The European Parliament moves to abolish roaming charges and to shore up net neutrality. Will Europe's digital economy benefit? Eva Munk has the story.
You’re visiting relatives across the border for the weekend. You use Google Maps on your smartphone to find your aunt’s place. You send a few photos to friends back home. You check your e-mail once a day. A month later, you’re hit with an outrageously high phone bill.
In other words, you were roaming in Europe, where the cost of using mobile voice, SMS and data can easily double or triple while traveling. But all that is about to change. Well, maybe.
On April 3, in a vote of 534 for, 25 against and 58 abstaining, the European Parliament adopted a telecom package that pulls the plug on roaming tariffs.
After Dec. 15, 2015, telecom providers in the European Union will no longer be allowed to charge extra roaming costs to their customers, meaning wherever you are in the E.U., you will pay the same price for data, SMS, MMS and voice calls as you pay at home.
What’s more, the package also aims to boost net neutrality in Europe, mainly by stopping Internet service providers from blocking or slowing down services which are provided by their competitors.
"This vote is the E.U. delivering for citizens,” said Neelie Kroes, vice president for the digital agenda at the European Commission, after the vote. “This is what the E.U. is all about – getting rid of barriers to make life easier and less expensive. … Nearly all of us depend on mobile and Internet connections as part of our daily lives. We should know what we are buying, we should not be ripped-off, and we should have the opportunity to change our mind. Companies should have the chance to serve all of us, and this regulation makes it easier for them to do that. It’s win-win.”
But there’s a catch. In order for the law to go into effect, all 28 states of the E.U. must now sign up to it.
A long time coming
Still, the parliament vote is a huge step forward and a major victory for Kroes, whohas been fighting for a single telecoms market since 2007. And a tough fight it has been. For example, the E.U. didn’t start capping roaming rates until July, 2012.
“There is no other sector of our incomplete European single market where the barriers are so unneeded, and yet so high,” Kroes told the European Parliament’s Committee on Internal Market and Consumer Protection last May.
However, according to Alessandro Gropelli, head of communications and media at the European Telecommunications Network Operators' Association (ETNO), which lobbies on behalf of the European Union's biggest telecoms operators, yet another change in roaming regulations is the last thing the industry needs.
“At the moment, our companies are implementing [the E.U.] Roaming Regulation III, which was approved less than 20 months ago by the same European Parliament and [European] Council upon proposal of the European Commission,” he says.
Designed to address the lack of service provider transparency by seeking to increase competition, the regulation mandates that, by July 2014, European subscribers will be able to purchase roaming packages from alternative roaming providers, regardless of their domestic services provider, while using the same SIM card or mobile device.
“Our position has consistently been that regulatory certainty is paramount,” Gropelli adds.
Will base prices rise?
Also, there is no guarantee that the end of roaming will not actually lead to a rise in base prices.
"Roaming might not be subject to surcharges anymore, but the overall level of tariffs would increase, and non-roaming customers might effectively foot the bill for roaming customers," the European Association of Full MVNOs (EAFM) warned prior to the April 3 vote.
In other words, telecoms have to get the money somewhere.
“Looking at it literally, yes, it is advantageous for consumers that roaming rates will come down sooner, which is why the European Commission were keen to implement it through the single market proposals,” says Purvi Parekh, Partner, co-head, international telecoms practice, Olswang. “However, it will be difficult for the mobile operators. … Regulatory bodies and governments have to acknowledge that the telecom companies, like any other company, are still businesses. If we genuinely want them to keep innovating and to keep improving their services, we need to provide them with a stable regulatory environment that enables that to flourish, not put up more barriers for them to overcome.”
Still, she believes that competition will likely keep base prices in check.“Ultimately, Europe does have a competitive market and what better way than competition to keep prices down?” she says.
Net neutrality rules
The new rules on net neutrality are also a thorn in the side of the telecoms industry.
According to Gropelli, the new rules risk derailing the original objective of the European Commission, which is reigniting the growth of the European digital economy. “We feel that, at this moment, with the restrictive amendments on net neutrality, we will be giving less room to maneuver to European businesses and less choice in the end to users of the European Internet,” he says.
Specifically, he objects to attempts to restrict the way telecom operators can offer specialized services, such as facilities-based voice over IP (VOIP), IP video, e-reading services, heart rate monitoring or energy sensing.
“We risk being forced to effectively separate specialized services from the rest of the Internet,” Gropelli says. “This would be detrimental to all those providers of services that rely on our ability to offer the specialized services, but it might also ultimately restrict the users’ choices.”
According to Gropelli, the new rules also restrict E.U. operators’ ability to compete on a global basis.
The arduous trek ahead
The April 3 vote by the European Parliament was a huge step forward, but the legislative process is far from over.
All 28 member states now have to agree to the telecom package for it to become E.U. law, and this is by no means a done deal. Already, the United Kingdom and the Netherlands have expressed their dislike for the package, and there is no guarantee that the others won’t join them.
If the Council of the European Union submits amendments, there will have to be a second vote in parliament. And due to the upcoming E.U. parliamentary elections, it will be a new parliament. Whether it will be as staunchly behind roaming regulation as it predecessor is anyone’s call.
Still, one thing is certain, if unbridled roaming continues, Europe itself stands to lose.
In an official communication dated Sept. 11 of last year, the European Commission stated that a strong and dynamic telecoms sector supporting innovations, such as Cloud computing, new tools that use Big Data, connected cars, smart manufacturing, the Internet of Things, smart cities, modernized public administrations, e-Health and e-Education, could add €110 billion annually to Europe’s GDP.
What’s more, a streamlined telecoms sector would encourage outside investment. “You take 28 different regulatory regimes and [as an investor or new player to the market], administratively, it is a big burden to enter all of those markets; so they pick and choose,” Parekh says. “The connected continent proposals will streamline this burden and make it easier for an investor to look at Europe as one market, rather than 28 different ones.”
In an Oct. 24 tweet, Kroes put it more succinctly: “Either our telecom companies embrace data-driven change, or they will become corporate road kill.”
Eva Munk is a regular contributor to Open Mobile Media.
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