The European Commission has adopted its most ambitious plan in 26 years of telecoms market reform. Launched by Commission president José Manuel Barroso in his 2013 State of the Union Address, the “Connected Continent” legislative package, when adopted, will reduce consumer charges, simplify red tape faced by companies, and bring a range of new rights for both users and service providers, so that Europe can once again be a global digital leader.
The telecoms sector makes up just nine per cent of Europe’s digital economy because all sectors increasingly depend on connectivity to be globally competitive and deliver services.
While successive waves of reform by the European Union have helped transform the way telecoms services are delivered in the European Union, the sector still operates largely on the basis of 28 national markets. There is no telecoms company that operates across the whole EU, and both operators and customers face differing prices and rules, the Commission admits.
To address these problems the main elements of the package are: simplifying EU rules for telecoms operators; pushing roaming premiums out of the market; no more international call premiums within Europe; legal protection for open internet (net neutrality); new consumer rights, with all rights harmonised across Europe; coordinated spectrum assignment; and more certainty for investors.
The Commission said the package will adopt a single authorisation for operating in all 28 member states (instead of 28 authorisations), a demanding legal threshold for regulating telecoms sub-markets (which should lead to a reduction in number of regulated markets), and further harmonising the way operators can rent access to networks owned by other companies in order to provide a competing service.
Incoming call charges while travelling in the EU would be banned from July 1, 2014. Companies would have the choice to either 1) offer phone plans that apply everywhere in the EU (“roam like at home”), the price of which will be driven by domestic competition, or 2) allow their customers to “decouple”, that is: opt for a separate roaming provider who offers cheaper rates (without having to buy a new SIM card). This builds on the 2012 Roaming Regulation which subjects operators to wholesale price cuts of 67 per cent for data in July 2014.
Today companies tend to charge a premium for both fixed and mobile calls made from a consumer’s home country to other EU countries. The proposal would mean companies cannot charge more for a fixed intra-EU call than they do for a long-distance domestic call. For mobile intra-EU calls, the price could not be more than €0.19 per minute (plus VAT). In setting prices, companies could recover objectively justified costs, but arbitrary profits from intra-EU calls would disappear.
Blocking and throttling of internet content would be banned, giving users access to the full and open internet regardless of the cost or speed of their internet subscription. Companies still able to provide ‘specialised services’ with assured quality (such as IPTV, video on demand, apps including high-resolution medical imaging, virtual operating theatres, and business-critical data-intensive cloud applications) so long as this did not interfere with the internet speeds promised to other customers.
Consumers would have the right to check if they are receiving the internet speeds they pay for, and to walk away from their contract if those commitments are not met.
New rights for consumers will include the right to plain language contracts with more comparable information, greater rights to switch provider or contract, the right to a 12-month contract if you do not wish a longer contract, the right to walk away from your contract if promised internet speeds are not delivered, and the right to have e-mails forwarded to a new e-mail address after switching internet provider.
Coordinated spectrum assignment will ensure Europeans get more 4G mobile access and Wi-Fi and the Recommendation on Costing Methodologies and Non-Discrimination is the second element of this package, complementing the proposed regulation and intrinsically linked with it.
It aims to increase certainty for investors, to increase their investment levels, and reduce divergences between regulators.