The European Commission has unveiled a new “connected continent” plan that is designed to forge a single telecoms market in Europe that simplifies red tape for companies offering wired and wireless broadband, makes the market more attractive for broadband investment, and cuts telecom costs for consumers.
Among the proposals laid out in the Connected Continent legislative package are:
- EU-wide and roaming-free mobile plans
- Simpler rules to encourage investment and cross-border expansion
- EU-wide protection of net neutrality
- Banning premiums on international phone calls made within Europe
European Commission VP Neelie Kroes. who is responsible for the package, tweeted, “Very pleased to say we’ve succeeded in pushing forward major telecoms changes.”
“Further substantial progress towards a European single market for telecoms is essential for Europe’s strategic interests and economic progress. For the telecoms sector itself and for citizens who are frustrated that they do not have full and fair access to internet and mobile services,” said Jose Manuel Barroso, president of the European Commission, in a statement.
Kroes described the proposed legislation as “great news for the future of mobile and internet in Europe. The European Commission says no to roaming premiums, yes to net neutrality, yes to investment, yes to new jobs. Fixing the telecoms sector is no longer about this one sector but about supporting the sustainable development of all sectors.”
In her blog, Kroes noted that Europe has about the same number of people as the United States, Japan and South Korea combined – but those three countries have more than eight-times the amount of fixed wireless broadband and almost 15-times more “4G” coverage than Europe, which has been slow to roll out LTE wireless networks.
“Without the infrastructure to compete, we aren’t going anywhere – in any sector,” Kroes said. “It is time to act; in fact it is already overdue. Current trends are unsustainable for the sector, and unsustainable for our whole economy. The single market boost can revive the European telecoms sector, and help our whole economy: but we must move fast.
She went on to add that the boost from a single European telecom market “won’t come about by rent-seeking in protected national markets. It won’t come about from a sector that seeks to block new ideas or maintain scarcity, frustrating the economy’s need for connectivity and innovation. Nor by looking backwards to yesterday’s cash cows – like unfair surcharges from intra-European calls and sky-high roaming margins.”
Instead, Kroes said, the EU telecom sector needs “the scale to compete globally” and to focus on plentiful broadband access and innovative services that people will want to pay for.”
The Connected Continent project has been in the works for three years leading up to this package of legislation. A statement by the EC called the proposal its “most ambitious plan in 26 years of telecoms market reform.”
The EU has no telecom company that operates across all of its member countries, and operators face different rules – and customers, different pricing – in a system that still operates as if each member country were a separate market. The new legislation would provide a single authorization for operating in all 28 EU member states, and “further harmonizing the way operators can rent access to networks owned by other companies in order to provide a competing service.”
The Commission said that it also included a “demanding legal threshold” for the regulation of telecom sub-markets, which it expects will lead to a reduction in the overall number of regulated markets.
While those changes may be welcomed by operators, the EU also plans to make several changes affecting pricing. The commission’s plan would ban incoming call charges while travelling in the EU as of July 1, 2014. Operators will already be subject to wholesale price cuts for data as part of roaming regulations, a rule that was enacted in 2012 and also takes effect next July.
Operators will have two options, the commission said: either offer phone plans that treat all EU countries as “home” countries for purposes of roaming, or let customers choose a separate, presumably cheaper roaming provider without being forced to buy a new SIM. Prices for EU-wide roaming plans would be set at carriers’ discretion.
Companies currently charge extra for both fixed-line and wireless calls made from a customer’s home country to other EU countries; the new proposal would limit the cost of an intra-EU call to the price of a long-distance domestic call. For mobile calls between EU countries, the EC said that the price charged could not be higher than 0.19 Euros, or about 25 cents, before applicable taxes.
“Companies could recover objectively justified costs, but arbitrary profits from intra-EU calls would disappear,” the EC said.
The proposal would also strongly support net neutrality, by banning the blocking and throttling of Internet content “regardless of the cost or speed of their internet subscription.” Companies can still provide premium services with guaranteed quality, so long as those do not interfere with the speeds promised to other customers. Users would have the right to check whether their providers are meeting the promised speeds and terminate their contracts if they are not.
The proposal also enumerates new consumer rights extended across the EU, including the right to “plain language contracts”, more rights to switch providers or contract, the right to a 12-month contract if a customer doesn’t want a longer one, and the right to have emails forwarded to a new address after switching Internet providers.
The EC said that while member states will remain in charge and benefit from spectrum fees from mobile operators, it will put in place a more coherent framework for allotting spectrum resources in order to encourage cross-border investment by carriers.