EU battles industry plans to restrict Skype on mobile phones

The European Commission is threatening to brandish the new roaming regulation or antitrust rules in order to block plans by major EU telecoms operators to restrict the use of Internet calling services like Skype via their mobile networks.

Replying to a written question by a Socialist MEP, Information Society Commissioner Viviane Reding made clear last week that the new roaming regulation, which entered into force at the beginning of July, is also aimed at avoiding any discrimination between technologies. 

The regulation “stresses that there should be no obstacles to the emergence of applications or technologies which can be a substitute for, or alternative to, roaming services, such as WiFi, VoIP and Instant Messaging services,” she said.

“The Commission is, therefore, taking a close interest” in all initiatives announced by telecoms operators regarding the possibility of blocking the use of Skype’s Internet telephony services, Reding added. Earlier in 2009, Competitition Commissioner Neelie Kroes said an inquiry was “ongoing” into alleged violations of EU antitrust rules by mobile telecoms companies.

Socialist MEP Christel Schaldemose had asked for Reding’s opinion on an announcement made by German mobile telecoms operator T-Mobile that it would impose an extra-charge on consumers using Skype and other VoIP services on its network.

After strong pressure from the press, public authorities and consumer groups, T-Mobile has changed tack, and is now thinking of charging consumers a flat rate for using VoIP together with normal mobile telephony services. The fee will be higher than that requested for using only standard telecoms applications, such as voice calls and text messaging.

Vodafone, the biggest mobile telecoms operator in the world, said it could make a similar move. “You can buy a tariff that allows you to use VoIP, or buy one that prevents the use of VoIP. Customers can make choices. The principle is that we will configure our tariffs to give customers the choice to do what they want. Each customer pays their own economic costs, with no cross-subsidy,” Vodafone’s director of public policy, Richard Feasey, said in a conference in Brussels in June.

Reding had already stated that net neutrality is one of her priorities. This means that controls on networks should be confined only to actions of traffic prioritisation to improve users’ experience and bring value and growth to operators. Internet service providers already operate network management systems which prioritise traffic to companies during working hours and to households at night, in line with market demand. At the same time, they also offer business clients quicker connections for higher fees.

“Exporting this concept to mobile Internet services makes sense, but unfortunately at the moment, the debate is not about network management, but is indeed focused on new illegitimate charges on consumers for the use of free services, which do not bring extra costs to operators,” an EU telecoms expert told EURACTIV, speaking on condition of anonymity.

EU Information Society and Media Commissioner Viviane Reding has stated that net neutrality is a priority and new network management techniques should not be used for anti-competitive purposes. Measures proposed to reform the telecoms sector would protect against abuse of such technologies, she added.

Competition Commissioner Neelie Kroes said: "Since early 2008, the Commission has been monitoring the conduct of mobile network operators with respect to new Internet-based services such as mobile VoIP. The Commission has contacted the parties concerned to clarify allegations of blocking that have been reported in the press. No formal antitrust proceedings have been initiated so far. However, the inquiry is ongoing."

Vodafone's director of public policy, Richard Feasey, said: "If you commit to spend a certain amount on voice, frankly what you do with data is fine. That commitment to spend on voice addresses the economic question concerning the certainty about revenue we generate from customers. If you don't want to make a commitment to use voice, it is effectively saying 'I would like to substitute existing voice usage for potentially VoIP and other services'. Our investment in the customer on the assumption they would spend a certain amount each month would disappear. That makes the economics unsustainable."

Skype is obviously against any limits on the use of its services via mobile phones. "If applied, these plans would mean consumers pay twice. It makes no economic sense. Telecoms operators would damage themselves at a moment when revenues for access to the Internet via mobiles are growing steadily," Jean-Jacques Sahel, director for EU regulatory affairs at Skype, told EURACTIV.

The issue of net neutrality was first debated in the US a while ago, and is now generating intense debate in Brussels. It has also been included in the currently frozen review of telecoms rules (EURACTIV 12/06/09). User groups complain that large broadband networks are restricting services, content and websites.

Tim Berners Lee, often dubbed 'the father of the Web', ranks among the high-profile personalities to have publicly lobbied for regulation to mandate the neutrality of the Internet. However, others have argued that regulation is unnecessary and would threaten innovation.

At the heart of the issue is whether access to Internet services or content should be controlled and filtered rather than left free and provided according to the principle of 'best effort'.

This principle implies that no provider can prioritise traffic on the Net for economic reasons. Instead, every user should be served with the providers' 'best effort'. This criterion has seen derogations in order to allow more professional use of the Internet. Therefore, a business user willing to pay more gets a faster and better connection.

However, extending this concept to many more users would run the risk of the majority getting such a poor service that it will prevent them from using the Internet. The borders between the two needs are currently being defined, and are subject to technological and regulatory developments.

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