‘Connected continent’ plan seeks harmonised EU telecoms market

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Reduced mobile phone roaming charges was the popular leading act in the European Commission's proposal to harmonise the telecoms sector, which also included controversial attempts to level EU access to the internet and radio spectra.

The proposals, released yesterday (11 September), are intended to kick-start the underperforming European telecoms sector, in comparison to its US and Asian rivals, and incentivise investment in ultra-fast broadband networks.

While the telecoms market has largely opened up to competition over the years, offering lower prices and better services to customers, the sector still operates largely on the basis of 28 national markets, the Commission said.

In particular, "there is no telecoms company that operates across the whole EU, and both operators and customers face differing prices and rules," the EU executive said in a statement.

The Commission's roaming proposals will see charges for receiving calls cross-border within the bloc eliminated, while a cap of €0.19 per minute for those making calls cross-border within the EU.

Neelie Kroes, the EU's digital agenda commissioner, said the legislative package was "great news for the future of mobile and internet in Europe."

"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,” Kroes said.

Losses arising from cheaper calls will be offset by more calls

The Commission has acknowledged complaints by the larger operators that this could lead to lower profits, but it is confident that any losses will be compensated by the greater number of calls consumers will make as a result of the price slash.

The proposals would create a single regulatory passport enabling operators to offer services across the whole bloc, rather than seeking individual regulatory permits from the 28 national authorities. The plans stop short of creating a pan-European regulator for the sector however, though they suggest the idea should be explored fro the future.

Proposals to level the playing field for internet users by giving consumers equal access to internet services – so-called net neutrality – are tempered however.

Although ”blocking and throttling of internet content” is banned under the plans, companies will still be able to offer privileged add-on services to consumers so long as these do not impede the speeds and quality of basic services.

This will antagonise NGOs campaigning for pure net neutrality, but will satisfy industry claims that imposing a strict level playing field would cut off potential revenue from "apps", stifling innovation.

Spectrum coordination gives Commission whip hand

Meanwhile the EU executive will seek 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.

That move will be resisted by larger member states which benefit from spectrum auctions and consider the sector "off-limits".

Kroes now needs all 28 EU governments and the European Parliament to agree to the proposals, a process which can often takes two or three years.

Resistance will come from governments on spectra and NGOs on net neutrality, but the incumbent mobile telephone operators are also critical of some of the elements.

Telecoms group Etno – whose members include Deutsche Telekom, Telecom Italia, Orange and Telefónica – claimed the plan would not create the momentum required to achieve the EU's targets.

"The European Commission is right to seek to safeguard net neutrality and the open Internet for the 21st century. It is a win-win for consumers, Internet companies and telecoms firms, as research shows that high bandwidth services such as video calling drive upgrades to faster broadband connections. The final legislation should allow specialised services, but ensure they do not degrade the public Internet and see that this is effectively monitored by regulators," said James Waterworth, the vice-president of the Computer and Communications Industry Association (CCIA)n an international, nonprofit association representing a broad cross section of computer, communications and Internet industry firms.

“The EC has made it clear that telecommunications operators can no longer block lawful content. Consumers have the right to access and distribute information and content, run applications and use the services of their choice from the Internet Access Provider. These rules aim to assure fairness for both consumers trying to reach sites online, and those offering Internet services by prohibiting interference from companies providing their connection. The reforms would boost rights for consumers’ access to information, and existing companies and future innovators alike will be fully available to all customers online,” Waterworth concluded.

“The Commission has rightly identified that increased investment in Europe’s telecoms infrastructure is needed to drive progress across all sectors of the economy but, on balance, the package needs to do much more to support this goal,” said Anne Bouverot, director general of GSMA, a lobby group representing the interests of global mobile operators. “A more thorough and comprehensive approach is required and the mobile industry stands ready to contribute to efforts to develop an ambitious shared agenda to underpin Europe’s digital economy.”

“Reform today will set the context for investment and innovation in Europe’s digital economy for the next ten years,” continued Bouverot. “It is essential that we get it right and this process should include a comprehensive review of the increasingly outdated regulatory framework for telecoms in Europe. The right policies are ones that encourage investment, enable innovation and help build consumer confidence. We will continue to support efforts to develop these to help drive Europe towards a connected future that meets the expectations of its businesses and consumers.”

In June 2007, the European Commission introduced a regulation placing caps on prices of cross-border mobile calls in Europe, the so-called 'roaming regulation'.

The EU executive's intervention was limited to roaming because domestic calls remain a competence of national regulators. The first roaming regulation also excluded text messaging and data. A second regulation entered into force in 2009, introducing further steps to gradually lower caps for voice roaming, together with guarantees against "bill shocks" for data roaming.

In July 2011 the Commission proposed a third roaming regulation and announced plans to structurally reform the European market for roaming phone calls slashing wholesale prices and opening access to the market to new service providers.

The measures were supposed to eliminate differences for cross-border phone calls, saying that price caps will be no longer necessary as from 2016.

  • 2013-2014: EU Parliament and member states to negotiate terms of the Commission's proposal

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