On 11 September 2013 the European Commission announced its proposals for the most far reaching reform of the European Union’s telecoms market in 26 years. The Commission describes this legislative package as an intermediate step towards the ultimate goal of creating a genuine fully integrated single market in telecommunications across the EU. Whilst the Commission remains of the view that a genuine single market in line with this vision will require a single EU regulator responsible for interpreting and implementing a harmonised legal framework, the package does not propose a single telecoms regulator in the EU at this stage.
The package proposes a range of reforms to be rolled out over the next 3 years, subject to approval by the European Parliament. Key elements include:
- Changes to mobile phone call and text charges which would abolish, for most intra-EU movements, incoming call charges from July 2014 and roaming premiums by July 2016
- A more coherent framework for 4G spectrum assignments to facilitate cross-border investment by operators
- A single authorisation “one-stop shop” regime for telecoms operators across the EU
- An increase in the legal threshold for telecoms sub-markets regulation, with the aim of reducing the number of sub-markets
- A degree of legal protection for net neutrality
- New consumer rights with regards to contracts with telecoms providers
In its announcement the Commission characterises the current state of the EU telecoms sector as a whole as suffering from fragmentation along national borders; a lack of regulatory consistency and predictability across the EU; unfairly high prices for specific services; and a lack of investment. It points out that at present the telecoms market includes over one thousand fixed operators and several hundred mobile operators which, despite close co-operation, still primarily operate on a national basis.
The Commission’s aspiration is a telecoms market where consumers can obtain services from any EU operator, without discrimination, regardless of where they are based, and where operators can competitively offer services to consumers based anywhere in the EU. In such a market excessive charges for intra-EU calls, or when using a mobile elsewhere in the EU, would be a thing of the past. The Commission cites a study concluding that a single market for electronic communications such as this could add an extra 110 billion euros to the EU’s GDP each year.
One aspect of the draft Regulation proposed by the Commission that has received close attention is the issue of net neutrality. Article 23 (2) allows users, content providers and providers of electronic communications to the public to offer “specialised services with a defined quality of service or a dedicated capacity”. The phrase “net neutrality”, present in earlier versions, has been removed from the final published draft. Specialized services with defined QoS are not prohibited under the current EU framework. The new proposal would affirm their legality, however, as well as go into detail regarding what constitutes “reasonable network management.”
This provision has raised fears that the draft Regulation may encourage the growth of a “two tier internet”, with only those users able to pay higher charges being given access to higher speed data connectivity. We note that the draft Regulation contains other provisions, such as obligations on national regulators to safeguard quality of service and access for users, which may allay these concerns as the draft Regulation is debated within the European legislature.