Advancing in Europe

Intercomms talks to ECTA'S Ilsa Godlovitch

Ms Godlovitch is responsible for developing and delivering on the regulatory and policy agenda at ECTA, the trade association representing 150 competitive (non-incumbent) operators across Europe. Prior to joining ECTA in June 2005, she was EU Affairs Director at Cable & Wireless and also represented C&W's international businesses in developing countries outside Europe during a period of widespread liberalisation in the sector. Whilst at Oftel (the UK Telecoms Regulator), Ms Godlovitch was responsible for European Affairs and negotiated for the UK Government on the current EU Framework for Communications. She was previously a technology journalist. She holds an MA in Classics from Oxford University and a Postgraduate Diploma in Economics from London University.

Q: What are the key regional problems facing the Service providers in Europe today?
A:This is a time of both great opportunity and risk for service providers. The broadband market has really started to expand and develop – particularly in countries such as the UK which have taken action to open the market to competition, and we see a lot of investment and activity by entrants in this area. However, at the same time, there is a substantial risk that just as entrants make headway in the broadband market, the ground will be shifted from under their feet as incumbents upgrade their access and core networks and potentially try to undermine competitive investments by challenging the regulatory rules that have allowed competition to develop. Another significant challenge for entrants – both in the fixed and mobile space - is addressing demand for converged services which maximise the benefits from both fixed and mobile technologies. Last, but by no means least – those operators trying to offer pan-European services such as VoIP or services to multi-national businesses face the problem that the administrative processes and rules for competitive engagement can be different in every single country across Europe.

Q: How are ECTA helping overcome these problems?
A: ECTA is playing a key role in the debate on how the competitive framework is applied to so-called ‘next generation’ networks and to mobile networks, which are becoming increasingly vital in enabling converged fixed mobile services. We have also been one of the leading voices calling for a stronger role for and formalisation of the European Regulators Group (the group representing all of Europe’s telecoms regulators) to help make regulation across Europe more consistent.

Q: How is Europe responding to the regulation of Next Generation?
A: We have seen some positive developments that support competition, but not enough to prevent what we expect will be a widespread reversal of much of the competitive progress that has been made to date. The decision by the German regulator, supported by the European Commission – that vDSL (very high speed DSL) is not an ‘emerging’ market and that regulation is likely to be necessary to prevent the incumbent from remonopolising broadband services – was a crucial one. And now we have seen a very positive opinion from the European Regulators Group that confirms that view. However, we have concerns that a de facto regulatory holiday will nonetheless be granted through the prices and terms set by regulators for access to the new networks. And we fear that too much reliance could be placed on ‘duct access’ as a solution to next generation issues. Whilst access to ducts will help to lower barriers for entrants to lay their own fibre – it is likely to be useful only in limited cases where there is high demand. Elsewhere entrants will need to use other solutions including wholesale products and access to fibre networks.

Q: How could this be improved?
A: We risk repeating the mistakes of the past if we don’t set up a framework for telecoms that provides certainty for all players in the market about how regulation will be applied – today and looking forward. ECTA believes that functional separation – a mechanism under which bottleneck assets are managed by a separate division within the incumbent operator – could be one way of

achieving this, particularly if it is made clear under the terms of the separation agreement how any network upgrades will be treated. We have seen in the UK that functional separation has already contributed to an explosion in competition for broadband that has helped to propel the market from near the bottom of the EU league table to the top rank. We need to ensure a similar mechanism exists as we move towards IP core networks and fibre access networks.

Q: As a key voice in the Telecommunications Industry in Europe do you feel you have enough say in market changes?
A: ECTA’s voice has been heard in recent debates on next generation regulation and the Framework as a whole. But we are conscious that there are many more voices pushing in Brussels and from some national Governments for a return to an incumbent-dominated telecoms sector. We hope that the benefits of competition will speak for themselves and that policy-makers will make the right decisions for Europe’s consumers and economy.

Q: How would you view Europe compared to the rest of the world in terms of competitiveness?
A: Some of the countries in Europe – particularly some of the Northern countries – are amongst the best in the world in telecoms competitiveness – and that has fed through to productivity growth overall. But there are also a number of countries that are very far behind in opening their markets to competition. Just raising the standard of all countries in Europe to that of the best would give us a substantial advantage in worldwide competitiveness. As for competitiveness in very high speed access, there are lessons that could be learnt from Japan, which has the highest fibre penetration in the world, driven in part through a competitive policy which includes unbundling of fibre.

Q: How do you envisage ECTA's role growing in 2008?
A: 2008 will be a very busy year for ECTA. The Review of the Telecoms Regulatory Framework will be discussed by national Governments in the Council of Ministers and by the European Parliament – and at the same time national regulators are starting the second round of market reviews to determine how to address competitive bottlenecks – including those relating to IP and fibre upgrades. ECTA is in the process of increasing its staff to address these important challenges and we fully expect to remain at the centre of the debate.

For more information visit:
ECTA website at www.ectaportal.com or email us on iGodlovitch@ectaportal.com