Single EU telecoms market proposal ambitious, necessary, but probably not enough

The European Commission has adopted what it is calling its “most ambitious plan in 26 years of telecoms market reform”. The proposed revamp should see a reduction in consumer charges, and will simplify red tape faced by companies, bringing a range of new rights for both users and service providers.

For more , see Aphaia’s White Paper ‘Review of the new EU Electronic Communications Regulatory Framework proposal‘.

 

Clearing the mess

The ‘Connected Continent’ legislative package, launched by Commission President Jose Manuel Barroso in his 2013 State of the Union speech, is to unite the 28 national telecoms markets into a single EU telecoms market and clear the “regulatory mess” of differing prices and rules.

“The European Commission says no to roaming premiums, yes to net neutrality, yes to investment, yes to new jobs. Fixing the telecoms sector is no longer about this one sector but about supporting the sustainable development of all sectors,” said Neelie Kroes, Vice-President of the EC in charge of Digital Agenda.

Aphaia’s Chief Consultant Boštjan Makarovič agrees, adding that, while the Commissions’ plan is ambitious, it is necessary in some form or another if we wish to ever realize a single European electronic telecoms market.

 


Building A Telecoms Single Market: extracts from the press conference

 

No more roaming charges, simpler ways of changing contracts

The proposed telecoms plans bring several benefits for end users.

Under the new plans, telecoms operators would be banned from charging incoming call charges for consumers travelling in the EU from 1 July 2014.

Companies would have the choice to either offer phone plans that apply everywhere in the EU (“roam like at home”), or allow their customers to opt for a separate roaming provider who offers cheaper rates (without having to buy a new SIM card).

All other roaming charges – charges for outgoing calls, SMS, and data – are to be slowly phased out.

Calls will also be cheaper from a user’s home country: telecoms companies will no longer be able to charge more for a fixed intra-EU call than they do for a long-distance domestic call. For mobile intra-EU calls, the price will not be more than €0.19 per minute (plus VAT).

Protecting the consumer will be simpler ways to change contracts that will be harmonised across Europe, and the right to clearer and more comparable information in these contracts.

 

Cutting red tape and providing regulatory certainty for operators

The legislative proposal is also expected to cut red tape for service providers operating in Europe.

Operators wanting to provide services in several Member States must currently be authorised in each of them. In an effort reduce unnecessary administrative hurdles, the new proposal introduces a single EU authorisation for providers, guaranteeing more consistent rights and obligations for providers to operate across the EU.

In addition, a new Commission Recommendation on Costing Methodologies and Non-Discrimination will aim to reduce divergences between EU regulators by further harmonising and stabilising costs that incumbent operators may charge for giving others access to their existing copper networks; and ensuring that access seekers have truly equivalent access to networks.

As a consequence, the prices for wholesale access to Next Generation (NGA) broadband should be determined by the market rather than regulators, easing the administrative burden of operators. A European wholesale virtual broadband access product should be standardised across the EU.

 

Protecting the openness of the internet

The package also foresees legal protection for open internet, the so-called Net Neutrality.

Blocking and throttling of internet content would be banned, giving users access to the full and open internet regardless of the cost or speed of their internet subscription. However, with privileged add-on services still allowed if certain conditions are met, it remains to be seen what effects the provisions will actually have on the way the services are currently provided.

Consumers would have the right to check if they are receiving the internet speeds they pay for, and to walk away from their contract if those commitments are not met.

 

Coordinated spectrum assignment

To ensure higher availability of 4G mobile access and Wi-Fi, the Commission proposes to coordinate the timing, duration and sale conditions of spectrum frequencies, in an attempt to give operators more certainty when investing across multiple European markets.

Although Member States would retain overall control of the process of spectrum sales, they would be subject to scrutiny and sanctions from Brussels. It remains to be seen how Member States would react to this, bearing in mind the importance of their revenue from spectrum auctions.

 

Is lack of unified regulation really the main obstacle?

The ‘Connected Continent’ package must now be approved by the Member States and European lawmakers before it can be put into effect. But all is not that simple.

“While single authorisation, coordinated spectrum assignment and unified wholesale products are elements that are necessary for a single market, two things nevertheless have to be kept in mind,” warns Aphaia’s Boštjan Makarovič.

“Firstly, the market is not fragmented only because of different regulatory jurisdictions, but also because liberalisation has not been fully implemented: in Member States fixed networks are still predominantly controlled by former state monopolists. Secondly, it is questionable if the new proposal can significantly contribute to new NGA investments. That regulation has been the main obstacle to achieving the latter is more of an ideological that an empirical claim.”

 

Picture: European Commission

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Ursa Primozic

Ursa Primozic

Ursa Primozic has been with Aphaia since its foundation. With several years of experience within the telecommunications sector, she is in charge of communications management and media policy and regulation analysis.
Ursa Primozic