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Reding threatens to cap data roaming in July

And wants half of digital dividend

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EU Telecoms Commissioner Viviane Reding put the frighteners on operators and national regulators today, by reiterating her July 1 deadline to cut data roaming rates and making a grab for the digital dividend.

The GSMA reckons that the cost of data roaming in Europe has already dropped 25 per cent in the last six months, but that's not enough for Ms. Reding, who has an axe and is willing to use it: "I am not impressed by this ... if this stays unchanged until 1 July ... regulatory intervention will be necessary again" she told a meeting of 27 European telecoms ministers.

We've already noted that there's not a lot the industry can do against the self-styled "consumer champion", who sees the imposition of a cap as another opportunity to demonstrate what a great organisation the EU is. If the operators started giving away international data she'd probably still cap it. The publicity is just too good to resist.

Even with her planned super-regulator firmly laid to rest she's still plotting a shot at mandating what member countries do with their digital dividend. Speaking after her meeting with national telco ministers yesterday she made clear she'd like to see half the newly-available spectrum earmarked for telecommunications to avoid the broadcasters and incumbents buying it all up.

"Let me make a very bold proposal" she suggested, "Let us agree to allocate, by 2010, 50 percent ... to new mobile and wireless services. This would allow us to turn the dream of broadband for all Europeans into a reality."

The idea that broadcasters are about to leap in and buy up the digital dividend is laughable. The failure of satellite broadcaster Worldspace to secure some of the UK's L-Band spectrum - spectrum that is supposed to be earmarked for satellite broadcasting - demonstrates just how little money broadcasters have to spend right now.

Reserving parts of the dividend for new entrants to increase competition is only useful if there is insufficient competition currently, and if there's enough business to sustain more players so those new entrants don't just get snapped up by the incumbents after the moratorium ends.

In the UK Ofcom wants to see the free market shake everything out, believing any restriction on usage leads to less efficient utilisation. The regulator's plans to allow the resale of spectrum would make it difficult to prevent incumbents buying spectrum up from other purchasers.

The EU is not generally a fast-moving organisation, but Viviane Reding has shown she can make things happen with surprising speed when she wants to. Preventing Ofcom selling off the digital dividend before the EU can decide on a policy won't be easy, but she's certainly going to try. ®

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