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 Monday, November 20, 2006

On 16 November 2006, during the ECTA Conference 2006, Ms Viviane Reding, Member of the European Commission responsible for Information Society and Media spoke on From Service Competition to Infrastructure Competition: the Policy Options Now on the Table.

In her speach Ms Reding focused on recent trends in the European ICT sector. She discussed issues related to the efficient regulation, liberalization process, spectrum, investment, competition as well as "separation" stating:  

"...we have to be clear as to what is meant by terms like “structural separation” and "functional separation". The term "structural separation" has been used to mean several things: full divestiture of companies; legal separation with separate management structures; functional separation of organisational and management structures within vertically integrated undertakings; and simple accounting separation of specified activities within vertically integrated undertakings. I have expressed myself already in June in favour of finding a European way on the separation issue.

I believe that functional separation, which is a specific form of separation in the large sense as just described, could indeed serve to make competition more effective in a service-based competition environment where infrastructure-based competition is not expected to develop in a reasonable period. It may be a useful remedy in specific cases. It is certainly not a panacea. A cost benefit analysis therefore has to be made on a case by case basis, before such a remedy is imposed. And the effects of imposing such a remedy in Europe’s internal market have to be carefully analysed in each individual case. Functional separation is certainly a field where one will not be able to do without the “two pair of eyes” principle. "

For full version of the speach, please see here.