The main stumbling blocks were removed yesterday evening (30 March) in the last round of negotiations between the Council, the European Parliament and the European Commission, paving the way for a major review of electronic communications in the EU, according to converging sources from the three institutions.
More power to the Commission
The EU executive obtained stronger powers to counter national decisions which could hamper the consistency of the EU internal market. So far, Brussels has been firing blanks by imposing its views by means of non-legally binding recommendations.
With the new rules in place, the Commission will keep on issuing recommendations. But its power will be strengthened by the possibility to issue "legally-binding decisions in the event that recommendations are not applied after two years," a Commission official told journalists.
National diplomats confirmed the introduction of the new legal instrument, but played down the significance of the situations in which the Commission will be able to use its new powers. Commission officials, meanwhile, insisted that its competences concern highly-sensitive subjects for telecoms operators, such as mobile termination rates or optical fibre deployment.
Information Society Commissioner Viviane Reding also obtained partial backing for her requests to give the Commission veto powers on remedies decided at national level. Remedies are measures used to correct anti-competitive behaviour, but could be exploited by national regulators to grant national champions an edge over smaller competitors.
Veto power over such decisions will be shared between the Commission and a new EU telecoms agency, BEREC (Body of European Regulators for Electronic Communications). In practice, to prevent national remedies, the Commission will issue "binding recommendations" against the measure, provided that it musters the support of the majority of BEREC members (which are the 27 national regulators). Should such support be lacking, Brussels would merely issue a recommendation.
However, doubts have been raised as to the legal effectiveness of "binding recommendations", which in a way are a contradiction in terms, since a recommendation is a non-binding legal instrument, according to current EU rules.
The new telecoms agency
The three institutions agreed on the functioning of the new agency, BEREC. First, it will be an agency, and not a private body, as initially supported by many member states. Its budget will thus be funded by the EU. What is still unclear is the number of officials it will use (between 10 and 25) and where it will be located, although it seems likely it will be in Germany.
Spurring investment in optical fibre
The deal seems to rule out the so-called risk sharing requested by the major EU telecoms companies to offset the risk of building new networks (NGNs). The compromise text calls for "ensuring access obligation by taking appropriate account of the risk" incurred by the investor. Smaller operators will therefore pay a "risk premium" to access the networks put in place by incumbents. But they will not be forced to participate in initial investment to access the fibres. Debates still continue about the definitive wording.
Functional separation
The debate on functional separation between services and network activities sets states like the UK and Sweden, which support this competition-boosting measure, against countries like Spain and Germany, which are against it. The final deal incorporates the possibility of only using functional separation as an "extraordinary measure", provided that a range of conditions are met.
Broadband as universal service
The telecoms deal introduces the notion of broadband as a universal service, which has so far been applied to fixed telephony, for example. This implies that telecoms operators will be obliged to offer nationwide coverage for high-speed Internet services, which at the moment serve 93% of European territory. The actual use of these services is currently limited to less than a quarter of EU households.
Unresolved issues
The Parliament seems reluctant to give up on protecting Internet users and Internet service providers, at risk under incoming French rules that give a special authority the right to ask that the connections of those in violation of national anti-piracy rules be blocked. MEPs want to maintain a reference to judicial authorities as the only authorities allowed to issue such orders. The Council deleted this stipulation from the compromise text.
Other unresolved issues concern the reallocation of freed radio frequency (the so-called digital dividend), the neutrality of the Web, which could be hampered by new security requirements that make it more difficult, or impossible, to use services such as Skype. Moreover, debates on e-privacy issues related to the package will be addressed in a further inter-institutional meeting scheduled for next Thursday.
