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EU Telecoms Commissioner Viviane Reding has been telling delegates at the Summit of the European Telecommunications Networks in Venice that letting the EU regulate their industries will save €20bn a year, and is just what the Americans want.

Efficiency isn't something that comes quickly to mind when considering EU bodies, but Ms Reding is adamant that without an EU regulator American companies will have an advantage with their single market and continent-wide businesses.

The speech compares the break-up of the national monopolies to the dismantling of AT&T in the USA, while noting that the EU approach has been to slowly introduce competing companies rather than forcibly breaking up the monopoly (though a nice diagram of the results of the US break-up has just been produced by neat-o-rama).

Continuing this analogy, the good commissioner reckons the EU is only halfway there, with unification of the regulatory bodies an obvious next step.

Her argument is largely based around the idea that companies can't operate across Europe without a single regulator, and thus suffer compared to their US equivalents that only have to answer to the FCC. This argument is rather undermined by the fact that between them Deutsche Telekom, Vodafone, Telefonica and Orange have three out of four EU citizens as customers, the four dominant providers apparently coping fine with 27 separate regulators.

Of course, Deutsche Telekom is more than 30 per cent owned by the German Government, while the French have a similar stake in France Telecom (owners of Orange), which isn't ideal.

Reding also points out that some regulators are clearly acting in a political, rather than regulatory, manner. "Operators will be hesitant to invest in the promising Romanian market if the chief of the national telecoms regulator can be fired twice within three years, followed each time by a complete reorganisation of the national regulatory authority by Government Emergency Decree!" But whether the poor performance of one regulator justifies an overriding EU force is another matter entirely.

The problem is that the EU is not a single country, and the approach to regulation cannot be unified without adopting an EU culture. For example, Viviane Reding would see radio spectrum reserved for watching TV on mobile phones, across Europe, in an arrangement that would cost industry a lot more than €20bn if it turns out no one wants to watch TV on the move.

National regulators will fight tooth and nail for control of their national airwaves, but Reding is fighting a long-term battle - and while the regulators must constantly defend their position, the EU only has to win this argument once. ®

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