Telecoms and the EU: New Proposals

On 13 November the EU Commission adopted proposals for a reform of the EU telecoms rules. With the reform, the Commission wants to enable citizens, wherever they live and wherever they travel in the EU, to benefit from better and cheaper communication services, whether they use mobile phones, fast broadband Internet connections or cable TV. To achieve this, the Commission proposes strengthening consumer rights; giving consumers more choice by reinforcing competition between telecoms operators; promoting investment into new communication infrastructures, in particular by freeing radio spectrum for wireless broadband services; and making communication networks more reliable and more secure, especially in case of viruses and other cyber-attacks. A new European Telecom Market Authority will support the Commission and national telecoms regulators in ensuring that market rules and consumer regulation are applied consistently, independently and without protectionism in all 27 EU Member States. To become law, the Commission proposals will now need to be approved by the European Parliament and the EU Council of Ministers.

 

‘From today onwards, a single market without borders for Europe‘s telecoms operators and consumers is no longer only a dream,’ said José Manuel Barroso, President of the European Commission. ‘Telecoms is a field where our single market can bring about very concrete results for every citizen in terms of more choice and lower prices, whether for mobile phones or for broadband internet connections. At the same time, a single market with 500 million consumers opens new opportunities for telecoms operators – if Europe helps to ensure effective competition and consistent rules of the game. This is why we act today. A more European regulatory approach is particularly justified in telecoms. After all airwaves know no borders. And the internet protocol has no nationality.’

 

Viviane Reding, the EU Telecoms Commissioner said: ‘Today’s telecoms reform proposals put Europe‘s citizens centre stage. In the past, Europe has made substantial progress by opening telecoms markets to new players and by progressively ensuring more competition. However, dominant telecoms operators, often still protected by government authorities, remain in control of critical market segments, especially of the broadband market. This restricts consumers’ freedom of choice. 10% of EU citizens still have no broadband access at all. This is why new consumer rights, a new dose of competition, an effective system of independent telecoms regulators, new investment into competitive infrastructures and more space for new wireless services are needed to put Europe’s digital economy on track.’

 

The ‘Telecoms Reform Package’, which was presented by the Commission to the European Parliament in Strasbourg on 13 November, will change the EU Telecoms Rules of 2002. It is expected to become law by the end of 2009 and includes the following main features:

 

• New consumer rights such as the right to switch telecoms operators within 1 day; the right to transparent and comparable price information; the possibility to call freephone numbers from abroad; and a more effective single European emergency number 112.


• More consumer choice through more competition, especially by giving national telecoms regulators the new remedy of functional separation for dominant telecom operators.


• More security in using communication networks, especially through new instruments to fight against spam, viruses and other cyber attacks.


• A ‘New Deal’ for radio spectrum – the lifeblood of all wireless communication services – to spur investment into new infrastructures and to ensure ‘broadband access for everyone’. In rural areas of the EU, only 72% of the population on average have broadband access. The Commission wants to overcome this ‘digital divide’ by better managing radio spectrum and by making spectrum available for wireless broadband services in regions where building a new fibre infrastructure is too costly. The switchover from analogue to digital TV will free a substantial amount of radio spectrum (the so-called ‘digital dividend’) that can be used for this purpose.


• Better regulation in telecoms by deregulating those markets where EU-driven market-opening has already led to competition (see IP/07/1678); this will allow the Commission and national regulators to focus on the main bottlenecks, such as the broadband market.


• More independent watchdogs to guarantee fair regulation in the interest of consumers. Too often, telecoms regulators are still close to the dominant operator that continues to be partly owned by the national government in many countries. The EU Telecoms Reform wants to strengthen the independence of national telecoms watchdogs from operators and governments alike.

 

To quickly and effectively implement the reform, the Commission proposes establishing a European Telecom Market Authority that will help ensure that important communication services (such as internet broadband access, data roaming, mobile phone usage on planes and ships and cross-border business services) are regulated more consistently across the 27 EU Member States. The European Telecom Market Authority will more effectively combine the functions of the current European Regulators Group (ERG) and of the current European Network and Information Security Agency (ENISA).

 

‘Through last summer’s EU Roaming Regulation, we treated one of the most visible symptoms resulting from the lack of a single European telecoms market for consumers,’ said Commissioner Reding (see IP/07/1445). ‘With today’s reform proposals, the Commission now goes to the heart of the problem: the fragmentation of Europe‘s telecoms market that is depriving European consumers of the benefits of cross-border competition in telecoms. This is what we need to change.’

 

Bob Stankey, Partner in the Advertising, Media and Technology team at international law firm Reed Smith Richards Butler, commented on the Commission’s Telecom Package and the need for reform: ‘The Commission is updating Europe’s communications regulation for a Web 2.0 world of converged communications platforms. The Commission is right to put a particular focus on better spectrum use. The current country-by-country patchwork of rules makes it expensive and technically difficult to make new wireless services widely available in the EU.’ He went on to comment on the dangers of over regulation of VoIP services: ‘On the other measures announced, we will have to see the details of the proposals – especially when consumers are required to be notified of data security breaches and when VoIP services must provide access to emergency services. There is a particular concern that the Commission will over-regulate VoIP services – VoIP features are being included in lots of things that cannot be confused with traditional telephone services and should not be regulated in the same way. The risk is that it will stifle innovation.’