EU telecoms watchdog: ‘We are independent and we bother powerful people’

Sébastien Soriano said telecoms regulators have to "bother powerful people" and resist the "dark side" that wants fewer rules. [UWW ResNET/Flickr]

Sébastien Soriano spoke to EURACTIV about the draft overhaul of EU telecoms law, criticism that he is lobbying to change the rules, net neutrality and the likely new Digital Commissioner Mariya Gabriel.

Soriano is the 2017 chair of BEREC, the body representing European telecoms regulators, and the head of French regulator Arcep. This interview has been edited for length.

You spoke about the “dark side” of telecoms at an event yesterday. What is that?

I think we are at a key moment in Europe for what we want to do with regulation. There are people – the dark side – who are advocating that there will be too much regulation. And if we want to achieve new political objectives like connectivity, the gigabit society and 5G, they say the solution is less regulation. Especially the proposal on the table about the co-investment scheme that would prevent regulators from doing their job. This is the dark side. I was joking – you know this sentence from Master Yoda in The Empire Strikes Back. Is the dark side stronger? Yoda says, ‘no, it’s quicker, it’s easier, it’s more seductive, but it’s not stronger’. Because it’s true that in the very short term it could be a temptation to give power to big players because big players may have more money in their pockets. So you may hope that with giving some kind of carrot to these guys, they will invest more and fulfill the political objective. But what we have experienced in Europe the last 20 years is that this is absolutely not the solution. Facts are talking.

The Commission has pointed to France as a model for co-investment to boost competition.

There is some kind of paradox about this because co-investment is regulated in France. The point is not that we’re against co-investment. We believe co-investment can be a good thing in specific countries, in specific frameworks, but what we want is to keep co-investment within the regulatory framework. This is very concrete because it means that if you have a co-investment agreement that is regulated, if there are problems between the parties, the regulator can solve it. If you have problems of pricing, the regulator can solve it. If you have problems of discrimination in the co-investment scheme, you have a leading operator, then you give access to the network to other operators. This leading operator can take advantage of the situation to discriminate with information, to take advantage of this and have more market share in the end. The regulator is a good guarantee to police the system.

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There are amendments in the European Parliament and movement in the Council about regulating duopolies [two firms dominating a market]. Do you see that as an example of regulation that can create competition?

It’s a good debate. I think the Code has the ambition to be a really future-proof, forward-looking, long-term framework. This is why the Commission proposed to call it “the Code”. It’s a little bit like Moses with the tables of law. We see in many countries, in a large majority, good competitive markets. In several targeted situations, in several countries, especially in Belgium and the Netherlands, we see that the dynamic could be dangerous and could lead in the end to a duopoly. A duopoly is a nightmare, not only for consumers. It’s a nightmare for regulators and it’s a nightmare for investment. This is really what we have to avoid 100%. […]

We are totally open on this. We really don’t want to be ideological about how to fix this very targeted situation. In the end, if the Commission does something through the SMP [significant market power] guidelines or through a change in the Code on the definition of joint dominance, we could have sufficient certainty, if we with a reasonable burden of proof define joint dominance to fix this situation in Belgium and the Netherlands or other countries. We will not need the UMP [unilateral market power] anymore so we will be pragmatic. But we wanted to put something on the table. Several MEPs asked us, especially in the ITRE committee. They had the impression that something was missing in the Commission proposal about the oligopoly story. So that’s why we made this proposal about UMP. It’s not alchemy or anything. It’s a concept from competition law that we have proposed to put into the ex-ante framework exactly in the same way that we have taken the dominant position and the joint dominant position from competition law and transformed it into SMP. It’s exactly the same. It’s a serious position. It is effective. I am sure it will work. But we don’t want to be ideological about this solution over another. It could be a clarification of the SMP definition or alternatively of symmetric regulation, that could be another solution.

So is it fair to say you’re really the driving force behind this Parliament proposal on oligopolies?

We are an expert body and we want to be useful in the legislative debate. […] We gave our report [on the Code] to the Commission. Now it’s not the Council, it’s not the Commission, it’s the Parliament that is asking for our input. Of course, the Parliament is not speaking with one voice. It’s a little bit different. But we have so many requests from MEPs that we wanted to give this input. We actually published it. This was not to take any public or political position, it was just for transparency. We didn’t want to create the impression that we’re in the corridors of the Parliament giving papers to people. We are a technical body, people have been asking us for technical input. We did this, we’re transparent. In the end, it’s the political people who have to do the job.

The Commission also proposed other legal changes on the structure of BEREC. You’ve been criticised for acting as a lobbyist to oppose this and the telecoms “Code”. How would you describe your role?

Something really obvious about regulators is that we bother powerful people. This is something we experience every day in our countries and this is why we’re independent. […]

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What do you think is the danger of the Commission’s proposal to turn BEREC into a full-fledged EU agency?

The last attempt from the Commission to review the telecoms framework, the telecoms single market, was a catastrophe. Totally ideological. It was not serious. Today we have ambitious and serious people around the table that really want to fix what they analyse as the European problem, which is the fact that we’re not focused enough on connectivity in Europe. […]

We are not convinced at all that this extension of the mission of BEREC would lead to a change of the nature of BEREC. Because the proposal that has been put on the table would lead to less independence and put BEREC a little bit under the umbrella of the Commission. […]

The other risk was to lose what we call national rootedness. Today BEREC works like a cooperative between farmers. We all have our small farms and we decide to work together to solve big problems like how to face net neutrality with our net neutrality guidelines. How to collect very detailed information and data about roaming because you have to know how many people call from one country to another. […] In BEREC you have all the top heads of the national regulators and we are here to find solutions together. We are open to new competencies, we are open to cleanup, to refresh our institutional setup. Nobody’s perfect. But the idea that there is some kind of magic wand that will turn BEREC into an agency and all the problems will dissolve and we’ll have a perfectly harmonised European market? We’re grownups, so we need a pragmatic solution to fix the problem.

Looking at what is happening in the US with a possible repeal of net neutrality, do you already feel pressure from the telecoms industry to change the European rules?

We felt pressure in the past. Especially several big American players like Netflix have been strongly advocating in Europe to have an ambitious regime on net neutrality. I think the result is that we have this strong regime now. The question for Europe is whether we consider net neutrality something we did for Netflix or do we consider net neutrality a very important principle in the European framework. […]

Do we feel pressure? Personally, no. We were quite surprised by the 5G manifesto document published last year, where several people from the industry and telecoms operators said the ongoing BEREC guidelines were killing innovation, killing 5G. […] What happens in the US doesn’t have to be copy-pasted in Europe. We are in different situations, different markets. Broadband access costs more than $100 in the US. We are in a different context.

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Is there a regulatory issue you don’t think is getting enough attention?

When we have this discussion about 5G you sometimes have the impression 5G is the alpha and the omega of digital Europe. But let’s be honest, 5G may be an incremental innovation that is good and interesting. I think the real priority for Europe is: how do we make sure we have startups that can become unicorns and then internet giants? How do we make it possible for us to have companies like Google, Apple, Facebook, Tencent? I think this question is maybe not treated as a whole.

I have heard people so many times make an equal sign between the internet of things and 5G. In the internet of things sector, we see startups and almost unicorns. But we’re not talking about this, we’re talking about 5G. This is weird to some extent. It reflects the European model of focusing on the button you can push. You can push the button ‘review of the telecoms framework’ but the fact that you can push the button doesn’t mean that the button lights anything in the room.

The tech scene will be very sensitive about Mariya Gabriel. Especially the fact that she comes from a new generation can be a good sign. When I was appointed chair of ARCEP two-and-a-half years ago, several people really challenged me because they thought I was too young at the time. I was 39. Now the president of France is 39. The minister of digital affairs is 34 and the new EU Commissioner for digital affairs is 37. This is a very positive, big change. When it comes to digital issues, I don’t want to be anti-older people, but there is a question of mindset.

So what did you think of [former EU digital Commissioner] Oettinger?

I don’t want to be tough on Oettinger. What I liked very much about Oettinger was that he for the first time opened the discussion not only on the consumer perspective but also on the offer side, the competitiveness. This was tremendously important. At the same time, maybe he was very focused on big companies. There is room for Mariya Gabriel to open up to startups.

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