European Parliament passes telecoms reform package

NeelieKroesThe European Parliament has voted to adopt the EC’s Connected Continent package, albeit with some fundamental amendments. Although welcomed by European Commission Vice President Neelie Kroes, who said the vote represented “the EU delivering for citizens”, particularly as it did away with roaming charges, a number of observers have suggested the reverse may be true.

The ‘Connected Continent’ telecoms Regulation was proposed by the Commission in September 2013. It aims to bring Europe much closer to a truly single market for telecoms in the EU, by ending roaming charges, guaranteeing an open Internet for all by banning blocking and degrading of content, coordinating spectrum licensing for wireless broadband, giving Internet and broadband customers more transparency in their contracts, and making it easier for customers to switch providers.

ETNO (the European Telecommunications Network Operators’ Association) and its members have expressed concern over the vote. “The Plenary vote failed to meet the key objectives set by the EU Commission,” it declares. “The first paragraph of the European Commission proposal for a Connected Continent Regulation reads: ‘Europe has to tap all sources of growth to exit the crisis, create jobs and regain its competitiveness’. And it specifies that the overarching objective is to restore ‘growth and job creation in the Union’. We think that, with today’s vote, we moved further away from this original objective,” it says.

“We recognise the efforts made by the Rapporteur in trying to achieve a balanced text under exceptional time pressure. However, the changes foreseen in the area of Open Internet, the lack of harmonisation of consumer provisions across Europe and uncertainty related to the various roaming regulations in play, will result in an excessive burden for the EU telecoms sector,” it warns.

ETNO Chairman Luigi Gambardella said the vote risked derailing the original objectives of the Connected Continent Regulation, namely a strong European digital industry igniting growth and jobs creation. “We are confident that the upcoming work of the EU decision makers will acknowledge such risk and will embrace the spirit of the Commission’s original proposal, confirming that the EU seeks solutions for growth, and not populist measures,” he stated.

Open Internet measures: Fundamental services could be at risk
The most worrying development is the evolution of the Open Internet provisions. The new wording introduced by the Parliament might result in restrictions of users’ choice and harm EU businesses competitiveness.

ETNO stood behind the principle of an Open Internet since the beginning of the debate. Promoting an open Internet should be promoting the ability to offer innovative and better services for citizens. Regulation should in no way limit such possibilities.

In this context, it says it is very concerned by amendments mandating a complete separation of specialised services and requiring that they have no influence at all on the capacity which is made available to other Internet services.

ETNO says that establishing such a principle would affect the provision of essential innovative services such as telemedicine or e-education, but it would also affect existing services such as IP-TV, tele-presence and Virtual Private Networks (VPNs) for business. It says the text approved would introduce far-reaching restrictions on traffic management, which would make an efficient management of the network almost impossible, resulting in a lower quality internet for all.

Gambardella added: “If the restrictive changes to the Open Internet provisions are confirmed in the final text, the access of European citizens and businesses to innovative and high-quality services will be negatively affected. This would turn into a dangerous situation, in which the European digital economy will suffer and EU businesses will be put in a difficult competitive situation with respect to other regions of the world.”

Few positive elements left: Next steps will be fundamental
ETNO acknowledges the work of the Rapporteur in supporting and further improving measures for a more efficient and more harmonised use of spectrum. These measures support the wide availability of high-speed wireless networks in the EU and should be a priority in the legislative process going forward.

Establishing more targeted and proportionate rules for network access in the EU should also be a top-priority for the co-legislator: this is a unique opportunity to improve the sector’s competitiveness and benefit end-users through increased levels of innovation in networks and services.

Unless the significant corrections mentioned are made during the legislative process, this Regulation will ultimately contribute to increase the already heavy regulatory burden imposed on European companies. This would be in contrast with other areas of the world, where the digital economy is significantly more supported, it concludes.

Matthew Howett, head of Ovum’s telecom regulation practice, noted that in the last few weeks, the entire package of measures risked being dropped because of the contentious issue of net neutrality.

“At the heart of the net neutrality debate is whether fixed and mobile operators should be able to charge more for different levels of Internet access and prioritise certain traffic over others,” he said. “Telcos fear that they won’t be able to invest to meet future bandwidth demands unless they are able to better monetise the access they offer. On the other side of the coin, Internet companies fear that start-ups , consumers and innovation will suffer if there is a further movement away from the current ‘best efforts’ nature of the Internet. In reality, the truth is probably somewhere in the middle.

“The question now is whether operators feel they can work within the scope of the regulation to offer the services they plan to – a last minute lobbying effort to remove some of the wording of what constitutes such services suggests not. The fear exists around whether even basic (and generally accepted), forms of traffic management will be permissible under the Commissioner’s vision for an ‘open Internet’,” he explained.

“The package of measures comes after the current rules have been in-force for more than five years and were in need of a refresh to reflect the fundamental changes that have happened in the industry. They are now subject to further scrutiny by the Parliament and the Council of Ministers during which the lobbying efforts will only intensify.”

EU Member States will now continue to review the regulation and the Commission expects final agreement of the Regulation by end of 2014.

Posted by on Apr 3 2014. Filed under Articles, Broadband, Policy, Regulation, Telco.

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