European Commission’s plans to overhaul the telecoms rules across the bloc are most likely to encounter the hostility of a powerful, yet unsuspicious ‘lobby’: national regulators.
An opinion issued in mid-December by Berec, the Body of European Regulators for Electronic Communications, appears to anticipate a confrontation with Brussels.
The Commission has made a top priority to “break down national silos” in the sector’s regulation with the aim of building a genuine single market for telecoms.
Berec’s opinion is keen to stress that any such achievement “will always be the product of 28 competitive and well-regulated national markets”. While the executive president Jean-Claude Juncker recently proclaimed that he wants “to see pan-continental telecoms networks”, regulators respond that “physical networks are and will remain national.”
No need to be a telecom expert to guess that the two institutions may have diverging views. This is nothing new. Disagreements of this sort adumbrate a struggle of power that has been playing out for some time.
Telecom regulators stood firmly against several attempts by former digital commissioner Neelie Kroes to exert more control over their domestic decisions.
Now they fear that the upcoming reform might curtail their sway in national markets while increasing the Commission’s competences in what is meant to be a fresh shift of power.
Little wonder that Berec’s opinion appears to air scepticism at the idea championed by Brussels that the current rules governing the sector need a robust modernization as well as more harmonization.
By contrast, the organization is vocal in praising the existing legislation – although admitting improvements are required – precisely because it leaves regulators enough room for manoeuvre, namely the “ability to address the particularities of their national markets”.
Greater EU harmonisation should happen only where it makes sense, while preserving national differences, Berec argues. Thankfully, the Commission believes that a fair chunk of those differences are leading to overregulation or regulatory uncertainty that might hinder investment at a time Europe needs to accelerate the rollout of digital networks so as to compete with the rest of the world.
The mobile sector is a textbook case. Ensuring greater consistency in radio spectrum policies at EU level – a measure the Commission has announced to be part of the reform – will generate mobile network cost savings, as well as additional benefits associated with improved coverage, capacity and network performance, observers say unanimously.
And yet Berec does not appear to share this idea. To the contrary: It says that “top-down harmonization” might result “in inefficient use of” radio spectrum, “hampering rather than supporting innovation”.
The Commission is expected to unveil its proposal for the review of the EU’s regulatory framework for electronic communications as early as this spring.
These rules addressing the regulation of service provision, access, interconnection, users’ contractual rights and users’ privacy were last revised in 2007-2009. The reform constitutes one of the 16 strategic actions of the Digital Single Market strategy unveiled with great fanfare in May last year.
Berec’s opinions are not binding but must be taken in “utmost account” by the European Commission, according to the EU law, meaning they cannot be simply neglected, not least because telecoms regulators are often tasked with implementing the bloc’s rules.
It is worth noting that in the past years some regulators chose to ignore Brussels’ decisions or even the implementation of pieces of European legislation.
At the same time Berec voiced strong criticism at a bunch of key Commission’s proposals. For instance, it objected to a wide spectrum of measures put forward under the “Connected Continent” package, which was also designed to accelerate the building of a single telecom market.
That is why the European Commission should strengthen the dialogue with regulators before putting out the new legislation so as to minimize their influent opposition (in the past they lamented that they have been not consulted).
The fact is that further integration in the sector’s regulation is key for the future prosperity of the bloc and is a stepping stone towards a digital single market. Berec ought to come to terms with this basic truth even this means a loss of powers for the national regulators.
Photo credit: Jesse Loughborough
On paper (almost) everyone in Europe is lining up to praise the benefits of building a digital single market, including national governments. However, of late, member states have shown little appetite for “europeanising” their digital policies.
“One response to the digital revolution must be the Europeanisation of digital policy,” EU digital commissioner Gunther Oettinger proclaimed on Monday 16 March at the CeBIT fair in Hannover. His statement comes not as a surprise. Ever since its early days the European Commission has expressed the intention of going after national silos in the digital market.
We have also known for some time that such ambitions are being packed into a grand strategy due to be unveiled in May which will comprise a set of reforms in as many areas as copyright, telecommunications, audio-visual services, e-commerce, and so forth.
On paper (almost) everyone in Europe is lining up to applaud the move, including national governments. Only two weeks ago, a Council meeting of EU Competitiveness Ministers gave its blessing calling various actions aimed at removing unnecessary barriers in order to enable a smooth and quick transition to the digital age.
Building a European digital market is also one of the 10 key actions outlined in the German government’s digital plan for 2014-2017 that was presented by Angela Markel in person at the opening of CeBIT.
Yet behind these rosy appearances the reality may be way more challenging for Mr. Oettinger and his fellow commissioners. In fact, of late, member states have shown little appetite for “europeanising” their digital policies. The perfect illustration of this ill-concealed reluctance is the recent agreement reached by the Council on the so-called “Connected Continent” package.
Originally, the proposed regulation provided for less red tape for operators (for instance by creating a single authorisation to provide services across the EU), more coordination of spectrum use, a higher level of standardization for fixed access products as well as for consumer rules.
None of these proposals has survived the compromise text endorsed by member states, who removed from the package everything but its provisions on net neutrality and roaming charges.
At the end of the day, the irony is that the amended text of a proposal named “Telecom Single Market” would do nothing to sort out Europe’s fragmented telecoms market and regulatory imbalances.
And this is not an isolated case. From the data protection reform to the EU cyber security directive (most) national governments have so far appeared more prone to water down than to embrace the Commission’s drive for more common rules (and, conversely, less national powers) in many key areas of the digital sphere.
This is a worrying signal taking into consideration that the balance of EU power is tilting back towards governments at the expense of Brussels’ supranational institutions (European Commission and the European Parliament).
Things may perhaps change. No doubt the European Commission will try its best to build consensus using all its diplomatic leverage to push through digital reforms.
But given the precedents, as the forthcoming plan on the digital single market will entail several legislations that will touch upon sensitive national interests, not to mention the pressure coming from corporate lobbies, the fundamental question that should be asked is: Are our governments enough serious about building a truly digital single market? Or will they persist in striking “watered-down” and unambitious compromises that would clearly harm Europe’s chances to link its future prosperity to the digital economy?
photo credits: Mark Fosh
Despite all the great promises, roaming fees are here to stay for some more time. They are not disappearing until 2018 or even later according to an amended proposal likely to get the backing of European governments as early as the end of February.
The compromise text put forward by the Latvian Presidency of the EU offers some sweeteners by providing for domestic rates to apply (as of June 2016) only to a very limited amount of traffic generated from abroad. That means travellers will resume paying surcharges after a few calls and some fiddling with their favourite app.
Extra fees will even keep applying to incoming calls.
One doesn’t have to be familiar with the technicalities of telecoms regulation to realize that we are nowhere near the “complete end of roaming charges” boasted by the proponent of the legislation and former EU commissioner for Digital agenda Neelie Kroes.
True, the European Parliament last April voted to ban roaming charges from 15 December 2015. Under the EU decision-making system MEPs will have to agree on a common text with Member states, thus raising the chances of a more consumer-friendly compromise.
However, given the differences between the two institutions, it is not clear to what extent a deal could restore Mrs Kroes’ pledges, or even if it could be struck at all.
Political wrangling apart, ending roaming charges gives also rise to a number of complex technical and legal issues. No wonder if national regulators, namely the very bodies in charge of putting the new rules into practice, have cautioned that the job “is not feasible”.
To be sure, they can’t be accused of siding with mobile operators (which have been lobbying hard against the proposal). Instead, they have simply highlighted an inconvenient truth most politicians in Brussels pretend to ignore: that the legislation is so ill conceived that it would do more harm than good.
In fact, it may lead to an increase in domestic prices, squeeze smaller (and often more competitive) operators and in the long term impair network investments. Competition will suffer as a result.
So the paradox here is that a legislation designed to benefit consumers will wound up harming them. This is not a surprise.
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To her credit, Mrs Kroes tried her best to address this fragmentation only to see the bulk of her “Connected Continent” package being torn apart by Member states and (to a lesser extent) MEPs.
Alas, many more national barriers should be brought down before an end to roaming charges becomes fully sustainable for the industry and truly beneficial to European citizens.
It is indeed wrong to assume, as many do, that a roaming-free continent would accelerate the transition to a telecoms single market. It is precisely the other way round.
photo credits: Michael Summers
EU governments look pretty keen to scrap plans for more coordination in spectrum licensing across the continent. However, the move may jeopardize future efforts to improve Europe’s mobile networks, with negative impacts on consumers and businesses alike.
It is unclear whether EU member states are going to broker a deal on the Telecoms Single Market package anytime soon. Differences abound on the details of Net Neutrality provisions and plans to end roaming fees featured in the proposed bill.
However, what’s more certain at this stage is that most governments are keen to get away with the package proposals pushing for more coordination in spectrum licensing for wireless broadband.
If confirmed, the move would strike a fatal blow to the very spirit of the legislation.
For in a world increasingly dominated by mobile communications there will be no digital single market without a higher degree of harmonization in spectrum policies.
The expected gains will be paramount to speed up the roll out of 4G networks, bringing huge benefits to consumers and businesses alike. The same goes for the introduction of more flexibility and market-led mechanisms in spectrum usage provided for by the legislative package.
Speaking at a recent GSMA event, the EU new digital single market chief Andrus Ansip urged governments to make up their minds rightfully pointing out that more cooperation on spectrum assignment “is not a technical issue” but would translate into cheaper and higher quality connectivity, as well as new services.
MEPs should also step up their pressure by threatening to block any incoming inter-institutional negotiations on the TSM proposal if member states water down or drop its provisions on spectrum usage. It would be a logical step since the European Parliament in April passed an amended draft of the bill that reinforces its original plans on spectrum harmonization.
The truth here is that auctions for frequencies have long provided an easy source of revenue for governments. This explains their reluctance, also welcome by national regulators, to relinquish powers to a more centralized mechanism of the sort contemplated by TSM package. A single market for wireless communications would be however a far more lucrative bargain for everyone in the long run.
Although the European Commission has pledged to work out new legislation on ‘radiospectrum management’, it would be foolish to give up on the rules put forward by former EU digital chief Neelie Kroes under the scope of the TSM package. In fact any future bill should build up upon them, impulsing greater harmonization and – why not? – even daring to break the great taboo of pan-European auctions.
At this stage a fresh legislative initiative would take a while to be drafted and presented, not to mention adopted. Do not expect anything like that before 2016. Meanwhile, the gap between Europe and other regions (such as the US) in LTE deployments, network speeds, total mobile usage or the rollout of advanced services may get bigger to the detriment of the continent’s economy.
To be sure, a lot is at stake here. Up to the new Commission and the European Parliament to convey this message to their national counterparts.