As part of the Commission's Digital Single Market Proposals (see Bird & Bird press release) the Commission is aiming for a review of all existing EU telecoms regulation.
It will present proposals in 2016 for an ambitious overhaul of the EU telecoms regulatory framework focusing on
- a consistent single market approach to spectrum policy and management
- delivering the conditions for a true single market by tackling regulatory fragmentation to allow economies of scale for efficient network operators and service providers and effective protection of consumers,
- ensuring a level playing field for market players and consistent application of the rules,
- incentivising investment in high speed broadband networks (including a review of the Universal Service Directive) and
- a more effective regulatory institutional framework.
The focus areas are described in more detail below:
- Telecoms Single Market package - Adoption of the package with clear and harmonized rules for net neutrality and the final elimination of roaming surcharges. Countries with strict net neutrality regulation prohibiting zero rating such as Slovenia and the Netherlands will have to adopt their national laws if the common position of the council of ministers is adopted in the trilogue with the Commission and Parliament. Roaming charges may be set to domestic prices on the basis of a fair use policy.
- Spectrum policy - Radio spectrum is seen as a vital building block for the deployment of broadband services. The absence of consistent EU-wide objectives and criteria for spectrum assignment at national level creates barriers to entry, hinders competition and reduces predictability for investors. The Commission wants radio spectrum to be managed by Member States under a more harmonised framework that is consistent with the need for a Digital Single Market. The Commission will make specific proposals regarding the coordinated release of the 700 MHz band for broadband services in rural areas, while accommodating the specific needs of audiovisual media distribution. According to the Commission the slow and still incomplete release of the 800 MHz band (the original "digital dividend" spectrum band) for wireless broadband has impeded the roll-out of 4G mobile networks and the uptake of smartphones adapted for this band. It is anticipated that the Commission will revamp the spectrum policy proposals of the Connected Continent Package launched in September 2013, but later abandoned, including EU-wide Coordination of Spectrum Assignment.
- Fixed networks competition - Apart from Belgium, the Netherlands and Denmark little full infrastructure competition has emerged in fixed-line networks, except in very densely populated areas, where cable networks were already present, or where local authorities have been active. There is a need for simpler and more proportionate regulation in those areas where infrastructure competition has emerged at regional or national scale. The deployment of very high capacity networks needs to be encouraged while maintaining effective competition and adequate returns relative to risks. Simpler and more proportionate regulation might entail symmetric access obligations in terms of interoperability for any provider that controls access to end users. Ex ante regulation and significant market power may be seen as a basis for levying additional obligations by NRAs by means of remedies.
- Rural areas and public interest - The question of how to cover the most inaccessible areas and to realise public-interest objectives (like high-capacity connectivity for schools and universities/research hubs) will be considered, also as part of the review of the Universal Service Directive. Enhanced roll-out of 4G networks is expected the close the digital gap in rural areas.
- Level playing field - Telecoms operators compete with services which are increasingly used by end-users as substitutes for traditional electronic communications services such as voice telephony, but which are not subject to the same regulatory regime. The review of the telecoms rules will look at ways of ensuring a level playing field for players to the extent that they provide competing services and also of meeting the long term connectivity needs of the EU. Ensuring a level playing field could entail creating a common regulatory framework for traditional electronic communications services and substitutes like VoIP, OTT video services and providers offering services on the basis of network function virtualization (NFV). In the near future physical and virtual networks could be seen as substitutes as well.
- Investment - European telecoms markets suffer from under-investment. The European Structural and Investment Funds are expected to programme around EUR 21.4 billion. Particular efforts are needed to close the digital gap between urban and rural areas. Complementing current EU programmes, the European Fund for Strategic Investment is designed to support a wide range of digital projects. These initiatives are seen as the main catalyst for expanding network coverage throughout Europe in cooperation with the private sector. The Commission will present a new Trade and Investment Strategy in the autumn 2015 which will address key issues for the digital trade agenda.
- Institutional framework - The changing market and technological environment calls for strengthening the institutional framework. According to the Commission enhancing the role of bodies in which the Member States' authorities are themselves represented - such as the Body of European Regulators for Electronic Communications or the Radio Spectrum Policy Group will also be required. Enhancing the roles of NRAs may be seen as a new step towards the establishment of a true European regulatory body. In 2002 and 2009 the Commission's proposals for a European telecoms supervisory body were rejected.
The Commission's plans are being criticized for lacking substance. The telecom industry calls for more detail since it remains unclear how the Commission wants to achieve its objectives. The Industry wants clearer, investment-focused signals. The Commission should allow more cross-border and in-market consolidation.
The European Council is set to debate the DSM proposals on 25-26 June. Detailed proposals cannot be expected before 2016. Bird & Bird will provide more updates and commentary on these topics as the proposals emerge.