The European Commission has presented its proposals for reforming telecom regulation, aimed at increasing access to very high-speed broadband. In addition to new regulations designed to encourage investment in broadband networks, the Commission presented plans for stimulating public investment in Wi-Fi services, accelerating the introduction of 5G mobile services and extending some rules to online services in order to enhance consumer protection.
Presented as part of Commission president Jean-Claude Juncker's 'State of the Union' address to the European Parliament, the underlying goal of the proposals is to ensure "more and better connectivity" for citizens as well as businesses, in order to help drive economic growth in the EU. The Commission set three new goals for connectivity by 2025: access to download speeds at least 100 Mbps for all households; access to symmetric speeds of at least 1 Gbps for public institutions such as schools, research centres, transport hubs, hospitals and state administrations, as well as enterprises relying on digital technologies; and 5G coverage for all urban areas as well as major roads and railways. As an interim target, 5G should be commercially available in at least one major city in each EU member state by 2020.
Achieving the targets is expected to cost at least EUR 500 billion over the next ten years, and the Commission foresees a shortfall in this of EUR 155 billion based on current investment trends. The recent review of the telecom regulatory framework was designed to look at ways to encourage operators to accelerate their investments in faster networks, and the Commission's proposed reforms to the framework aim to reward those who invest with lighter regulation.
The proposed Electronic Communications Code will require national regulators to map the investment intentions of market players and organise calls for interest in deploying networks in areas where no high-speed networks are planned. Regulators would be able to sanction operators who don't fulfil their investment plans in these areas.
The proposed code would also "substantially reduce" regulation in situations where rival operators co-invest in very high-capacity networks. This is expected to encourage new commercial access agreements between small and large operators and reduce the costs of deployment. In addition, operators who pursue a wholesale-only model will also benefit from reduced regulation. They must invest privately in networks and sell access to other service providers, without offering their own retail services, and would be exempt from some access regulations even if they are still found to be dominant market players.
Access regulation, to ensure alternative operators can use the networks of operators with significant market power, will remain an "important part" of the code, the EC said. Competition at the retail level remains the core principle of regulation, and ex ante access regulation will still be imposed in situations where the market fails to negotiate suitable commercial agreements on network access. In addition, the period for applying access regulation will be extended to five from three years, in order to provide greater certainty for investment.
The proposal also includes strengthening rules on switching and number portability by end-users in order to support retail competition. In particular, the Commission wants it to be easier for consumers taking multi-play subscriptions to change provider. It also clarified the limit on two-year contracts to exclude fees paid by households to bring fibre to their residence. These may apply longer than two years in order to help support network roll-outs.
Consumers will see their right to affordable broadband strengthened though, under accompanying reforms to the universal service directive. The directive will be updated to drop the right to older services such as payphones in order to focus more on requiring universal broadband access. The latter will be based on ensuring access to a changing list of basic services, such as email, search, social media, e-government, banking, and education and job training tools.
Over-the-top providers offering equivalent services to telecom operators will also be subject to part of the sector regulation going forward. The focus is on those online services that use numbers to enable users to communicate, such as make calls and send SMS. Such services will have to provide contractual information to customers and adhere to rules on switching and providing access to the EU emergency number 112.
Other services not using numbers, which the EC gave WhatsApp as an example, would be subject to more limited regulations. These will include ensuring their networks and servers are secure, providing 112 access and ensuring equivalent access for disabled people.
The Commission also confirmed plans for greater harmonisation of spectrum licences across the EU, in order to provide more investment certainty for operators. The Code proposes long licence durations of a minimum 25 years, coupled with more stringent requirements to use spectrum effectively and efficiently. It also proposes to coordinate basic parameters such as the timing of licence awards across EU countries, in order to ensure a quick release of spectrum and roll-out of services throughout the EU.
To further drive mobile network upgrades, the EC presented its promised 5G Action Plan, which foresees a common EU calendar for a coordinated 5G commercial launch in 2020. It also covers joint work with member states and industry stakeholders to identify and allocate spectrum bands for 5G, organise pan-European 5G trials as of 2018, promote common global 5G standards and encourage the adoption of national 5G deployment roadmaps across all EU states. In addition, the Commission is looking at working with private investors to provide venture financing for start-ups working on new applications for 5G networks, in areas such as automated driving, goods delivered by drones, or virtual reality for professional collaboration.
Finally, the Commission proposed a new initiative to help local authorities offer free public Wi-Fi services. With an initial budget of EUR 120 million to 2019, the WiFi4EU programme will offer public vouchers to local governments to finance the installation of Wi-Fi hotspots in public places. A minimum of 6,000 to 8,000 local communities should benefit from the new project by 2020, the Commission expects.
All of the proposals are part of the Digital Single Market plan, presented by the Commission in May 2015 as part of efforts to support the single EU market and stimulate economic growth. They remain subject to approval by the European Parliament and Council before taking effect.
The proposal also includes a regulation granting greater resources and legally binding powers to Berec, the EU telecoms regulator, in order to bring it in line with EU principles on agencies. This also takes account of Berec's greater responsibilities with the recent net neutrality and roaming regulations, as well as plans for it assist with the new reforms, such as providing guidance to national regulators on geographical surveys, commenting on national spectrum assignments and coordinating international issues such as transnational business services and extraterritorial numbers.
National regulators would also see their authority strengthened, with the establishment of a minimum duration for the mandate of board members and minimum appointment criteria. A minimum set of competences that EU states may assign to a regulator is defined, mirroring those of Berec, and the accountability of regulators is also reinforced, with annual reporting obligations.
