EU Agrees to Ban Roaming Charges, Enforce Net Neutrality

Iain Morris
News Analysis
Iain Morris, International Editor
6/30/2015



European authorities have finally reached an agreement on rules to ban all roaming charges from June 2017 and prevent operators from blocking or throttling Internet traffic, in disregard of net neutrality principles, from next year.

The agreement comes almost two years after the European Commission (EC) first proposed making sweeping changes to the regulation of the region's telecom sector and follows months of negotiations involving the EC as well as the European Parliament and Council.

Operators have long complained that regulatory moves to lower pricing will hinder investment in next-generation networks but appeared largely to have given up the fight on roaming.

Moreover, while they have been similarly opposed to any enforcement of net neutrality, measures in this area look far less stringent than rules introduced in the US market earlier this year.

Operators will, for instance, be able to offer higher-quality services in partnership with over-the-top (OTT) players as long as this does not affect the Internet experience of the majority -- a loophole that is bound to anger the most ardent supporters of net neutrality.

Policing and enforcing this rule could also prove impractical and it remains unclear how authorities will punish service providers deemed to have overstepped the mark.

"I think the devil is in the details," says Dario Talmesio, the practice leader for Europe with market research company Ovum Ltd. . "This is a political statement in favor of net neutrality, but we still can't tell if and how it will really happen."

Responding to the EC's latest announcement, the GSM Association (GSMA) , which represents the interests of the region's operators, urged European authorities to do more to support the development of a digital single market.

"The region needs a forward-looking policy and a regulatory framework that further strengthens Europe as a preferred location for investment and innovation, with European citizens receiving the same level of protection when using the same or similar communication services," said Afke Schaart, the GSMA's vice president of Europe, in a statement.

A number of the region's biggest players would like to see greater harmonization of telecom regulation between the European Union's various member states. Of particular concern is the current lack of coordination when it comes to awarding new frequency licenses for use with mobile broadband services. But the GSMA also appears worried that national regulatory authorities may approach roaming and net neutrality regulations in different ways.

"It is important that the implementing act on roaming works effectively to prevent negative impacts on domestic markets, and guidelines for the open Internet rules ensure consistent application of the regulation across the EU," said the GSMA.


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The EC is planning more widespread reforms next year that are intended to address issues such as spectrum harmonization, the fragmentation of regulation in other areas and the treatment of over-the-top players.

A major gripe for service providers is that companies such as Google (Nasdaq: GOOG) and Facebook are able to "piggyback" on their infrastructure without facing the same regulatory constraints.

"We still have a lot of work ahead of us to create a digital single market," said Andrus Ansip, the EC's vice-president for the digital single market, in a statement. "Our plans to make it happen were fully endorsed by heads of state and government last week, and we should move faster than ever on this."

Next page: Decline of the roaming empire



Decline of the roaming empire
The EC had wanted to abolish roaming surcharges from next year but met resistance from member states arguing for a much later overhaul.

A compromise means that from June 15 2017 operators will be unable to charge customers prices that are higher than domestic rates for using services in other parts of the EU. From April next year, roaming rates will be capped at 0.05 ($0.06) per minute of a call made, 0.02 ($0.02) per text message sent and 0.05 ($0.06) per megabyte of data -- rates that are about 75% cheaper than existing limits.

However, Ovum's Talmesio is skeptical that roaming surcharges will disappear entirely by June 2017, noting that "firm end dates" for proposed rule changes have already slipped.

He also thinks the EC's moves could have some unintended consequences. "Without roaming surcharges, theoretically consumers can buy their telecom service from the cheapest country and use it at home," he says. "In that sense, cancelling roaming surcharges could translate into tougher in-market competition for local services."

Others reckon the abolition of roaming charges will increase the pressure on operators to become more like the web players they complain have been eating their lunch.

"EU roaming premiums are on their way out, reducing mobile operators' revenues with them," said Mark Windle, the head of marketing for software company OpenCloud Ltd. "Adding further value to their communication services could be the differentiator that operators need to win market share."

Little clarity on net neutrality
Meanwhile, rules on net neutrality are expected to come into force in April 2016, preventing operators from blocking or slowing down services they deem a threat to their own, such as Internet telephony and instant messaging.

Earlier proposals might have stopped service providers from offering higher-quality services of any kind, with net neutrality supporters arguing this would lead to the emergence of a "two-tier" Internet, but these plans were subsequently watered down.

Even so, as Ovum's Talmesio notes, there is still an absence of any real detail on the net neutrality regulations, creating uncertainty for both service providers and over-the-top companies.

That marks something of a contrast with the situation in the US, where the Federal Communications Commission (FCC) has taken a much tougher approach to the whole net neutrality issue.

In late February, the US regulatory body decided to reclassify broadband as a telecom service under Title II of the country's Communications Act, subjecting broadband service providers to utility-style regulations. (See FCC Adopts Title II Rules .)

Banning such practices as traffic blocking, throttling and paid prioritization, US authorities will be able to enforce restrictions by applying much stricter rules developed for the telecom sector.

Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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