Παν. Βουρλούμης εναντίον ΕΕΤΤ και ρυθμιστικών αρχών γενικώς

Επειδή άλλο πράγμα είναι να τα διαβάζεις από δεύτερο χέρι και άλλο να τα βλέπεις με τα μάτια σου, ακολουθεί στα αγγλικά η ομιλία του Παν. Βουρλούμη για να βγάλει και ο καθένας τα συμπεράσματά του.

What I am going to say may not please everybody. My comments, however, concern the institution of regulation in telecoms and not any individual regulator. The few I know are very nice people trying to do a very difficult job as best as they can.

As head of two regulated incumbents it is natural that my views on the subject reflect the concerns of the regulated. Also they reflect my personal opinion as a citizen and as an economist specialized on development and I hope a good European. I believe that it is useful for all voices to be heard on the subject, even if one runs the risk of being accused of prejudice. Indeed it is impossible not to be prejudiced. Regulation, the word itself is a political statement. Once the idea is adopted it becomes an empty shell ready to receive any content which the powers that be chose to fill it with.

In telecoms, the often sybilic dictates of Brussels are interpreted differently by member country regulators. Starting at one end from a laissez faire attitude we go to the other end of Napoleonic ambitions to radically reform the industry. Some regulators believe they own the incumbents. In between we have variations and dogmas all claiming to be the right interpretations of Brussels, much as all Christian sects claim to be the true interpreters of the Gospels. It would be amusing, if it was not deadly serious for the industry, to follow the argument of whether there should be one all powerful European super Regulator or not. A fight between EU statism and local statism in the name of the interests of competition and the consumer. In reality, a clash of ambitions and agendas.

Regulation can be a serious threat for the industry, and I do not mean only for the incumbents. It is both at EU and national levels – in most cases – a constitutional anomaly. Regulating Authorities are bodies vested with the power to legislate, interpret the law, apply the law, be the judge and the executioner. They are financed by the taxpayer and are accountable to no-one. At a time when democracy and accountability are considered the foundations of our system we have legitimized bodies, not only in telecoms, which in many cases can act with impunity, above the law.

Regulation is about interests and the regulator redistributes money, not his own. It is essential for a Regulators credibility not only to be but also to appear impartial.

I have given you a summary of my views about the weaknesses of the Regulating industry, as it is set up in Europe today but I have no illusions. Regulation is here to stay. What must be done is to try to eliminate its weaknesses and to start by making it accountable and legally liable for its actions and mistakes. Not an easy task but I am glad to read that in the country that is hosting this conference there is a lively debate on the subject. A similar debate is, I understand, taking place in the corridors of power in Brussels. Things take time to change there and in the meantime here are some practical suggestions and comments on how the situation could be improved, for the industry as a whole and for the competitiveness of Europe.

Regulators should give up police and schoolmistressy attitudes where these exist and sit down with the incumbents and where applicable with the responsible Ministries to decide on a long term policy of telecom development. In each separate country and then at a European level.

I suggest that large companies listed in stock exchanges follow much more transparent procedures than most regulators and treating them with consideration and listening to their views would be more productive. In many cases today this does not happen. Incumbents are regarded with suspicion and considered guilty in advance. Indeed Regulation in Europe has imposed its own negative way of looking at the industry, even on some incumbents.

Incumbents possess enormous know-how and are powerful development engines in an economy. In an industry which requires very deep pockets and must take big risks because of technological change it is to everyone’s interest for the incumbent to be treated not as the whale which will be fed to the sharks. The countries that have understood this have the best results and the healthiest industries.

Very large investments need careful planning, heavy financing and take a long time to be implemented and bear fruit. The business risks are considerable. If Regulatory risk is added the investment may not be worth it. Regulatory certainty, a stable horizon, is absolutely necessary for investment.

Uncertainty is poison for planning. We now have to contend with the scarecrow of functional or structural or whatever separation. It is a reasonably sounding theoretical proposal to make eggs out of an omelet. It does not tell us how of course. As Brussels does not seem so enthusiastic about it any more they are passing the buck to the local boys. Be nice or I will chop you up. How conducive is this to a productive dialogue? Even if the idea could have merit in some cases, the way of serving it kills it.

Not all countries are the same. In some, fixed lines cover almost 100% in other like Romania less than 25%. In some, like Britain, regulation has been in place for decades, in others it is new. Some markets such as Germany, Italy, France, Britain are huge, other are small or even tiny like Cyprus and Malta. In most countries the industry developed before the regulator came in. Often it developed in an anarchic or individualistic way. In some countries like Greece and Germany the incumbent is still suffering from legally imposed rigidities which raise their cost of operation. Rigidities which do not exist for their competitors. One thing, however applies everywhere. The economics of the business require a certain critical mass if an enterprise is to survive. By critical mass I mean a certain number of paying customers to cover the overhead and all other costs. Regulation that encourages fragmentation and the survival of the unfitest is bad for the industry and bad for the economy.

Technology in telecoms is moving very fast. Much faster than regulation. Regulators often chase yesterday’s realities and a case to the point is convergence. The combination of fixed and mobile features in the same products is here to stay and will continue to spread. This is urgently creating the need to redefine markets and the meaning of what is a dominant position. In some instances, regulation, rather than promoting technological progress, inhibits it by refusing to recognize that risk must be rewarded and investment must have a return or it will not happen. I suggest that, both at the local and European level, Regulation should study deeper the trends of the industry. Regulators and Governments have to make choices. Development and consumer interests may sometimes seem contradictory but only in the short run. Investment should not be sacrificed to the populist slogan of ever cheaper services. Often Regulators impose prices on incumbents arbitrarily following non transparent methods. Such methods distort the market, inhibit investment and damage the industry on a national and European scale.

Ladies and Gentlemen,

Anyone who lives in a European country knows that there is fierce competition in telecoms. It is probably the only sector where prices are continuously coming down, the consumer has infinite choices, services are improving. Is this because of Regulation? Maybe they should receive some of the credit though mostly Regulation is taking a free ride on the wave. I believe that the main factors responsible for the advancement of the industry have been the liberation of the market, the breaking up of legal monopoly power and technology. It was a matter of time for competition to happen, for the incumbents to lose market share and for the market itself to grow. Not a zero sum game. Where regulators try to force unreasonable speed on the process they do more harm than good.

Be as it may, with some contribution by Regulation, Europe has now a vibrant, competitive and creative industry and market in Telecoms. Countries which were lagging behind are catching up and the industry is at the head of progress. Regulators should be happy but they are not. Instead they feel nervous. The job they were set up to do is done or almost so. Congratulations and go home?

But bureaucracies are survivors. We, the industry, know that European telecom regulation will never stop inventing reasons for its continuing existence. Let’s hope that at least it becomes more accountable. Regulation should be regulated.