Towards a Single Telecoms Market
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1 Towards a Single Telecoms Market Wolf-Dietrich Grussmann DG CONNECT Unit B.1 (Regulatory Coordination & Business) FICORA s regulatory event, Helsinki, 8 October 2013
2 Connected Continent package: what's in it? The Communication: Commission's vision for a Single Telecoms Market The costing and non-discrimination Recommendation Proposal for a Regulation to complete the Telecoms Single Market in the EU + Impact Assessment
3 Status quo is depressed revenue and low investment despite increased traffic Source: Cisco; IDC
4 Europe lags behind other parts of the world in broadband investment
5 European fixed broadband networks not fast enough to keep up with our main competitors Average Delivered Broadband Speed (Mbps) Source: Sanford C. Bernstein, based on Bernstein Analysis and ITU
6 Europe is falling behind in mobile: from 3G leader to 4G follower US vs. Europe 4G Population Coverage Source: Sanford C. Bernstein, based on company reports, Eurostat, US Census Bureau & Bernstein Analysis
7 The vision Establishing a borderless European connectivity market with fewer barriers In which telecoms companies can think European and compete globally, and consumers can get what they need and want EU-scale networks supporting a competitive digital single market, which should lead to a lessening of ex ante regulatory pressure. Making Europe an attractive home for web entrepreneurs, device makers, and all international businesses.
8 How can we get there: through a genuine Telecoms Single Market where operators can provide cross-borders digital services from wherever they are located where citizens and businesses can receive digital services from wherever in Europe, wherever they are, without unjustified extra costs
9 It's not just about Telcos Hospitality, Construction Hotels & Leisure Energy &Utilities Wholesale & Distribution Retail Healthcare Natural Resources Educational Services Consumer The whole economy needs the ICT sector fixed. Transportation Manufacturing Services Government Financial Services Telecom 9% Look where the ICT spending went last year! Source: OCDE, Internet Economy Outlook 2012
10 The European Council context Spring European Council (15/3/2013): "the European Council notes the Commission's intention to report well before October on the state of play and the remaining obstacles to be tackled so as to ensure the completion of a fully functioning Digital Single Market by 2015, as well as concrete measures to establish the single market in information and communications technologies as early as possible."
11 Content of the proposal: 1. Single EU authorisation Simplified regulation and enhanced convergence of regulatory conditions 2. European inputs for high-speed broadband Wireless: spectrum coordination; facilitating small cells Fixed: standardised access products 3. Single consumer space Harmonised end-user rights and easier switching Open Internet: net neutrality Phasing out roaming
12 Single EU authorisation Why needed? to reduce existing administrative burdens to ensure easy access to the market (OSS) to provide incentives to expand cross-border to ensure legal consistency to overcome fragmentation
13 Single EU authorisation The proposal Applicable only to European electronic communications providers (pure domestic: current national regime applies) Single notification to the home Member State In line with the current regime, the notification does not have any constitutive value, it is only for information purposes Transparency ensured via central BEREC's registry Notification elements defined in the Regulation Rules of home and host MS apply unless otherwise provided Suspension/withdrawal by home NRA No administrative charges and universal service contributions in host Member States during startup phase Equal regulatory treatment across Member States Faculty to request opinion of home NRA when dispute in host MS
14 Single EU authorisation What else changes to ensure consistency? Enhanced Commission power on remedies, taking into utmost account BEREC's opinion Specific regulatory principles E.g. global competitiveness, investments and innovation Inclusion of three criteria -test in framework Taking into account all competitive constraints from comparable services Infrastructure competition - Recital 38 Recommendation and Decision under Art. 19 FD Fully harmonised end user provisions (Chapters IV & V) But enforcement remains in the hands of each concerned MS for services provided in its territory
15 Wireless Broadband: spectrum Why needed? How? to ensure coordinated and timely availability of new wireless technologies; boost interoperability and ensure economies of scale across Europe Common principles for rights of use of harmonised spectrum for wireless BB Synchronisation of spectrum availability, timing and duration European coordination mechanism for authorisation procedures Simplifying conditions for Wi-Fi and small cells
16 Virtual Access Products Why needed? to lower barriers to entry for multi-jurisdictional operators and enable pan-eu entry across MS borders, with access products of a high standard, which will improve competition and investment in BB provision for consumers and businesses (Recitals Note recital 37: avoid over-regulation) in an increasingly all-ip world, to ensure connectivity with assured levels of quality for providers of end-to-end services (Recital 36)
17 Virtual Access Products How? Defining common features for European virtual broadband access products - Enhanced VULA Layer 3 bitstream terminating segments of LL - Substantive requirements in Article 17: quality across the Union, interoperability, end-user focus, cost effectiveness, operational effectiveness, security & privacy. - Parameters set out in Annex I European assured service quality (ASQ) connectivity upon reasonable request - Substantive requirements in Article 19: quality across the Union, end-user focus, cost effectiveness, operational effectiveness, security & privacy. - Parameters set out in Annex II
18 Virtual Access Products Implementation Include harmonised virtual access products in range of remedies imposed on SMP operators by NRAs (Article 18) - Rules of the framework for imposition of SMP remedies apply; - Avoid over-regulation; - Use of reference offers like for Annex II of the Access Directive. Implementing measures by Commission (Article 20) - Obligation to adopt implementing acts for VULA by 1 January Possibility to adopt implementing acts for the other products Modification of annexes by delegated acts possible
19 End users Consumers and business customers, differentiation where appropriate Full harmonisation of end-users' rights (contracts, transparency etc.) Non-discrimination between domestic and intra- EU services Facilitated change of provider: harmonised rules for switching and number portability 19
20 Pre-contractual information Information to be provided before conclusion of contract: clear, comprehensible, in user's language Integral part of the contract and cannot be altered without express agreement of contracting parties Information on actually available speed and other relevant quality parameters for internet access Information on data volume caps, if any Significant and non-temporary discrepancies are deemed to be non-conformity of performance => remedies under national law 20
21 Transparency, comparison tools, consumption control Transparency: focus on essential information Comparison tools: by certified providers If market does not deliver: NRA or other authority On-going data consumption control (in case of caps) "Bill shock" facility: financial limit set by user; provider has to inform user when 80% consumed Option for itemised bills, free of charge 21
22 Contract termination Any contract, after 6 months with 1-month notice: no compensation except for residual value of subsidised equipment or other promotions No automatic roll-over: in case of tacit extension, provider has to inform user explicitly and in due time; if user does not oppose to extension, user can terminate at any moment with 1-month notice Termination and switching rules apply to all elements of bundles comprising at least one electronic communications service 22
23 Switching and number portability Gaining provider to lead switching and number porting process Automatic termination of "old" contract; refunding of pre-paid credits Number porting and activation within one day No switching against the user's will Providers delaying or abusing the switching process are obliged to compensate users forwarding facility Global process may be set by national authorities 23
24 Net Neutrality Ensuring open internet access Ban on blocking and throttling of specific content, applications and services, Harmonised rules for reasonable traffic management: 1. Legal order or prevention of serious crimes 2. Network security, integrity 3. Unsolicited communication (with prior consent) 4. Congestion management (equivalent types of traffic treated equally)
25 Net Neutrality Volume and speed-based contracts possible Specialised services (IP-TV, business services, VPN, ehealth): possible as long as they do not impair general quality of the internet Important role for national regulators Monitoring Setting minimum quality of service requirements 25
26 Roaming proposals in TSM Roaming III continues to apply Incoming roaming calls FREE as of 1 July 2014 New optional regime: introduction of 'roam like at home' (RLAH) offers: Feasible either through own networks or by way of internalising wholesale costs through bilateral or multilateral roaming agreements; Subject to reasonable use (ability to replicate one's domestic consumption habits); Exemption from roaming decoupling and retail caps; Transitional arrangements;
27 Transitional arrangements (I) Option 1: 1 RLAH offer usable throughout the union by 1 July 2014; Available: RLAH covering 50% of customers by July 2015; RLAH in all retail offers by 1 July 2016; Offers available at least in 17 MS covering 70% of EU population; Negotiation on roaming agreements in good faith to achieve the availability RLAH offers by operators in all Member States
28 Transitional arrangements (II) Option 2: RLAH in all retail offers by 1 July 2014 Available: As of 1 July 2014 at least in 10 MSs covering 30% of EU population As of 1 July 2015 at least in 14 Member States covering 50% of EU population As of 1 July 2016 at least in 17 Member States covering 70% of EU population Negotiation on roaming agreements in good faith to achieve the availability RLAH offers by operators in all Member States
29 BEREC Chair Why needed? Important BEREC role in ensuring effective application of the proposed Regulation, key to collaborative strategic governance Room for improvement in current BEREC set-up To strengthen BEREC, while respecting specificities
30 BEREC Chair How? Through establishment of a permanent (full-time, threeyear - renewable, professional) and independent Chair Appointed by the BoR on the basis of merit, skills, knowledge of electronic communication market participants and markets, and of experience relevant to supervision and regulation, following an open selection procedure Enhanced role of EP (relevant committee) New appointment procedure for Administrative Manager (5 years, in line with the Common Approach on Decentralised Agencies)
31 Investors' reactions The package regarded generally as positive for the industry and investment in connectivity Proposal's potential to enhance product and service innovation Greater coordination of remedies very positive for investment Net neutrality provisions seen as balanced & acceptable Spectrum coordination mostly beneficial, also in short term Simplification of Wi-fi conditions & removal of administrative burdens for small cells beneficial in the medium to long term
32 Adoption Timeline European Council: 14/15 March 2013 European Council: 24/25 October 2013 Entry into force: 1 July 2014 / 1 July 2016 Adoption of the package: 11 September 2013 Adoption by EP and Council: Spring 2014
33 Thank you for your attention!
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