Light Reading
The European Union parliament is one step away from introducing a set of mobile roaming and net neutrality rules that are contradictory and potentially disastrous, argues one seasoned industry analyst.

Could Europe's Net Neutrality Legislation Cause a Comms Car Crash?

Ray Le Maistre
4/4/2014
50%
50%

Europe is one step away from introducing net neutrality rules and abolishing mobile roaming fees between member states of the European Union (EU). And according to one seasoned industry analyst, that means Europe is one step away from communications sector disaster.

The European parliament has voted through the Connected Continent telecom regulation that was proposed in September 2013. That set of rules, designed to create a unified European market for communications services, includes the abolition of roaming charges, the introduction of net neutrality rules (any efforts to ban or block Internet traffic or degrade services/applications will be outlawed), greater customer transparency over contracts, and coordinated spectrum licensing. Now the Connected Continent only has to be approved by the Council of Ministers to be ratified, which is likely to happen during the second half of this year. (See this European Commission announcement.)

On paper, the Connected Continent rules look like a consumer charter. In reality, it is ill thought out, contradictory, and could cause the collapse of Europe's mobile services market, according to John Strand, an independent industry analyst who has been tracking and consulting on the mobile sector since it was in short trousers.

Strand notes that the loss of roaming fees will lead to a decline in infrastructure investment by the operators, and ultimately affect services. But that's just one negative.

He also notes that by scrapping roaming fees, European Union residents would, in theory, be able to buy SIM cards in a country where the service charges/contracts are cheap and then use those services in other countries, where the charges are higher, creating an uneven market. Strand calls this "mobile arbitrage," and he believes "it will become a lucrative speculative market for financial traders, some operators and some MVNOs, however perverse and unintended by the EU."

The European Commission has taken note of this potential scenario, and will include rules against excessive use of such tactics. That means mobile service usage needs to be monitored (by the service providers?) and policed. Strand says how this will be achieved is not specified, but that, in one way or another, customers will need to be monitored and anyone found to be abusing the system would be blocked.

Strand concludes that this means operators, or some other body, will be asked to monitor traffic (something the European Union has criticized the NSA for doing) and block certain users, all as part of the same set of rules that bars service providers from blocking traffic and affecting service delivery. "The EU has created a blatant hypocrisy with net neutrality and roaming. On the one hand it has expressly prohibited blocking and degradation on internet traffic with net neutrality, but it has opened the door to an new monitoring and blocking regime with roaming," he notes, clearly with fire in his belly.

His full set of observations and views can be found here.

Strand has a point. The measures are no doubt well intentioned but it does appear that the details and logistics have not been thought through, and could have damaging ramifications for Europe's communications sector that, as we have pointed out previously, could alter the communications landscape of the region. (See Continental Shift.)

This looks like it could be a slow car crash for Europe. It looks like it's too late to apply the brakes but some air bags could still be inflated. It's clear the mobile operators will continue to use all manner of scare tactics ("we won't have any money to invest, we'll have to ramp up the roaming charges for visitors from the US and elsewhere outside the EU so that our children can eat" etc) in an effort to prevent the Connected Continent measures gaining final approval, but there do seem to be some very large holes in the current plans that need to be worked on to find and deliver a middle ground.

— Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading

(15)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Page 1 / 2   >   >>
RolfSperber
50%
50%
RolfSperber,
User Rank: Light Beer
4/22/2014 | 5:25:29 AM
Net Neutrality
Net Neutrality is ok as long as dedicated networks for demanding users and applications are not outlawed. This applies to multiple site industrial development, science applications and to machine to machine communication. A more general SDN approach will allow for a multi carrier, multi domain "neutral" network for the normal user, while dedicated virtual networks will be reserved for demanding and paying high performance users.
saskok
50%
50%
saskok,
User Rank: Light Beer
4/8/2014 | 4:34:51 AM
Re: Fear of change, nothing more
Absolutly agree, I'll also be happy to drive such 90HP Mercedes models instead of some "Made in China" 90HP car, as they must be same price, both. Same for three-willer choices...
t.bogataj
50%
50%
t.bogataj,
User Rank: Light Sabre
4/8/2014 | 4:16:42 AM
Re: Fear of change, nothing more
I'm quite happy with 90 HP. If you need 200 HP (for whatever reason -- I don't really want to know), then you will pay more than I have to. And someone else will take a 50 ccm three-wheeler for the lowest price.

Which proves my previous point: differentiated offer as a base for different prices. (Regardless of where you live in the EU.)

T.
saskok
50%
50%
saskok,
User Rank: Light Beer
4/8/2014 | 4:03:25 AM
Re: Fear of change, nothing more
It's look like that all cars in Europe with  200 HP  have to have same price regardless manifacturer.
kq4ym
50%
50%
kq4ym,
User Rank: Light Sabre
4/6/2014 | 6:50:25 PM
Re: Talk of Chaos and Collapse is unlikely imminent
I would also tend to think the "sky is falling" scenario is a bit overblown. Things will even out, and probably in the long run benefit customers and companies. It's just a case of change is hard to accept, but change gives new opportunities as well.
bogdan.zytka
50%
50%
bogdan.zytka,
User Rank: Light Beer
4/6/2014 | 6:48:28 PM
Re: uneven market
You're deeply uninformed. Say in Poland signing in for postpaid is not regulated. Anyone can sign in by giving a passport.

Anyway the trick would be that you use somebody's infrastructure without paying for it. Let me explain. Take Livonia - a small country to get full country coverage you need to spend X as compared with multiple the X for any other country.

Then you sign up in Livonia for Operator A, take a SIM to any other country (take France for the sake of argument) and enjoy unlimited voice & data for 15EUR/month. 

Would Operator A be interested in monitoring/banning you? No - because you use French infrastructure and pay them. I would even guess that they would offer free SIM shipping everywhere in EU.  

Of course they would need to beef up their billing and MSC. But compared to RAN rollout those are peanuts. 

French operator, on the other hand, has build their infrastructure pays engineers to maintain the network Y times more than in Livonia, an sees no income from the usage. 

For the market to even out - you would have to even also the average salary and the size of the country...
danielcawrey
50%
50%
danielcawrey,
User Rank: Light Sabre
4/5/2014 | 2:22:30 PM
Re: Combine or not to combine?
It sounds to me like although the point here is to eliminate roaming charges, all that this will do is create more expensive wireless services in the long run.

Having to actively monitor services from the wireless providers perspective is going to cause more oprational expenses.

No one likes roaming fees. But no one likes more expensive wireless bills either. The situations seems like a dismal one altogether. 
DHagar
50%
50%
DHagar,
User Rank: Light Sabre
4/4/2014 | 5:54:35 PM
Could Europe's Net Neutrality Legislation Cause a Comms Car Crash?
@Francoman, so you see this as being a natural evolution of the EU and the markets that have already formed?  Thus, no big deal (ie Car Crash)?

I agree on the monitoring - I don't see that as a big issue within the EU.
Francoman
50%
50%
Francoman,
User Rank: Light Beer
4/4/2014 | 3:19:56 PM
Talk of Chaos and Collapse is unlikely imminent
Unified EU Telecom standards for Net Neutraity will likely cause rate hikes in some EU countries inorder to even out the playing field. EU will likely emerge as  stronger and more unified.  Fears of monitoring are highly exaggerated.
basilicum
50%
50%
basilicum,
User Rank: Light Beer
4/4/2014 | 1:32:15 PM
Re: Fear of change, nothing more
I saw changes in the F1 regulations almost on a yearly basis and the game still goes on. OK, maybe it's an exagerated comparison, but to some extent ... the good old operators which are hardly independent anymore, but part of investment funds that own the same brand throught Europe, have restrictions on operator selection preference aborad - they are basically asking money for using the same network in the end ... As a customer I am pretty happy with the decision
Page 1 / 2   >   >>
More Blogs from Shades of Ray
A select group of industry executives has gathered in Iceland to discuss the future of networks, services, skills, strategies and the role of service provider IT.
Hong Kong-based billionaire Li Ka-Shing is getting ready to start a mobile networks bidding war with BT, according to reports.
BT is talking to potential mobile M&A prey, and in my view EE makes more sense than O2 as a takeover target.
For decades, OSS has been a back-office issue; now it's at the heart of telco transformation strategies.
A threshold has been reached as the telcos commit to SDN and NFV – and that will be good news for some vendors and not such good news for others.
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Interviews
CenturyLink: Building the Case for NFV

12|19|14   |   02:14   |   (0) comments


At the 2020 Vision Executive Summit, James Feger, VP, Network Strategy & Development at CenturyLink, talks about how the US operator is approaching virtual network functions from an operational and business case perspective.
LRTV Interviews
Liberty Global Sees Business Goldmine

12|18|14   |     |   (0) comments


Steen Sorensen, VP of business services for Liberty Global, explains where the giant international MSO sees growth potential.
LRTV Documentaries
EE: The Road to 5G

12|16|14   |   16:02   |   (1) comment


Andy Sutton, the principal network architect at UK mobile operator EE, explains how his company is using Wembley stadium as a wireless test bed and how that's helping EE to plan the evolution to 5G.
LRTV Huawei Video Resource Center
Highlights of Huawei's NFV Open Cloud Forum 2014

12|16|14   |     |   (0) comments


Huawei hosted its inaugural NFV Open Cloud Forum during the SDN & OpenFlow World Congress 2014 in Düsseldorf, Germany. The Forum brought together technology thought leaders, senior executives and telecom professionals from global carriers, industry associations, as well as other partner companies in the ecosystem, to exchange views on and collectively explore how ...
LRTV Custom TV
Realizing Operators' Digital Vision

12|16|14   |   5:23   |   (0) comments


Leveraging technology is fundamental to digital transformation but understanding customers and serving them really well is at the heart of digital businesses. TM Forum lists the following as the strategic pillars of the digital business: business agility and rapid innovation, operational agility and effectiveness, IT and data centricity, plus customer centricity. ...
LRTV Documentaries
US Cellular Injects Analytics Into LTE

12|16|14   |   2:57   |   (1) comment


US Cellular's Mario Vela explains how the operator uses analytics for network planning and what comes next as the carrier looks to eke more value out of its metrics.
LRTV Interviews
How Cox Biz Plans to Keep Growing

12|15|14   |     |   (2) comments


Steve Rowley, SVP of Cox Business, details how the third-biggest US MSO intends to boost its revenues to $2 billion and beyond over the rest of the decade
LRTV Huawei Video Resource Center
Interview With Bill Zhang, Director of SoftCOM Product Management, Huawei

12|15|14   |   2:50   |   (0) comments


Bill Zhang elaborated on Huawei's open philosophy in NFV solution development and network architecture design at the SDN & OpenFlow World Congress 2014.
LRTV Huawei Video Resource Center
Event Highlights: Huawei at SDN & OpenFlow World Congress 2014

12|15|14   |   3:43   |   (0) comments


Huawei joined the 2014 SDN & OpenFlow Congress as one of the key sponsors and contributors. At the event, Huawei reinforced the openness and flexibility of its network infrastructure strategies, and provided updates on its SDN and NVF innovations. Through participations at the exhibitions, forums and speeches, Huawei encouraged the industry to "think bigger and ...
LRTV Interviews
How Cable Biz Services Hit $10B Mark

12|12|14   |     |   (1) comment


Cable operators reached $10 billion in annual business services revenues by delving deeper into their vertical markets and expanding beyond the smallest firms.
LRTV Documentaries
Mediacom Aims to Test Connected Tractors

12|11|14   |   05:07   |   (3) comments


Cable business service provider is taking its services to the 'agribusiness' sector in partnership with farm equipment specialist John Deere and is getting involved in Gigabit Cities developments.
LRTV Interviews
TWC Business Looks Beyond $3B

12|10|14   |     |   (0) comments


TWC Business Services chief Phil Meeks explains how his unit has reached $3 billion in annual revenues and what its plans are for next year.
Upcoming Live Events
February 10, 2015, The Westin Peachtree Plaza, Atlanta, GA
March 17, 2015, The Cable Center, Denver, CO
April 14, 2015, The Westin Times Square, New York City, NY
May 6, 2015, McCormick Convention Center, Chicago, IL
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Hot Topics
T-Mobile, BlackBerry Flirt With Reuniting
Sarah Reedy, Senior Editor, 12/17/2014
1-Gig: Coming to a Small Town Near You
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 12/17/2014
Comcast Launches 4K Streaming Service
Alan Breznick, Cable/Video Practice Leader, 12/18/2014
US Carriers, You're Going to Cuba!
Mitch Wagner, West Coast Bureau Chief, Light Reading, 12/18/2014
T-Mobile Lights Up 27 Wideband LTE Cities
Sarah Reedy, Senior Editor, 12/15/2014
Like Us on Facebook
Twitter Feed
Webinar Archive