Brussels plans sweeping rules to complete single EU telecoms market

Neelie Kroes July 2013_smaller.jpg

The European Commission is drafting ambitious plans to scrap mobile telephone roaming charges and to seize greater control over the radio frequency spectrum before the EU Parliament mandate ends next year, in a proposal that is likely to pitch Brussels against national interests and industry.

Digital Agenda Commissioner Neelie Kroes wants the new regulation to establish the rules for “the elimination of surcharges for international and roaming traffic not justified by underlying costs,” according to the latest draft, which is being finalised for publication in September.

Kroes recently called for an end to roaming charges before the European elections in May 2014, and said mobile network operators should no longer be able to block telecommunications services such as Skype.

>> Read: Commissioner calls for end to roaming charges in EU

Another key objective cited in the draft is “the achievement of a European wireless space, through a coordinated European framework for the assignment of harmonised spectrum for wireless broadband communications services”.

Passport to open services to all member states

The draft new regulation aims to create a single market giving telecoms providers “the right, the ability and the incentive to develop, extend and operate their networks and to provide services irrespective of where that undertaking is established or its customers are situated in the Union.”

A new pan-European “passport” would enable telecoms operators regulated in one member state to trade in any other within the EU.

The plans are likely to irritate telecoms operators in EU member states where former national monopolies continue to dominate the market.

“As consumers we are ready to see roaming charges go, but from the point of view of operators there could be problems,” said Claire Harris, a senior director with FTI Consulting in Brussels.

Harris explained that current investment into fourth generation (4G) telecommunications networks is already “eating into margins”.

“This roaming issue could see margin squeeze at a competitive moment in a competitive market and could pull the rug out from under the carpet of these proposals” Harris added, saying operators could strongly resist them.

Another concern, according to the telecommunications executive, is that new operators will be able to use the new "passport" system to undercut domestic operators, by offering the cheapest prices across the EU.

The draft regulation’s proposals on spectrum are also far reaching and are likely to prove controversial. National regulators considering an auction of spectrum would need to take into account “the interests of European electronic communications providers seeking to serve the Union market”.

A new procedure would ensure that certain spectrum frequencies could be auctioned across the EU in a coordinated manner, with the timing and duration of the contracts subject to approval by the Commission.

Communications panel could gain powers

Member states resisting such attempts at spectrum harmonisation would be subject to final decisions made by the EU Communications Committee, a body made up of national representatives from all member states.The committee already has an advisory role, but would see its powers beefed up under the proposals.

France, Germany and Britain are amongst member states which have traditionally opposed ceding control of spectrum auctions that bring billions into public coffers. Spectrum is often also classed by member states as a matter of national security, and therefore off-limits to the EU executive.

The controversial elements of the regulation will make Kroes's task of guiding it through co-decision procedure with the Parliament and the Council all the more difficult.

Speaking to the European Parliament on 30 May, Kroes said she wanted Europeans to be able to see what the EU is doing for them ahead of elections to be held on 22-25 May 2014. She said the EU could deliver a “full, final” legislative package to end roaming charges “around Easter 2014”.

But that may be a tall order for a European Commission whose mandate expires in the autumn of 2014.

“The timing issue is a real concern. There are already a lot of proposals – such as the Payments Services Directive – due to arrive next week, before the summer. There is always a risk that if you start after the summer that people will be in election mode already,” said FTI Consulting’s Harris.

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.

  • Sept. 2013: European Commission expected to table a new regulation laying down measures to complete the European single market for electronic communications to be published by Commission
  • 22-25 May 2014: European elections

European Union

Industry federations and trade unions

  • European Telecoms and Network Operators (ETNO): Website

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