Whilst the aim of this Green Paper is to invite comment and stimulate debate, rather than take positions at this stage, this Chapter, drawing on the previous analysis, sets out in Section V.1 below a number of principles which could provide a common basis for future approaches in the sectors affected by convergence. In Section V.2, it sets out three options which the Commission believes may stimulate debate regarding the adaptation of current regulatory approaches, where required, in the light of the convergence phenomenon.
Irrespective of whether or not full convergence occurs, the range of technological and market trends, the potential barriers and the regulatory issues identified in this Green Paper, all point to a changing environment against which the policy objectives of these sectors must be judged. Future decisions must therefore not only be derived from regulatory approaches closely tailored to the sectors involved. They should also be able to draw on a common understanding of principles which could underpin future action.
In this section, the Commission tentatively puts forward five such principles for comment.
1. Regulation should be limited to what is strictly necessary to achieve clearly identified objectives.
Given the speed, dynamism and power of innovation of the sectors impacted by convergence, public authorities must avoid approaches which lead to over-regulation, or which simply seek to extend existing rules in the telecommunications and media sectors to areas and activities which are largely unregulated today.
Any rules put in place should be tailored to meet clearly identified objectives in a proportionate manner,
2. Future regulatory approaches should respond to the needs of users
A key priority of any regulatory framework should be to seek to meet the needs of users in terms of offering them more choice, improving levels of service and lower prices, whilst fully guaranteeing consumer rights and the general public interest. Such an approach is fully consistent with wider policy goals which recognise the important role of many of the sectors in bringing the Information Society into citizens' everyday lives.
3. Regulatory decisions should be guided by a need for a clear and predictable framework.
Regulators should seek to ensure a clear and predictable framework within which business can invest. Where issues can be left to market players, this should be made clear. Where new activities creates uncertainty as to how and if they should be regulated, this should be clarified.
This does not mean that the framework may not evolve, but it should do so against predetermined criteria, maintaining as far as possible the flexibility to respond to changes in a fast-moving market.
4. Ensuring full participation in a converged environment.
Building on existing concepts of universal service in telecommunications and the public service mission in broadcasting, public authorities should seek to ensure that everyone is able to participate in the Information Society. Convergence in this context is likely to offer new means of participation.
5. Independent and effective regulators will be central to a converging environment.
Whilst the general trend is towards lighter regulation, the increased competition brought on by convergence underlines the need for effective and independent regulators. Regulatory independence is particularly important where the state retains a share-holding in any market player.
If it is established that there is need to consider changes to the overall regulatory approach in the face of the trends towards convergence, there may be many ways of achieving such an adaptation.
In considering possible approaches, a successful formula is likely to require more than just the creation of a flexible framework for new types of services. It would also be essential to provide a road map which allows the existing framework to adapt or be adapted at a pace which continues to ensure fair, non-discriminatory market conditions and which provides that users' interests are well served.
The speed and manner in which change is managed are at the heart of the transitional issues. This Green Paper cannot propose a specific time table. Nevertheless, the Commission anticipates the debate focusing around three basic options for regulatory developments, though such a list is neither intended to be comprehensive nor closed.
Option 1: Build on current structures
In this situation, current vertical regulatory models would be left in place. This means that different rules apply in telecommunications and audiovisual/broadcasting sectors, and to a lesser extent in publishing and IT. Building on established principles, these existing frameworks at a EC and national level would be extended on an ad hoc basis, principally at national level, to meet the demands of a competitive market and the challenges of new technologies and services.
Normal principles of interpretation would be applied on a case by case basis to resolve questions of where particular activities might fall. To the extent necessary, co-ordination might be strengthened at a European level to attempt to minimise the risk of fragmentation through national rules being applied differently in different Member States to emerging services.
The pace of change would be dictated by the speed of innovation and the effectiveness of competition. This would allow the regulatory framework to adapt in response to market forces and the need for a fresh round of deregulation/regulation could be avoided.
Such an approach would minimise the need for change in the near future, and could be effective in providing a predictable regulatory framework for investment, whilst avoiding the creation of unjustified barriers within the internal market. However, it might leave in place certain anomalies which today deter investment.
The pace and scope of change, if not co-ordinated at a European level, could risk creating significant new barriers between Member States and slowing the transition to the Information Society.
Option 2: Develop a separate regulatory model for new activities, to co-exist with telecommunications and broadcasting regulation
This option would mean that Member States would "carve out" new services and activities which cross traditional boundaries, placing them under a distinct set of rules, if rules are needed at all. This would allow a co-ordinated approach to be developed in relation to many of the high value activities which characterise the converging market place, by creating a new category of services alongside existing regulatory models for telecommunications and broadcasting. Essentially, the result would be to move away from technology-based or platform-based market boundaries for a wide-range of services, whilst allowing the framework for traditional core telecommunications and broadcasting activities to be adapted more gradually.
The principle difficulty in such an approach is determining the boundaries of what may be part of a lightly regulated, new service world and what remains subject to traditional regulation. One approach might be to identify certain types of service, e.g. Web-TV or the Internet or the operation of conditional access systems, negatively as neither telecommunications nor broadcasting. Experience in the telecommunications sector with a delimitation of liberalised services, on the basis of defining only what is left in the monopoly area, shows the practical difficulties of such an approach.
Option 3: Progressively introduce a new regulatory model to cover the whole range of existing and new services
This option is the most far-reaching. It calls for a fundamental reassessment and reform of today's regulatory environment.
This does not necessarily imply a whole new set of laws, but rather looking to see how existing frameworks can be adapted to promote flexibility; remove inconsistencies, avoid discrimination within and across sectors and continue to ensure the achievement of public interest objectives. Instead of applying to just some services (as proposed in Option 2), this option would create a framework covering all sectors.
This option would require a broader definition of communication services to supersede those of telecommunications and audiovisual services within Community legislation. Proportionality would be a necessary feature of the new environment given that within such a broad definition, the level of regulation would have to be matched to the nature of the service and the intensity of competition.
Such an option might be considered to be too ambitious. However, it would not necessarily lead to sudden disruptive change. The approach could be graduated, focusing in the first instance on priority areas in which a consistent regulatory approach is required (e.g. network operation or access issues). Another key feature of this approach would be to allow sufficient time for migration from the old to a new regime.
Chapter V identifies a number of important policy principles which could underpin future regulatory approaches in the light of convergence. It also proposes three possible ways in which current regulatory approaches in the different sectors might be adapted in order to embrace on-going developments.
(A) What effect will convergence have on the principles for future regulation applied in the telecommunications, media and IT sectors, and should those principles be adapted in the light of convergence?
(B) If convergence requires adaptation of existing regulatory approaches, should that adaptation:
(i) seek to build on, and if appropriate, extend existing frameworks, rather than create new ones;
(ii) create a new framework for many on-line and interactive services, to co-exist with the those currently applied to traditional telecommunications and broadcasting activities, or
(iii) seek to create a comprehensive framework applying similar regulatory
approaches to all three sectors.
The following outline schedule of activities is envisaged:
Interleaved with these milestones will be a number of important activities in the media field. The Oreja High-level Group on audiovisual policy has been convened and is expected to report in September 1998. A major conference on the matter is scheduled to be held in April 1998 in Birmingham, under the joint sponsorship of the British Presidency and the Commission.
This Green Paper analyses the convergence phenomenon and its implications for the existing regulatory frameworks governing the telecommunications, media and information technology sectors.
The implications of these developments are far reaching. Convergence is not just about technology. It is about services and about new ways of doing business and of interacting with society. The changes described in this Green Paper have the potential to improve substantially the quality of life for Europe's citizens; to integrate Europe's regions better into the heart of the European economy, and to make businesses more effective and competitive on global and national markets.
The emergence of new services and the development of existing services are expected to expand the overall information market, providing new routes to the citizen and building on Europe's rich cultural heritage, its potential for innovation and its creative ambitions.
The global nature of communications platforms today, particularly, the Internet, are providing a key which opens the door to the further integration of the World economy. At the same time, the low cost of establishing a presence on the World Wide Web, is making it possible for businesses of all sizes to develop a regional and global reach. Globalisation will be key theme in future developments, as changes in Europe are mirrored by developments all over the World.
If Europe can embrace these changes by creating an environment which supports rather than holds back the process of change we will have created a powerful motor for job creation and growth, increasing consumer choice and promoting cultural diversity. If Europe fails to do so, or fails to do so rapidly enough, there are real risks that our businesses and citizens will be left to travel in the slow lane of an information revolution which is being embraced by businesses, users and by Governments around the World.
The issue involved are complex and will require much discussion before any new Community initiatives can be proposed. The Green Paper is intended to launch such a discussion and all interested parties are invited to participate. It is hoped that this discussion will be profound and far reaching. The results of this public consultation will be reported in a Commission Communication in June 1998.
This Green Paper represents a step on the way to securing the benefits of convergence for European social and economic development. The June Communication will allow political positions to be taken by the European Parliament, the Council of Ministers, the Economic and Social Committee and the Committee of the Regions, and for clear objectives for future policy to be established.
This Green Paper initiates a new phase in the European Union's policy approach to the communications environment. As such it represents a key element of the overall framework put in place to support the development of an Information Society. It builds on the current strengths of the frameworks for telecommunications (launched by the landmark 1987 Green Paper on telecommunication[66]) and for media (established by various Community legislative initiatives), and offers all interested parties an opportunity to comment on the future shape of regulation, in the post-1998 communications environment, in the sectors affected by convergence.
This first step is intended to pave the way for the development of an appropriate regulatory environment which will facilitate the full achievement of the opportunities offered by the Information Society, in the interests of Europe and it's citizens as the 21st century begins.