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Editor: D. Daniel Sokol
University of Florida
Levin College of Law

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Monday, July 28, 2008

European Regulators in the Network Sectors: Revolution or Evolution?

Posted by D. Daniel Sokol

Saskia Lavrijssen and Leigh Hancher, both of Tilburg University - Law have authored European Regulators in the Network Sectors: Revolution or Evolution?

ABSTRACT: The coming into force of the electronic communications directives, the energy directives and Regulation 1/2003 has given the European Commission a new set of instruments to safeguard the uniform application of European law by the 27 independent national regulatory authorities founded by the member states in implementation of European legislation. On the one hand, the Commission has itself acquired wide-ranging powers to monitor and regulate the national authorities both directly and ex ante. It has the power to formulate ex ante rules, including binding comitology guidelines and European policy rules which, on the grounds of Article 10 EC and specific co-operation obligations laid down in European legislation, national authorities must take into account when exercising their powers. The Commission also has the power, in the interests of uniform application of European law, to intervene ex ante in national procedures by making comments, vetoing decisions and/or removing a national authority from a case. On the other hand, the Commission has increasingly used 'hybrid' forms of regulation through the founding of independent European networks of national regulators. Within these networks, the national regulatory authorities in the various member states must co-operate with each other and with the Commission to guarantee uniform application of European law. These networks include the European Energy Regulators Group (ERGEG), the European Regulators Group for Communications Networks and Services (ERG) and the European Competition Network (ECN). A network of financial regulatory authorities had already been set up earlier in the financial sector, in the form of the Committee of European Securities Regulators (CESR).

The European networks of national regulators are hybrid in nature. Their lack of legal personality means they do not have the status of 'EU independent agencies' which, established on the basis of European regulations, do have legal personality and are able to carry out their daily tasks at one remove from the European institutions. Neither are the European networks national agencies. The independent European networks of national regulators are increasingly manifesting themselves as autonomous entities. Through hybrid forms of regulation (such as Common Positions or European policy rules) created as a consequence of the interaction between informal European and national actions, they are able to influence the decisions of both the Commission and the national authorities.

As part of the reform of European legislation in the network sectors, the Commission is currently looking at the possibilities for uniform application of European law in the member states and looking at ways of improving the co-ordination between the different national regulatory authorities (see section 6). The Commission wishes to increase its own ex ante powers and is examining whether the role of the European networks of national regulators could be further strengthened by the creation of 'European networks plus'. It recently published a proposal for a Regulation founding a European Agency for the Co-operation between Energy Regulators. As this paper will show, owing to the hybrid nature of the European networks and their actions, there are a number of 'accountability gaps' both in the present situation and in the proposals for the 'European networks plus'.

This article analyses the problems which arise with regard to the political and legal accountability of the independent national regulatory authorities which work together with each other and with the Commission in the European networks of national regulators or the 'European networks plus'. It devotes attention to the political monitoring by and accountability to the European Parliament and/or the national parliaments at the European and national level, respectively, and to the potential role of judicial oversight by the European Court of Justice and the national courts. A distinction is consistently drawn between the present situation of more informal co-operation between the national regulatory authorities in the European networks and the strengthened co-operation within the 'European networks plus'. This article also makes a number of proposals for improving the accountability of the 'European networks plus'.

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