The European Commission’s “most ambitious plan in 26 years of telecoms market reform”

Introduction

On 11 September 2013, the European Commission announced its adoption of what it described as the Commission’s “most ambitious plan in 26 years of telecoms market reform” – the ‘Connected Continent’ legislative package. Launched by Commission President Jose Manuel Barroso in his 2013 State of the Union speech, the package aims to establish a single European market for electronic communications in which citizens and businesses can access electronic communications services wherever they are provided in the Union without facing cross-border restrictions or unjustified additional costs, and in which companies providing electronic communications and services can operate and provide them wherever they are established or their customers are situated in the EU.

The package must now be approved by all 28 Member States and by the European Parliament if its provisions are to become law.

Key provisions

Full and fair access to mobile and international services

The most highly publicised provisions in the ‘Connected Continent’ package have undoubtedly been those designed to ensure “full and fair access” to mobile services across the EU by driving roaming charges and international call premiums out of the telecoms market altogether.

If approved, the ‘Connected Continent’ package will amend EU Regulation 53/2012 (the ‘Roaming Regulation’) so that, from 1 July 2014, roaming providers will not be permitted to levy roaming charges on their customers for calls received outside the customer’s home Member State. From 1 July 2014, such providers will either have to offer phone plans that apply everywhere in the EU (‘roam like at home’) with prices determined by domestic competition, or have to allow their customers to opt in each country for a separate roaming provider who offers cheaper rates without the customers having to buy a new SIM card (‘decoupling’).

The Commission’s proposals also seek to remove and prohibit “international” call premiums and to reduce all charges for customers who make calls from their home Member State to another Member State. From 1 July 2014, the maximum permissible charge for making such calls will be €0.19 per minute (excluding VAT). In setting their international call charges, service providers will no longer be able to seek arbitrary profits, but will instead be able to recover only their objectively justified costs.

Full and fair internet access: net neutrality

The Commission is equally concerned that EU citizens and businesses should enjoy full and fair internet access. Its proposed EU Regulation 2013/0309 would ban outright the blocking or throttling of internet content to allow EU users to access internet services in their entirety. This would apply regardless of the cost and speed of users’ subscriptions. Measures would remain in place to allow companies to provide ‘specialised services’ with assured quality (such as IPTV, video on demand or apps using high-resolution medical imaging), but only to the extent that they do not interfere with internet speeds promised to other customers.

If the ‘Connected Continent’ package is approved, customers will enjoy not only full internet access, but also improved and harmonised consumer rights when contracting with service providers. They will have rights to plain language contracts, wider rights to switch provider or contract, rights to 12 month contracts, rights to switch provider if they do not benefit from the internet speed promised in their contract, and rights to have emails forwarded to a new email address upon switching provider.

Coordinated spectrum assignment and a single EU authorisation

EU Regulation 2013/0309, if passed, would improve the coordination of timing, duration and other factors associated with assigning spectrum. The Commission hopes that this will not only benefit EU citizens and businesses, who will be able to benefit from improved 4G and Wi-Fi access, but also mobile operators, who will be able to develop efficient, “nuanced” and cross-border investment plans.

The Commission also seeks to drive efficiency in the telecoms sector by introducing a single authorisation for telecoms operators in EU Regulation 2013/0309. A telecoms operator looking to establish a pan-European service will no longer need to spend time (and money) seeking authorisations across the 28 Member States.

These measures are intended not only to improve certainty and reduce costs for telecoms operators, but also to increate investment in the telecoms sector. The Commission’s proposals should allow telecoms operators to seek single cross-border authorisations and allow companies operating in the telecoms sector to draw up detailed, specific and certain investment plans, making them more attractive to investors.

Intended results

In its introduction to the ‘Connected Continent’ package, the Commission outlines the intended results of its measures. The Commission hopes that the package will improve consumer choice, quality of service, competition between service providers, and investment in the telecoms sector, and also hopes that it will have a wider effect on the European economy by reducing cost.

In recent years, connected technologies have accounted for 50% of productivity gains across all sectors. According to the Commission, they have also created five new jobs for every two jobs lost and have driven new, innovative and efficient services. The Commission intends that the package will stimulate growth and innovation, helping to alleviate the EU’s economic situation.

The Commission’s next step will be to seek approval from the European Parliament and the Member States for the ‘Connected Continent’ package. Provided that it receives such approval, the first changes are likely to take effect by mid-2014. Only then will ‘Connected Continent’s intended results be put to the test.

Further information refer to:

‘Commission proposes major step forward for telecoms single market’ (11 September 2013), European Commission press release.

Click here see the Proposed Regulation 2013/0309.

Co-contributor: Rachel Harrison
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