We continue to be fascinated by the rise and fall (and continued rise and fall…) of the proposals for a Connected Continent. How will Neelie Kroes reconcile her pledge to fight with her “last breath” for these proposals with the recent less than positive views expressed by BEREC? Will the elections see a Connected Continent fall off the legislative priority radar?
Let’s start with BEREC. On 17 May 2014, the Body of European Regulators for Electronic Communications (“BEREC”) published its views on the European Parliament’s first reading position on the European Commission’s “Connected Continent” proposals..Whilst BEREC broadly welcomed the European Parliament’s approach and in particular Parliament’s recognition of the need to review the current legislative framework further, it raised a large number of concerns. BEREC commented on 7 key areas:
1. General Authorisation Regime
When the European Parliament “took over”, it replaced the complex authorisation regime for telecoms operators set out by the Commission with a more harmonised notification requirement. As BEREC believes the Commission’s authorisation regime would have led to serious regulatory uncertainty and costs, BEREC comes out in support for Parliament’s proposals. However even under this system, BEREC is concerned that a NRA’s role in the notification process could be undermined.
The Commission’s original proposals were founded on the belief that spectrum management across the EU was failing, and hence provided for a significant transfer of power to the Commission. Parliament supported the Commission’s proposals for notification procedures for national spectrum awards and synchronised spectrum licensing. In addition, Parliament proposed retroactively applicable minimum licence terms of 25 years for spectrum in harmonised bands and provisions to prevent member states’ ability to refuse a transfer or lease of spectrum, even when this would be detrimental to competition.
In its response, BEREC disagreed with the idea that there has been “a failure of spectrum management”. In particular, it took the view that the new tightly defined parameters and detailed criteria for awarding spectrum may stifle rather than encourage the innovation that has led to such progress in the spectrum world. Furthermore there is a risk that the proposals would cause delays rather than accelerate spectrum release without any guarantee that the end result would be more efficient spectrum usage. In response to Parliament’s proposal to introduce retrospective minimum licence terms and measures to facilitate spectrum trading, BEREC states that these risk “distorting competition…creates legal uncertainty, as well as introducing inefficiencies and sterilizing the use of the scarce resources”. Instead, BEREC recommends more targeted and simple measures in the short term and a comprehensive review of spectrum management.
3. Wholesale Access Products
The European Commission’s original proposal was for three separate “top-down” standardised wholesale access remedies and to defer their consideration to an overall review of the regulatory framework. Whilst BEREC supported Parliament’s rejection of the Commission’s proposals, it was unconvinced by the alternative. BEREC believes that instead it should be given a mandate to assess the technical and operational requirements for a business grade wholesale access product. If a clear level of demand is found through such an assessment, then BEREC could be mandated to develop specifications for such a product.
BEREC also thought that legal uncertainties would be introduced through the proposal that NRAs assess whether or not to impose a reference offer obligation within one month of the adoption of the Connected Continent regulation. Instead its solution was to recommend NRAs should provide this assessment in the context of market reviews of the provision of wholesale high-quality electronic communications services.
4. Net Neutrality
Parliament in general retained the Commission’s (much debated) approach towards net neutrality acknowledging the importance of separating specialised services from internet access services at the network layer. However, BEREC also stated that principles rather than detailed rules would better serve the desired outcome, combined with arming NRAs with the necessary power to ensure the principles are respected. The proposed rules, they say, have inconsistencies and are not precise – the sort of stuff that gives us lawyers cold sweats.
5. End Users
BEREC welcomed Parliament’s proposal that the consumer protection provisions would not be directly applicable – another change from that proposed by the Commission . BEREC believed this would ensure member states would have the flexibility to determine the measures necessary to protect consumers in their national markets. Proportionality will need to be assessed.
6. International Roaming
Ach, the roaming debate roams on. BEREC has made clear its support for Parliament’s amendments to the system for the abolition of retail roaming surcharges by 15 December 2015 (amending you will recall the Commission’s complex system). However, BEREC still has concerns that it states have not been addressed and which could lead to regulatory uncertainty (see note re those cold sweats). Just to name a few of the concerns:
- unconvinced that the retention of decoupling obligations would be required once retail surcharges are abolished.
- the 30 June 2015 deadline for the Commission to report on wholesale charges and other arrangements might not provide sufficient time for the impact of the changes resulting from the introduction of “roam like at home” pricing to be considered.
- attempts to harmonize mobile termination via a Roaming Regulation unclear.
In conclusion more work needs to be done. Legislators need to ensure all necessary components of a final roaming package are carefully put together and that introduction is synchronised.
7. Institutional aspects
Parliament’s proposals preserved the current balance of power among the actors involved in the European regulatory processes, of which BEREC expressed support – no surprise there considering BEREC’s role as an independent in the regulatory area fought between member states and the European Commission. BEREC particularly liked Parliament’s proposal to establish a minimum set of sectoral duties for NRAs as a means to improve the effectiveness of the NRAs’ regulatory action in their national markets.
What happens now?
As a new European Parliament is in the course of being elected, the Connected Continent proposals will lapse until a decision is made to resume the work at the beginning of the next parliamentary term. Traditionally it is the decision of the Conference of Presidents (the President of Parliament and the chairman of the political groups) to resume all unfinished legislative work; however this is unlikely to occur before we have all had our summers breaks in the sun i.e. September or October 2014. The final text of the Connected Continent proposals will then need to be negotiated with the European Council. Is end of 2014 still likely? Well, the Connected Continent proposals were stated to be a key priority for 2014 and the European Commission has restated that it hopes that the legislation will still be approved by the end of 2014.. We will keep watching this space for you.