Extensive reforms in the telecoms sector

Consumers and operators are a step closer towards embracing radical reforms in the telecoms sector. The recent approval by the European Parliament of the significant reforms being proposed by the European Commission registers a huge step forward towards the implementation of enhanced competition and consumer rights in the European telecoms market.

A substantial part of the reforms being proposed relate to the enhancement of consumer rights. The new rules will endow consumers with the right to change, in one working day, a fixed or mobile operator while keeping their old phone number. They also stipulate that the maximum initial duration of a contract signed by a consumer with an operator must be no longer than 24 months. Operators must, however, also offer consumers the possibility of agreeing to a 12-month contract.

The new telecoms rules ensure that consumers receive the necessary information from service providers so as to be in a position to make informed choices. Consumers must be able to understand what services they subscribe to and, in particular, what they can or cannot do with such services.

Consumer contracts must specify, among other things, information on the minimum service quality levels including traffic management techniques and their impact on service quality, as well as any other limitations such as bandwidth caps or available connection speed. The consumer must be fully informed about any compensation and refunds available if such quality levels are not met. The subscriber must also be informed about his option to be listed or otherwise in telephone directories and about the qualifying criteria for promotional offers.

In terms of the new rules, telecom operators will also have to take the necessary steps to ensure that their customers' personal information such as names, e-mail addresses and bank account information as well as data about every phone call and internet session is safeguarded at all times. In particular, the new rules provide for an innovative obligation on the part of telecoms service providers to inform the authorities and their customers about breaches of personal data that they have in their possession.

National telecoms authorities will soon also have the power to set minimum quality levels for network transmission services so as to promote "net neutrality" for all citizens.

Other reforms relate to the establishment of a new European telecoms authority - BEREC - which will ensure fair competition and consistent rules across European telecoms markets. The powers of the European Commission to oversee regulatory remedies proposed by national regulators will also be enhanced.

Therefore, any regulations notified by the national authorities such as those relating to conditions of access to the network of a dominant operator or those relating to fixed or mobile termination rates will be vetted by the Commission in cooperation with BEREC in order to ensure that the EU's single market is not being distorted.

The new telecoms package will come into force in December and member states then have until June 2011 to transpose it into national law.

Such an extensive reform in the telecoms market promises to bring along enhanced competition, better and cheaper fixed, mobile and internet services and faster internet connections for all European citizens. Operators in this market must gear up to face stiff competition and at the same time garner benefits which accrue from a borderless telecoms market.

Dr Vella Cardona is a practising lawyer and a freelance consultant in EU, intellectual property, consumer protection and competition law. She is also a visiting lecturer at the University of Malta.

mariosa@vellacardona.com