The current and future European regulation of electronic communications: a critical assessment

The current European regulation for electronic communications is applicable since 2003 and is under a review that should lead to new rules applicable by 2010-2011. This paper aims to assess the implementation of the current regulation and the proposals for reform tabled by the European Commission. It is argued that those proposals go in the right direction but should go further. First, the regulatory framework should clearly state that the objectives of regulators is to maximise the long term welfare of the European citizens. Second, the main body of economic regulation - the so-called Significant Market Power regime - should be based on a strong test aiming to identify structural market problems that can not be efficiently dealt with by competition law. Third, the possible remedies applicable by the regulators should include structural and technological remedies, provided that a strict cost benefit analysis is undertaken. Fourth, the institutional design should be improved by better aligning the incentives of the National Regulatory Authorities with the dynamic nature of the markets, by improving the checks and balances (in particular those provided by national courts and European Commission), and by improving coordination amongst the institutions (the National regulators and the National Courts).