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
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.
Telefónica highlights the potential for data to play a transactional role in digital lives.
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 Custom TV
Razorsight Expert's Advice on Real-Time Analytics

11|27|14   |   1:43   |   (0) comments


Razorsight's powerful cloud-based Predictive Analytics solutions are used by the world's leading communications and media brands to drive smarter decisions, enable faster actions and optimize outcomes. Get expert advice.
LRTV Interviews
From 4G to 5G: Alcatel-Lucent's Dave Geary

11|25|14   |   09:09   |   (1) comment


Dave Geary, President of Wireless at Alcatel-Lucent, talks about the evolution of the 4G market, small cells, partnerships, 5G and the IoT.
LRTV Huawei Video Resource Center
Building a Secure Telefonica Network With Huawei's High-End Firewall

11|24|14   |   4:37   |   (0) comments


Andrew Davies, IP architect of the Telefonica, a leading digital communications company, discusses the Huawei security gateway solution and putting the solution into the testbed.
LRTV Huawei Video Resource Center
Huawei Partners with Spirent to Verify CE12816's 10GE Port & TRILL Networking Capabilities

11|24|14   |   2:50   |   (0) comments


Spirent Communications is the world's leading supplier for telecom testing appliances and solutions. Spirent has been in a close partnership with Huawei for a long time.
LRTV Huawei Video Resource Center
Saudi Airlines & Its ICT Transformation

11|24|14   |   2:07   |   (0) comments


In this video, Saudi Airlines discusses its network problems and how Huawei's Agile Network is its all-in-one solution.
LRTV Huawei Video Resource Center
Huawei's Agile Switch Benefiting Saudi Arabia's Yamamah Hospital

11|24|14   |   2:40   |   (0) comments


Saudi Arabia's Yamamah Hospital speaks about how Huawei's Agile Switch has improved the medical service's network infrastructure.
LRTV Huawei Video Resource Center
FanPlay & Huawei Build a Wireless Agile Smart Stadium

11|24|14   |   2:13   |   (0) comments


FanPlay is a cloud-based white label service, which is effectively a football fan engagement platform underpinned by mobile payment technology.
LRTV Huawei Video Resource Center
Building an Agile Stadium

11|24|14   |   3:54   |   (0) comments


Stadiums may be thousands of tons of concrete and steel, but they now need to be agile. Being at the stadium may not be as alluring as it once was. Sports franchises and stadium operators discuss how to get fans back.
LRTV Huawei Video Resource Center
Huawei Helps ChinaCache Tackle Challenges in the Internet Industry

11|24|14   |   3:09   |   (0) comments


ChinaCache is China's largest content distribution network supplier. Huawei's CE12800 has provided ChinaCache with very strong support in its establishment of an infrastructure network.
LRTV Huawei Video Resource Center
Cefinity on Managed Security Services & Next-Generation Firewall

11|24|14   |   7:05   |   (0) comments


Cefinity is a cloud management service provider in Southeast Asia. Ivan Zhang, CEO of the company, discusses the implementation of security service management in the cloud era.
LRTV Huawei Video Resource Center
Huawei's Agile Gateway in the Eyes of Cefinity

11|24|14   |   2:11   |   (0) comments


Cefinity is a managed service provider for enterprise networks. The company currently uses Huawei's AR series routers for the most complete range of functions. CEO Ivan Zhang speaks about the advantages of the AR series routers.
LRTV Huawei Video Resource Center
CTO of Bus-Online Talks About Huawei's Agile Gateway

11|24|14   |   2:53   |   (0) comments


Bus-Online covers around 100 million users everyday. In addition to providing mobile TV, and advertising services to the public, Bus-Online has also entered the field of mobile Internet.
Upcoming Live Events
December 2, 2014, New York City
December 3, 2014, New York City
December 8-10, 2014, Reykjavik, Iceland
February 10, 2015, Atlanta, GA
April 14, 2015, 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
Infographics
Irish Telecom outlines the rise of VoIP technology, including its adoption within businesses and their perception of its quality.
Hot Topics
Net Neutrality Even Mark Cuban Could Love
Mitch Wagner, West Coast Bureau Chief, Light Reading, 11/26/2014
Eurobites: Net Neutrality Battle Looms
Paul Rainford, Assistant Editor, Europe, 11/27/2014
Why 5G Is a Different Beast
Robert Clark, 11/26/2014
New Juniper CEO Can Be Thankful for $14.5M
Mitch Wagner, West Coast Bureau Chief, Light Reading, 11/25/2014
Amazon Eyes Ad-Supported Video – NY Post
Mari Silbey, Independent Technology Editor, 11/25/2014
Like Us on Facebook
Twitter Feed