Light Reading

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        ADD A COMMENT
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
Juniper looks like it's on the offensive and defensive with the acquisition of data center interconnect (DCI) specialist BTI Systems but will it need to do more?
Nokia's Virtualized Service Router (VSR) and Virtualized Mobile Gateway (VMG) are the latest virtual functions to get an independent evaluation.
The UK government's conclusion that there is no consensus over the need for FTTP has angered the altnet.
Alcatel-Lucent has become part of Nokia, spelling the end for two of the giant brands of the legacy telecom era.
Critical appointment for UK incumbent as it once again adds mobile to the mix and takes its first steps towards a virtualized cloud infrastructure.
From The Founder
Light Reading sits down at CES with the head of Cisco's service provider video business, Conrad Clemson, to discuss how NFV and cloud security relate to video, the challenge of managing 4K/8K traffic, the global expansion of Netflix and virtual reality.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
LRTV Documentaries
EANTC Tests Nokia IP Routing & Mobile Gateway VNFs for Real World Deployment

2|9|16   |   5:08   |   (0) comments


Nokia obtained validation of its virtualized router and virtualized mobile gateway capabilities through rigorous testing performed by EANTC. The results set a new industry benchmark for outstanding performance, scalability, resiliency and manageability. Nokia VNFs are ready for telco cloud deployment, so that service providers can accelerate mobile, business and ...
Between the CEOs
CEO Chat With Level 3's Jack Waters

2|8|16   |   26:15   |   (1) comment


Light Reading CEO and founder Steve Saunders sits down with Level 3 Communications' CTO Jack Waters to discuss hot topics like virtualization, 4K and the future of telecom...
LRTV Custom TV
The Composable Telco

2|8|16   |   24:46   |   (0) comments


Heavy Reading's Principal Analyst Caroline Chappell presents the keynote at Light Reading's 2020 Vision Executive Summit in Dublin.
LRTV Custom TV
Join Us at the Digital Operations Transformation Summit

2|4|16   |   03:52   |   (0) comments


The Digital Operations Transformation Summit on February 21, 2016 at the Crowne Plaza Barcelona Fira Centre will bring together 50 senior executives to engage in a unique debate on the opportunities and challenges presented by the transformative evolving digital landscape. RSVP now at events@lightreading.com.
LRTV Custom TV
Making the Test: ADVA Ensemble Connector vs. Open vSwitch

2|4|16   |   01:28   |   (0) comments


Light Reading, in partnership with EANTC, recently tested ADVA's Ensemble Connector, which replaces open vSwitch and offers carrier-grade capability and interoperability. The test results strengthen ADVA's credibility as a provider in the virtualization space.
LRTV Custom TV
Bridging the Gap Between PoCs & Deployment in NFV

2|4|16   |   31:50   |   (0) comments


Charlie Ashton of Wind River presents the keynote at Light Reading's 2020 Vision executive summit in Dublin.
Between the CEOs
CEO Chat With Mike Aquino

2|3|16   |   17:34   |   (0) comments


The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
Shades of Ray
MWC: Buckle Up for 5G & the IIoT

2|2|16   |   02:28   |   (0) comments


This year's Mobile World Congress looks set to be a 5G land grab and a chance to get down and dirty with the Industrial Internet of Things (IIoT) – but what will the 5G discussions actually be about?
LRTV Custom TV
Case Study: Building China's Next-Gen TV Networks

2|2|16   |   5:01   |   (0) comments


With over 2 billion viewers worldwide, Shenzhen Media Group is one of China's largest content producers. By partnering with Huawei and Sobey, SZMG was able to modernize media operations with the Converged News Center, a production studio that is a model for next-generation workflows.
LRTV Custom TV
Quad Channel Modulator Driver with 46 Gbaud Capability from MACOM

1|28|16   |     |   (0) comments


MACOM's MAOM-003427 is the industry's first surface-mount modulator driver with 46 Gbaud capability to support next generation 200G and 400G applications.
LRTV Custom TV
Video Infographic: Validating Cisco's NFV Infrastructure

1|26|16   |   02:24   |   (1) comment


We all know that the network of the future will be virtual, but when will virtual become a reality? This video infographic covers the four key areas in which Light Reading, in partnership with EANTC, tested Cisco's NFV infrastructure: performance, reliability, multi-service capabilities and single pane of glass management.

For the full report, see

Between the CEOs
CEO Chat With Phil McKinney, CableLabs

1|22|16   |   13:36   |   (1) comment


At CES in Las Vegas, we met with Phil McKinney, CEO of CableLabs. Phil provides an update on the rollout of DOCSIS 3.1, his views on the future of open source and how consumer interest in virtual reality could affect network traffic.
Upcoming Live Events
March 10, 2016, The Cable Center, Denver, CO
April 5, 2016, The Ritz Carlton, Charlotte, NC
May 23, 2016, Austin, TX
May 24-25, 2016, Austin Convention Center, Austin, TX
All Upcoming Live Events
Hot Topics
Google's 5G Radio Ambitions Are Expanding
Dan Jones, Mobile Editor, 2/5/2016
Cincinnati Bell Joins Weight Watchers Club
Alan Breznick, Cable/Video Practice Leader, 2/5/2016
Yahoo & Verizon Sitting in a Tree...
Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 2/8/2016
Vodafone: Flexible Work Policies Boost Profits
Sarah Thomas, Editorial Operations Director, 2/8/2016
It's Time to Integrate OTT Video
Alan Breznick, Cable/Video Practice Leader, 2/8/2016
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Light Reading CEO and founder Steve Saunders sits down with Level 3 Communications' CTO Jack Waters to discuss hot topics like virtualization, 4K and the future of telecom...
The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
Animals with Phones
Retro Is the Way to Be Click Here
Some animals are too cute for smartphones.
Live Digital Audio

Broadband speeds are ramping up across Europe as the continent, at its own pace, follows North America towards a gigabit society. But there are many steps to take on the road to gigabit broadband availability and a number of technology options that can meet the various requirements of Europe’s high-speed fixed broadband network operators. During this radio show we will look at some of the catalysts for broadband network investments and examine the menu of technology options on offer, including vectoring and G.fast for copper plant evolution and the various deployment possibilities for FTTH/B.