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Revising the EU electronic communications rulebook

Revising the EU electronic communications rulebook

Inês Nolasco Head of Market, Spectrum and Numbering, Legal department, ANACOM.

Inês Nolasco
Head of Market, Spectrum and Numbering, Legal department, ANACOM.

The views expressed in this article are purely personal

The EU regulatory framework for electronic communications, the bloc´s rulebook on electronic communications, is currently under review.

 The rulebook was adopted in 2002 with the aim to expose national monopolies to competition, while also improving the functioning of the EU single market and guaranteeing basic user rights. This framework outlines the core princi01ples and obligations which industry players must abide by and set rules that define how markets are to be regulated so the exercise is of utmost relevance. Having been updated in 2009, this is the second time the rules are being revised.

The review proposals were put forward by the European Commission (EC) in September 2016[1] and are currently being scrutinized by the EU co-legislators, with the EC aiming at finalizing the review still in 2017. The calendar is however expected to derail.

The reform package includes:

  • A draft Directive establishing a European Electronic Communications Code[2]

  • A draft Regulation on BEREC[3], the body which assembles the European Regulators

  • Non-binding communications on establishing a ‘Gigabit Society’[4]and a 5G Action Plan[5]

  • A proposal to sponsor the deployment of public WiFi (WiFi4EU)[6].

Context – the Digital Single Market strategy

The proposals are part of the EU Digital Single Market (DSM) Strategy, an overarching strategy on digital issues for 2015-2020 which aims at “making the EU’s single market fit for the digital age” by “tearing down regulatory walls and moving from 28 national markets to a single one”.[7] One of the 3 pillars of the DSM strategy is the creation of the right conditions and a level playing field for digital networks and innovative services to flourish, with the EC announcing an ambitious overhaul of EU telecoms rules focused on promoting “more effective spectrum coordination, and common EU-wide criteria for spectrum assignment at national level; creating incentives for investment in high-speed broadband; ensuring a level playing field for all market players, traditional and new; and creating an effective institutional framework”.

 02

 

The overhaul of EU telecoms rules

 

The EC wants to ensure that EU citizens and businesses have the best possible internet connection to participate in the digital society and economy. The review proposals are thus intended to create regulatory incentives for both incumbents and competitors to invest or co-invest in the deployment of very high capacity networks. For the first time, the promotion of access to, and take-up of, very high capacity data connectivity, both fixed and mobile, by all EU citizens and businesses, becomes a general objective which national regulators must work on.

Ambitious connectivity targets for 2025 are set, including targets for the deployment of 5G[8].

03

 Key elements of the framework review proposals

Access regulation & the Significant Market Power model

  • The EU ex ante regulatory model based on significant market power (SMP) assessment is retained but there is more emphasis on imposing symmetric regulation to non-replicable assets (e.g. wiring and cables inside buildings).

  • Infrastructure based competition is promoted, with passive remedies prioritised. Regulators should first mandate stand-alone civil engineering obligations and only if the latter are insufficient impose other SMP obligations.

  • Asymmetric regulation is reduced in return for network upgrades. E.g. new network deployments open to co-investment offers are not subject to ex ante regulation and certain wholesale-only networks with SMP are subject to access obligations only.

  • National regulators can impose obligations on the sharing and joint roll-out of passive and active infrastructures, including localised roaming agreements.

  • National regulators must conduct a geographic survey of broadband networks. It´s a forward-looking exercise obliging network operators to provide a three-year forecast of their network deployment plans.

  • The Commission has more control over remedies. If BEREC agrees, the European Commission can veto remedies proposed by national regulators (‘double-lock’ veto on remedies)04

  • National regulators are no longer empowered to impose SMP obligations at the retail level.

 Spectrum

  • Focus on harmonizing spectrum assignment procedures and licence conditions at EU level. The tasks of national regulators regarding spectrum are harmonized.

  • Spectrum licences have a minimum duration of 25 years. The procedure for licence renewal requires that competent authorities decide at least three years before the licence expires.

  • Peer review system. The Commission, BEREC and other national regulators scrutinize national measure05s regarding spectrum assignment procedures and licence conditions. BEREC issues a non-binding opinion on whether the measure should be amended or withdrawn. Departure from the opinion requires justification.

  • The Commission can e.g. adopt binding measures regarding coordinated timing of assignments in harmonised bands.

Over-the-top players

Levelling the playing field. Certain obligations are extended to OTT providers but only where public policy interests so require. E.g. basic obligations regarding security apply to non-number based OTTs. 06

Universal service

 

  • Affordable broadband is included in the universal service scope. Rather than focusing on availability/the deployment of networks, the universal service obligation (USO) aims to ensure affordabilitye. access to functional broadband internet access at an affordable price at a fixed location. The provision of connection at a fixed location (availability) can be included in the US scope if demonstrated that such connection cannot be ensured under normal commercial circumstances or through other public policy tools.

  • Member States have flexibility to extend affordability measures to mobile services.07

  • Universal service to be financed through the general budget and no longer through sectoral funding.

  

End-users rights & Governance

 

  • Full harmonisation of end user rights at EU level. Member States cannot impose more or less stringent end user protection conditions than those provided in the EU Code.

  • Strengthened role of independent national regulators. Minimum set of competences are set and independence requirements enhanced.

  • BEREC is to become a regular EU agency with some decision-making powers (e.g. identify trans-national markets). BEREC involved in the radio spectrum peer review system & double-lock veto system. BEREC to manage a register of notifications by electronic communications networks and service providers.08

 Recent developments

 

The co-legislators are currently scrutinizing the Commission´s proposal.

In the Council, there are issues dividing member states such as whether or not to regulate OTTs and the level of harmonization of services other than number-independent interpersonal communications services. Member states are broadly aligned on rejecting proposals which impinge on their national powers. They reject the EC´s veto on remedies, more EU-level oversight on national spectrum management and not being able to fund the USO through a sectoral fund. They also reject turning BEREC into an EU agency. Several member states want the issue of oligopolies/duopolies to be addressed in the EU Code.

The EU Parliament has also rejected changing BEREC´s institutional status but is more favourable to measures which aim at increasing spectrum management harmonization and centralisation. On access regulation, the EP takes a somewhat de-regulatory stance on some issues.

BEREC has been critical about any attempts by the EC to reduce the flexibility of NRAs to regulate according to national circumstances

 Assessment

 The EU regulatory framework has undoubtedly worked well, spurring competition into otherwise uncompetitive markets, lowering prices and triggering innovation and network investment. However, divides persist between rural and urban areas.

While the 2002 rulebook first and foremost aimed at spurring competition into otherwise monopolized markets by means of access to incumbent owned networks, fostering infrastructure based competition and investment by both incumbents and competitors alike is the new game in town.

For a successful overhaul to take place it will be key to ensure that incentives to investment and to pursuing connectivity do not stifle competition and take-up, which will ultimately put a strain on network investments and innovation.

Limiting national regulators clouts in exchange for more harmonisation and EU centralisation may be a step too far. A one-size-fits-all approach at EU level will not hold. Regulators are better placed to scrutinise their national markets and must retain a flexible toolkit to tackle any anticompetitive outcomes.

While the EC aimed at having the EU Code adopted by end 2017, delays are to expected. A fine balance will need to be struck.

By Inês Nolasco

Head of Market, Spectrum and Numbering, Legal department, ANACOM.

[1] https://ec.europa.eu/digital-single-market/en/news/proposed-directive-establishing-european-electronic-communications-code

[2] http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2016:0590:FIN

[3] http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52016PC0591

[4] https://ec.europa.eu/digital-single-market/en/news/communication-connectivity-competitive-digital-single-market-towards-european-gigabit-society

[5] https://ec.europa.eu/digital-single-market/en/5g-europe-action-plan

[6] https://ec.europa.eu/digital-single-market/en/policies/wifi4eu

[7] Adopted on 6 May 2015. See https://ec.europa.eu/commission/priorities/digital-single-market_en

[8] By 2020, 5G should be commercially available in at least one major city in each member state and by 2025, all urban areas as well as major roads and railways should have uninterrupted 5G coverage

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