telecom sector: “The reasoning at that time was that the
European dimension could offer these sectors new prospects for growth and
competitiveness. In turn, these sectors could contribute to the realisation of a
European dimension in other economic sectors, such as micro-electronics,
consumer electronics, advertisement etc.” (Pauwels, Delaere 2007)
Similar reasoning can be identified when we take into consideration another key
factor – globalisation, which can be viewed as pressures arising from international
telecoms’ market dynamism and the technological advances happening in the field
(Humphries and Padgett, 2006). The first – market dynamism – shed light on the
benefits of free(er) international markets for telecoms, stressing that competition
is a “positive sum game” and emphasising the opportunities of growth that it
brought about, including positive spillover effects into other industries (e.g.
banking, shipping etc.). The second – new technologies – exposed the cracks in
the natural monopoly assumption. The so called “electronic alliance” 1 provided a
strong support to liberalisation (Eliassen and Sitter, 2008), much welcomed when
faced with the powerful national monopolies lobby. One can also consider as an
effect of globalisation the emulation, to some extent, of successful liberalisation
models – the American and the Japanese one – by European regulators and
competition advocates.
In light of the facts presented above – the political and economic context in which
liberalisation occurred in Western Europe and the additional factor of
globalisation – two conclusions seem appropriate. First, liberalisation and the
regulation of European telecoms was a product of both economic and political
concerns. As Eliassen and Sitter (2008, 56) observed “most of the actual
privatization processes have been shaped by practical concerns and political
games”. Second, the main objectives of the liberalisation and regulatory processes
were, on one hand, providing the necessary institutional frame for growth and
development of the telecommunications, as well as other crucial sectors of the
economy. On the other hand, politically, the objective was to pave the way for the
Single Market and the implementation of supranational policies, the competition
policy more precisely.
1
The “electronic alliance”, also cited by Pauwels and Delaere (2007, ) consisted of “large
corporate users, multinational companies and it equipment suppliers” (Eliassen and Sitter, 2008)
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Evolution and outcomes of ICT regulation in the EU
The steps the Commission took in order to establish the European regulation for
ICTs were proof of the shift of power from the national to the supranational level.
This trend would only become more evident with the refinement of competition
policy over the years and with the deepening of the European integration process.
It is interesting to asses the impact of EU’s ICT regulation by taking into account
the role the Commission played in relation to national governments during the
different stages of liberalising telecoms markets.
As a result of “political games” (Eliassen and Sitter, 2008) and given the variety
of capitalism in Western Europe, the outcome of the liberalisation process was
Page 3
uneven across the EU, in terms of type, pace and scope of regulatory regimes that
emerged. Many countries adopted the American system of national independent
regulatory agencies (NRAs) and were granted the liberty of choosing which
methods to use when implementing EU regulation. Therefore, while the
Commission claimed some victories and managed to dismantle the national
monopolies of the past and infuse competition in an increasingly free market, it
did not win the war.
Conclusion
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dynamics, new technologies, political ideology shift and public finance
constraints) and gradually implement the changes that led to the emergence of
regulatory regimes in the EU.
Page 5
References
Pauwels, Caroline and Simon Delaere. 2007. The political and regulatory
framework towards a European Information and Knowledge Society. In The
privatization of European telecommunications, Eliassen, Kjell and Johan From
eds. Hampshire: Ashgate.
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