Communications: A Connected European Continent

Further to its call for a single EU market at the 2013 European Spring Council, the Commission has now unveiled its reform package. The aim of the legislative change is stated to be ‘EU-wide and roaming-free mobile plans; simpler rules to help companies invest more and expand across borders; first-ever EU-wide protection of net neutrality; and abolishing premiums for international phone calls within Europe[1]’.

The underlying wider aims of this much awaited legislative change are the creation of a more dynamic and innovative telecoms market with significantly fewer barriers to entry. Quite simply it is hoped that it will lead to the strengthening of the telecoms market across Europe, making it a more attractive destination for investment and therefore fuelling growth. These are proposals that will change the telecoms sector. And more importantly this could all happen within the next 12 months.
Vice President Kroes has herself emphasised the urgency of bringing the new measures into force. Practical impacts of the Regulations are intended to begin as soon as possible, with roaming charge changes (see below) in full force by 2016, and the first deadline for banning charges on incoming calls in July 2014. However, before this, the proposed legislation must now make it through European Parliament and the Council, before taking direct effect in EU Member States. With the current Commission’s mandate due to expire in May 2014, this could prove to be a tight timetable.
The proposed legislation towards a ‘Connected Continent’ comes in three parts: a Commission Communication on the telecommunications single market, the proposed 73 page Regulation, and a Commission Recommendation on consistent non-discrimination obligations and costing methodologies.
The key aspects to the package include:

  • Single EU authorisation across all 28 Member States, meaning an operator would be rid of the burden of having to be authorised in each member state that they want to provide services in. There will be exemptions for new entrants, thereby lowering barriers to entry, and increasing competition. However, the Regulation has not gone as far as to provide for a single EU regulator across Member States.
  • Roaming charges on incoming calls would be banned from 1 July 2014. Telecoms providers would either have to provide phone plans that apply across the EU, or allow their customers to choose a cheaper roaming provider. This is the first step in an attempt to ban mobile roaming charges entirely by July 2016, in return for decreased regulation. In addition, due to continuing ‘very significant price differences'[2], there would be no premiums on fixed line calls to other EU member states, which could not have higher tariffs than a long-distance domestic call, and charges on mobile calls would be capped at the euro-tariffs for regulated voice services, in a bid for consumers to ‘roam like at home’.
  • New harmonised customer rights. The Press Release on 11th September focussed on the right to plain language contracts, as well as making it easier to walk away from, or switch contracts, and to opt for 12-month contracts for greater flexibility. Not only this, but under the net neutrality proposals, Internet content blocking and throttling would be banned. Providers may still offer specialised services, but not at the cost of the Internet speed a customer is paying for. If consumers are not receiving the Internet speeds they pay for, they could end their contracts.
  • Coordinated spectrum assignment will mean the end of ‘spectrum spaghetti – a tangled mess of rules and prices and timetables'[3], and that European 4G and Wi-Fi access will improve, in line with the services in the US and in China. For mobile operators, greater predictability will make it easier for long-term cross-border investment.
  • Certainty for investors is the aim of The Recommendation on Costing Methodologies and Non-Discrimination, which goes hand-in-hand with the Regulation proposal. Focus is put on certainty, the harmonisation of costs, and ensures equal access to networks for ‘access-seekers’.

Reaction to the announcement has been mixed; as with all changes there will always be critics. Ultimately in this time of recession and challenges, changes that drive strength, growth and competitiveness in the telecoms market can only be a good thing.  However there has to be a balance to ensure that the telecoms industry, which is already shouldering intense regulation in many areas, can still thrive. It is these very players who will drive innovation and competition; it is these players who will really change business.


First published on on 26 September 2013

[1] Press Release 11th September 2013 ‘Commission proposed major step forward for telecoms single market’

[2] Proposal for a Regulation 11th September 2013, p.24

[3] European Commission Memo 11th September 2013 ‘Commission adopts regulatory proposals for a Connected Continent’

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