Where Should the European Union Intervene to Foster the Internal Market for eComms? (*)

Abstract: This paper analyses when EU intervention is needed to achieve this internal market for electronic communications. It sets legal and economic criteria to determine the appropriate scope of the EU intervention. It applies these criteria to several case studies and concludes that sometimes the EU intervention is not always justified (such as regulation of mobile termination rate, price control of Next Generation Access networks), whereas in other cases EU intervention is justified (entry regulation, international roaming, spectrum). The paper calls for a more open debate of the concept and the means to achieve the digital internal market. It also submits that EU intervention should focus on the areas where its benefits are the highest (in particular given the possibilities of economies of scale provided by the technology or the cross-country externalities), and where its costs are the lowest (in particular given the heterogeneity of national preferences or the need for regulatory experimentation and competition). In particular, this paper calls the Commission to use its new power on regulatory remedies with extreme caution, especially in the context of the deployment of NGA, given the uncertainty on the best form of regulation. Key words: electronic communications, internal market, regulation, subsidiarity, fiscal federalism. any European Commission policy initiatives and independent studies, of which this special issue of Communications & Strategies is an example, show a renewed interest in the progress towards the achievement of the internal market for digital services, whether on the content part (e.g. electronic commerce or e-government services) or on the infrastructure part (i.e. electronic communications networks and services). The Digital agenda for Europe, one of the seve