COM (2013) 643 final – 13562/13
COM (2013) 627 final – 13555/13
SWD (2013) 331 final – 13555/13 ADD1
SWD (2013) 332 final – 13555/13 ADD2
Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions on the Telecommunications Single Market
Proposal for a Regulation of the European Parliament and of the Council laying down measures concerning the European single market for electronic communications and to achieve a Connected Continent, and amending Directives 2002/20/EC, 2002/21/EC and 2002/22/EC and Regulations (EC) no 1211/2009 and (EU) No 531/2012
Commission Staff Working Document Impact Assessment Accompanying the document Proposal for a Regulation of the European Parliament and of the Council laying down measures concerning the European single market for electronic communications and to achieve a Connected Continent, and amending Directives 2002/20/EC, 2002/21/EC and 2002/22/EC and Regulations (EC) no 1211/2009 and (EU) No 531/2012
Commission Staff Working Document Executive Summary of the Impact Assessment Accompanying the document a Proposal for a Regulation of the European Parliament and of the Council laying down measures concerning the European single market for electronic communications and to achieve a Connected Continent, and amending Directives 2002/20/EC, 2002/21/EC and 2002/22/EC and Regulations (EC) no 1211/2009 and (EU) No 531/2012
Submitted by Department for Culture, Media and Sport on [9th October 2013]
SUBJECT MATTER
1. This EM covers a suite of four related documents:
· A Communication which is a review of the existing telecommunications single market, issues that prevent the completion of same and what steps should be taken to address this issue;
· A Regulation that seeks to address the issues identified in the Communication;
· A Commission Staff Working Paper that is the Impact Assessment of the Regulation; and
· A Commission Staff Working Paper that is an Executive Summary of the Impact Assessment.
The Communication…on the Telecommunications Single Market (13562/13)
2. The Communication begins by setting out the political and economic importance of a fully functioning telecommunications single market and notes that the European Council of March 2013 placed a commitment on the Commission to bring forward proposals to establish such a single market and that these proposals seek to meet that commitment.
3. It then provides a summary of the impacts of the liberalising measures that began in the 1980s and considers the importance of specific developments, such as the Global System for Mobile Communications (GSM) and Universal Mobile Telecommunications System (UMTS) standards, along with the existing telecommunications framework that was put in place in 2002 and reviewed in 2009. It then states the importance of this sector in driving not only Europe’s competitiveness but also wider economic growth that is important in the current economic situation. It then states that decisive further action is needed to prevent any further decline in this market and Europe’s global position.
4. It then considers what remaining barriers exist, citing a study that claims that completion of the single market in this sector could add up to £92 billion (€110 billion) or 0.9%to the EU’s gross domestic product (GDP).[1] It notes that despite the existing regulatory framework, many operators and networks operate on a national basis, with those who have a presence in more than one Member State continuing to operate as several ‘national’ operators rather than a single ‘European’ operator. The Commission claims that such behaviour was not only having a negative effect of pricing, but also on consumer behaviour (though it does not adduce evidence of either). It also asserts that differences in national procedures for the management of spectrum have a negative effect on investment and the roll-out of new technologies, before considering the benefits that could arise from greater harmonisation of the application of the existing regulatory framework and procedures.
5. The Communication then sets out what the Commission believes are the characteristics of a true single market and what measures are needed to change the existing regulatory framework in order to drive the market to begin to exhibit those features. It then notes a commitment made by the Commission at the conclusion of the 2009 review of the regulatory framework to act on the issue of open internet access before setting out four reasons why action is now needed and noting the proposals within the Regulation seek to address these.
6. The Communication then considers matters relating to investment and competition, with the recently agreed Recommendation on Costing Methodologies and Non-discrimination playing a role in providing a framework that will help drive investment in new broadband infrastructure by providing legal certainty on the prices associated with network access.
7. It then notes that the medium-term effects of the proposals will be greater freedom and opportunities for market participants and a trend towards consolidation within the sector, with the market developing in such a way that ex post application of competition law will be sufficient to ensure market functioning. This situation will be addressed by the Commission further developing the existing Recommendation on relevant markets, with an expected reduction of ex-ante regulation. There is also an indication that the Commission will begin to consider what actions are needed to drive further coordination of regulatory remedies and once again raises the possibility of the creation of a single EU telecoms regulator through conducting a review. This review will also seek to address issues relating to the perceived lack of a level playing-field for ‘over-the-top’ services compared to telecoms services, as well as matters relating to the convergence of audio-visual and telecommunication services and markets.
8. The Communication then concludes by reiterating the potential benefits to the EU, its businesses and its citizens from a completed telecommunications market and calls upon both Council and the European Parliament to examine and adopt the proposed Regulation as a matter of highest political priority.
A proposal for a Regulation…(13555/13)
9. The Regulation begins with the Commission’s own EM covering the Regulation (pgs 2 – 13), much of which is an reiteration of the points made in the associated Communication (covered in paragraphs 2 to 8 above). It contains a useful outline of the proposals and supporting arguments on pages 10 – 13 which is reproduced in Annex A of this EM, as well as explaining why the Commission of the view that a Regulation is the most appropriate instrument (page 10).
10. The Regulation then sets down the Recitals (pages 14 – 31) before moving onto the text of the Articles of the Regulation itself. The following is a summary of the Articles, as well as an outline of the effect of each. There are seven groupings of articles, each presented as a chapter and this EM follows the same format.
Chapter I – General Provisions
(Articles 1 - 2)
11. These Articles are self-explanatory and reiterate elements of the preceding Commission EM and associated Communication, as well as provide definitions for terms associated with the Regulation.
Chapter II – Single EU Authorisation
(Articles 3 – 7)
12. These articles seek to create a system whereby any provider of electronic communication services would require a single authorisation from the Member State’s national regulatory authority (NRA) in which they are based in order to be able to provide their services across the EU28; parallels to this scheme are the single banking licence and the CE-marking scheme.
13. The articles also set out provisions regarding the responsibilities of the authorising NRA and, in effect, gives responsibility to that NRA to take action, even if the activities that require intervention are conducted in another Member State, as well as placing an obligation on that NRA to behave in the same way as if the negative behaviour was occurring in its home Member State.
Chapter III – European Inputs
Section 1 – Coordination of use of radio spectrum within the single market
(Articles 8 – 16)
14. This group of articles sets out a number of proposals related to the management of spectrum within the EU. They are:
· An obligation on Member States to notify the Commission whenever a general authorisation or individual rights to spectrum is being granted. This decision would be subject to approval or amendment by the Commission in a process that mirrors existing provisions with the current Framework for market measures;
· Harmonised procedures for broadband spectrum assignments that would cover not only new bands that would be harmonised (such as 700MHz) but also existing harmonised bands. Such actions would include common timetables for granting rights, harmonisation of licence durations (both new and existing), setting dates for the termination of existing uses of spectrum to enable the spectrum to be used for broadband and actions that the Commission can take to ensure Member State compliance with such measures.
Section 2 – European virtual access products
(Articles 17 – 20)
15. These Articles place on obligation on operators to provide two forms of wholesale access products for Next Generation Access (NGA) networks; the aim of which is to drive harmonisation of existing wholesale products which are subject to a variety of technical requirements.
16. The first is an access product that should be provided by operators who have significant market power (SMP): the European virtual access product and the second to be provided by all NGA networks: the Assured service quality (ASQ) connectivity product.
Chapter IV – Harmonised rights of end-users
Costs of international calls and SMS (Article 21)
17. The Regulation proposes that all intra-EU calls from fixed lines should not be charged higher than domestic call rates unless higher rates can be objectively justified, eg by reference to reasonable extra costs associated with routing such calls. Rates for mobile calls and texts are similarly limited by reference to the Euro-tariffs set out in the Mobile Roaming Regulation (No 531/2012)
Cross-border dispute resolution (Article 22)
18. The Regulation extends the requirement in the Universal Services directive (2002/22/EC) to provide out-of-court procedures to resolve disputes between consumers and providers to include cross-border disputes.
Open Internet Access, Traffic Management, Safeguards for Quality of Service, and Transparency and Publication of Information (Articles 23 – 25)
19. The Regulation proposes to introduce a form of ‘Net Neutrality’ that would allow users to freely access and distribute content, information, run applications and use services of their choice. Whilst mirroring the text that is already contained the Framework, it places a new obligation on NRAs to ensure that this is the case.
20. It also seeks to prohibit blocking, slowing down or otherwise degrading access to any services and content, except in instances where there is a genuine need to do so for traffic-management and network-management reasons. It does, however, allow providers to charge extra for different data volumes and speeds, as well as allowing for charges associated with enhanced quality of service, as well as imposing a requirement to ensure that consumers are aware of any specific restrictions or similar by requiring operators to publish specific information regarding speeds, traffic volumes, impact on services and any traffic management policies in place.
Information requirements for contracts, control of consumption and contract termination (Articles 26 - 39)
21. The proposals in these articles contain several provisions that are aimed at increasing consumer protection.
22. The first (Article 26) sets out a series of specific minimum information requirements that need to be contained in a contract and, amongst other things, include: tariff plans and costs; any after-sales services provisions; any restrictions on the use of terminal equipment; payment methods; charges for early contract termination or switching/porting; and compensation.
23. The following Article sets out anti-Bill Shock measures that ensure that a consumer is made aware that they reaching their tariff’s limits and ensures that consumers are still able to access the emergency services through the European emergency number once limits are reached and provides for free-of-charge itemised bills.
24. Articles 28 sets out new requirements covering contract termination by adding to the existing maximum contract term of 24 months and the requirement to provide 12-month contracts by granting consumers a right to terminate contracts after 6 months with one month’s notice. However, end-users may need to reimburse the service provider for the residual value of subsidised equipment.
Chapter V – Facilitating change of providers
Switching & portability of numbers (Article 30)
25. This Articles sets out the requirements aimed at facilitating consumers switching between providers .
26. It contains new provisions that places an obligation on service providers to forward any emails to the consumer’s new email account for a period of 12 months, as well as obligations on operators to reimburse any unused pre-paid credit. It also includes an obligation that all switching be gaining-provider-led.
Chapter VI
Penalties, Delegation of Powers, Committee Procedure and Amendments to Directive 2002/20/EC (Articles 31 – 36)
27. These Articles set out the mechanism for penalties that can be imposed by NRAs, deals with powers of the Commission to bring forward delegating acts and indicates that the Communication Committee will play a comitological role for the management of the Regulation’s provisions. This section concludes by deleting provisions within the Authorisation, Framework and Universal Service directives that would be superseded by the Regulation.
Amendments to Regulation (EU) No 531/2012 (Article 37)
28. This Article contains two elements that would change the recently agreed third EU Mobile Roaming Regulation.
29. The first is that, from 1st July 2014, consumers would not be charged to receive voice-calls.
30. The second element provides an exemption for operators from the obligation to decouple roaming ie the third Regulation allows consumers to choice separate providers for their domestic and roaming provisions (from 1st July 2014). In order to gain this exemption, service providers must form a commercial or technical agreement with other operators that create a ‘virtual’ cross-border network that covers at least 17 Member States and 70% of the EU population and offer at least one retail package that offers a roaming service charged at domestic rates.
31. The Article also provides for a transitional period of three years and makes allowance for reasonable use provisions.