RD265 - ETNO Reflection Document on a functional separation remedy in telecoms

Functional separation on a voluntary basis – irrespective of the underlying reason – should remain the decision of individual companies.  ETNO is concerned that current Commission discussions on a potentially mandatory functional separation remedy are out of touch with the realities of today’s competitive multi-platform telecommunications markets. It would damage prospects for deregulation by creating artificial business units in need of permanent regulatory oversight and lead to an increased fragmentation of the European market.  The current elaborate set of remedies already aims at ensuring non-discrimination. Shortcomings in national implementations would be aggravated, not solved, by putting another remedy at the disposal of the regulator. Such an irreversible tool is far more costly and disruptive than other remedies under the current EU Framework. It is likely to result in underinvestment and creates uncertainty while Europe’s broadband development requires massive investment in NGA.    

ETNO takes a strong view against the introduction of a functional separation remedy and until the review of the EU framework takes place, Member States and NRAs should refrain from enforcing such far-reaching measure unilaterally.