Pilar del Castillo, the Spanish centre-right MEP leading negotiations on the EU’s new telecoms bill, defends in an interview the European Parliament’s agreement on telecoms competition.
On Monday (2 October), the Parliament’s Industry (ITRE) Committee approved the electronic communications ‘Code’, a new piece of telecoms legislation that will change rules affecting how companies compete in the sector, whether they invest in building new networks and conditions for government auctions of radio spectrum.
The agreement strips away parts of the European Commission’s proposal to ease regulation on firms that promise to spend money on building fast internet networks.
Del Castillo also explained why a law creating a price cap on international calls within the EU is different from the political battle that ended mobile roaming fees.
She spoke to EURACTIV’s Catherine Stupp.
After the ITRE Committee approved the telecoms Code on Monday, you said the new legislation will help Europe digitise and improve telecoms infrastructure. How?
We all have a need for good connectivity wherever we are. We need higher speed and better quality. We’re moving from personal experience to sectoral demands. We can see that with smart cars, smart cities, energy, industry, research, etc. There is a need for very high capacity both for fixed and mobile networks.
And then that requires the regulatory treatment to ensure predictability. The investment needs are enormous. The European Commission calculated that the range goes between €500 billion and €600 billion and a minimum of 90% needs to come from private sources. So you need to always take long-term investments in very high capacity networks. It’s all necessary to support the development of 5G communication.
Other political groups – the Socialists, Liberals and Greens – won support for their proposal on so-called co-investment for telecoms infrastructure. It removes incentives from the Commission’s push to get companies to spend more money on infrastructure if they are promised less regulation. Does the co-investment model in the Parliament’s draft still support the Commission’s goals of promoting investment?
The Commission set out the importance of finding tools precisely to incentivise long-term investments. The Commission introduced this co-investment model with a number of rewards in terms of non-regulation, rules to be applied by NRAs [national regulators] when certain conditions for the investment are present.
I think it’s important that we have the co-investment model in our position in Parliament that we approved Monday. In some first proposals the co-investment model was not there. In my draft as a rapporteur, it was from the very beginning. But finally all political groups approved the co-investment model as a tool to incentivise investment for very high capacity networks.
There is a different approach in some aspects, like if there should be something the NRA can do or not, or thinking in the digital single market perspective. I thought it’s better to have this, which was a clear message.
Are you confident it can really increase investment by a significant amount?
I think it can really boost investment. It is a tool that can be used clearly to start with, and it can open the door for this model to really boost investment. It’s a crucial thing. Some political groups didn’t want it there from the beginning, and it’s there. All in all, what we approved is a very consistent dossier on spectrum, access, the part of consumer protection we have. It’s a good outcome.
Competition, consumer protection, the digital single market were always the core of the old telecoms regulation. Now this update adding the infrastructure and connectivity to that main core was really important. And it is in the Parliament’s decision as well. The co-investment model is an excellent example of that.
MEPs also added a new part to the Commission’s proposal that gives regulators the power to control telecoms companies that hold ‘joint dominance’ in a market. Does the Code give regulators more power than they have now?
Some political groups wanted unilateral market power. Joint dominance is classical for competition law, it refers to significant market power [SMP], which regulates former monopolies. There is a possibility that we could have oligopolies, with two operators having SMP, and another one develops the co-investment model and they can control access.
But we proposed a number of things that really will try to avoid damaging competition. At the beginning more people were inclined to introduce different concepts like unilateral market power, which is a concept not really linked to competition law that has not really been checked out. And finally it was joint dominance that stayed.
For co-investment, there could be risks, hypothetically. We introduced some limits. In that sense, there was quite a consistent and really solid vision of competition, together with connectivity. The novelty of this dossier in some way was mostly the aspect linked to infrastructure and the kind of connectivity we need.
There was the need for going a step forward in the direction of incentivising the deployment of very high capacity networks. We have 5G development around the corner. We must be prepared in Europe to fully seize these opportunities, for the European economy to be more competitive on the global level, and for society to have much better benefits.
The idea was not to keep the status quo as it was, but to really go one step forward in this consideration of connectivity and infrastructure as the real main point.
Does the legislation change a lot how national regulators will be able to control companies?
No, I don’t think so. Not a huge amount. It’s more harmonisation than a huge amount of new powers for NRAs. You see in the spectrum part, there is more harmonisation of the powers of NRAs.
There is also a bigger focus on the single market compared to the previous framework. The digital single market is really there, it harmonises, it coordinates. We will see what happens when we negotiate with Council.
Often the Council sees national powers as powers that don’t necessarily need to be transferred on to the European level. Spectrum is a typical example of that. This dossier harmonises more. That’s clear.
MEPs are fighting to regulate the price of calls between EU member states. So far, the Commission has said there is no need to regulate those call rates. Is there a chance this measure to create a price cap can pass in negotiations?
I don’t know. All I can say is it was approved by ITRE, it was approved previously by IMCO. When the Commission proposed regulating intra-EU calls in the TSM in 2013 [editor’s note: the telecoms single market legislation, ‘TSM’, was passed in 2015 and includes net neutrality and rules to get rid of mobile roaming charges], it was related to the roaming caps. At that time I was the rapporteur of the TSM and since we wanted to focus on roaming, we had to focus on the end of roaming. Then this proposal for the Commission to consider intra-EU calls was a bit impossible to take into account.
Now we have the appeal from Parliament. Let’s take into account that it’s for voice, we’re not talking about data, which was really the main thing when we were talking about roaming.
It’s very different. We’re not talking about not having any charge for intra-EU calls. When we were talking about roaming, the charges were for use that would be presented. But what we said was companies could not charge higher fees to users when calling from mobile or landlines to another EU member state than they do when calling in their member state.
We are talking about something very different from roaming in terms of the impact. It’s for calls, it’s a market that’s being more and more reduced. This is the position of the Parliament, of the ITRE committee, we all support it. IMCO as well.
Could regulating the price of international calls be less of a big political fight than roaming if it’s so different?
Probably. We’ll see. Roaming really had an economic impact and here we are talking about voice.
You have a lot of experience negotiating telecoms legislation in the Parliament. Compared to the telecoms single market legislation, is the political battle over this telecoms code as tense and difficult?
This is technically speaking much more complex. The TSM was much very complex in the initial proposal from the Commission. But the problem is, when we voted on the TSM in July 2014, we had a short time because the Commission sent it in September. And then we were moving into the pre-election time for the 2014 European elections.
In the end, we had two issues after the elections. The Council didn’t want to go ahead at all with the spectrum part. And then there were the two parts of roaming and net neutrality in the TSM.
In this case, it’s the review of the regulatory framework on electronic communications in Europe. The last one was approved in 2009. This is a recast of four directives at the same time. In terms of technical work, this was more complex.
We now see some similar political fights on spectrum as in the TSM again, though. The Parliament wants there to be a review of licenses given to telecoms companies after ten years. Does the Parliament’s compromise leave too much space for the proposal on spectrum reform to be watered down in negotiations with the Council?
The Parliament’s compromise on spectrum is really good. The Parliament had a very consistent position on spectrum for a long time, for the last 10 years.
There are a lot of overlaps with the Commission’s, we take the same line in terms of promoting higher coordination, giving more guarantees in terms of simplifying regulatory intervention, ensuring consistency and availability in spectrum assignment, and license duration in terms of timing.
Even in this case, my position as a rapporteur was to support the Commission proposal. But we introduced steps that go further. We tried to reinforce the coordination of spectrum at the European level.
The Parliament and Council’s positions will be far apart once you start negotiating with each other in trialogue discussions.
I expect that we can really deliver good quality and not in too long of a time. It’s a directive. They take time to be implemented. In areas such as the digital field, these time consuming decisions, implementations, determine how useful some aspects can be when they are in place in a few years.
I hope we can deliver something valuable in terms of what’s needed, in terms of the communications sector, the connectivity aspect and others. Trialogues will start under the Estonian presidency. Estonia pays a lot of attention to digital issues and I think they are really interested in going as far as we can. I doubt we can end under the Estonian presidency, realistically.