According to Strand Consult, the entry of Facebook into the telecommunications services arena registered this week, as operator utilizing a “social” SIM card adaptable on Android and Htc terminals, offering voice, data and SMS services to a potential market of more than a billion subscribers, is something which could irreversibly transform the market we always knew of.
The mind inevitably goes to the lengthy Brussels discussions (in Italy stirred by traditional operators, starting from former incumbent Telecom Italia) on the urgency of having Over the tops contribute to network costs as well as subsidization of digital divide investments. The argument being that in a competitive scenario, Over the tops should pay their stake in the transport of signals, since piggy back of data transmission is well capable of congesting both the fixed and mobile networks and Universal Service Obligation (USO) costs and digital connectivity should be objectives borne by all operators alike.
Dum Romae consulitur, Saguntum expugnatur, one may say, now that the table has been irrevocably turned upside down by Facebook’s entry into the market. Contribution to USO costs will now be borne on the same grounds as other players, as percentage on the figures of annual turnovers. The debate on Over-the-tops contribution had been stirred by Ms. Reading’s new proposal for a Directive amending Directive 2002/22/EC on Universal service and users’ rights relating to electronic communications networks.
The proposed new Directive was conceived with a view of enlarging (rather than progressively limit, as competition would have it) the minimum set of requirements on operators, both entrants or players in the field (hence the evolution to include Over the tops, in the “convergent” scenario).
In general, EU Member States may choose not to require USO contributions from undertakings whose national turnover is less than a set limit. This is generally still applied in most EU Member States, but, moving from the assumption that the EU market is one, charges related to the sharing of the cost of USOs should be unbundled and identified separately for each undertaking, so to ensure transparency. Such charges should not to imposed or collected from undertakings that are not providing services in the territory of the EU Member State that has established the sharing mechanism. Any funding mechanism should ensure that market participants only contribute to the financing of USO and not to other activities which are not directly linked to the provision of the universal service obligations.
Now, the need is to re-assess EU strategy: further coherence will be a must between National Regulatory Authorities, particularly in applying methodologies of calculation on costs of services in order to ensure competitiveness and benefits of cross border competition for consumers. The debate is open, when the obligations of new entrant Facebook as operator will also become those of providing best-effort and managed services, information, transparency, awareness of service characteristics and easy switching.