Support for a strongly unified Europe has been hit hard by the region’s long recession, and so digital commissioner Neelie Kroes has been swimming against the tide with her firm backing for a more centralized approach to telecoms. Kroes believes this is essential to no less than the survival of Europe as an influential player in the mobile sector it once defined, and she continues to develop this theme in speech after speech. But in reality, her wings have been clipped ‘ in the build-up to presenting her set of proposals to the European Parliament this week, there has been be plenty of rhetoric about ‘5G’, but no scheme for a single ‘super-regulator’, one of her pet projects.
The main elements of the proposed package are a single ‘authorization’ to simplify and reduce regulation across the 28 member states, even without the single centralized agency; the gradual elimination of roaming charges; the adoption of net neutrality; additional consumer rights in areas like broadband contracts; coordinated assignment of spectrum; greater support for Wi-Fi offload and community hotspots; and standardized wholesale products for fixed line operators
Kroes claimed: ‘This is essential for Europe’s strategic interests, economic progress, for the telecoms sector itself, and for citizens who need full and fair access to telecoms services such as internet and mobile services,.’ And she has not given up on her plan for a single regulatory body. ‘One day there will be a European regulator,’ she said determinedly, while stressing that the current ideas had to be ‘pragmatic and’ linked into a very tough time schedule’.
In other words, the single regulator would have been too tough to get past the Parliament, and could have derailed other proposals on topics like roaming and spectrum. By contrast, the ‘single EU authorization’ though designed to reduce the red tape involved in launching cross-border services, will generally come from the national regulator.
The next steps will be for two parliamentary committees (Industry, Research and Energy; and Internal Market and Consumer Protection) to review the legislation before the whole assembly votes, which must be done by mid-April at the latest.
An important element of the finalized proposals is the net neutrality section, which is far tighter than previous, rather woolly drafts, and would enforce a broad definition of neutrality across the whole EU. Under the proposed rules, operators would no longer be able to block web services that compete with their own, like Skype, but ISPs could charge content providers in specific cases to prioritize their traffic, as long as this did not have a negative impact on normal internet services.
Roaming premiums would be eliminated in stages over the coming years, as previously outlined. While there will be no super-regulators, the laws would enable carriers to be licensed in one state and operate across the EU as well as bringing a new degree of harmonization to spectrum allocation and rules and making it easier for carriers to share and transfer spectrum.
Importantly for capacity-stretched cellcos, barriers to the offloading of mobile traffic to Wi-Fi hotspots will be taken down. If the proposals are accepted, regulators and ISPs would be forced to let people share their Wi-Fi hotspots with others, as in the FON model, without them having to register as ‘providers of electronic communications to the public’, as they technical do now in some places. That could lead to a mushrooming of the homespot and community Wi-Fi ideas, as a low cost way for cellcos to offload traffic.
The plan also creates a ‘European virtual broadband access product’ that makes it easier for carriers to roll out universal fixed broadband services across different countries, without obstacles from local incumbents and pledges more flexible and transparent consumer contracts.
And there are other moves which, if accepted by the European Parliament, would get closer to Kroes’s goal of a single telecoms market. For instance, she wants the Commission to be empowered to mandate national regulators to withdraw proposed rules which do not comply with EU law, to standardize carrier obligations across the region. Another important, though only vaguely defined, idea is that all national regulatory decisions must promote investment.
The climbdown on the single regulator, however, is a serious one, and appears to have happened at the eleventh hour. According to a report by the London Financial Times in August, the Commission was still seriously considering a super-regulator to cover all 28 member states. A leaked document, produced by the EC Directorate General for Competition, said ‘a true pan-EU regulator would be the most effective solution to remove national divergences’. However, the EC claims that document referred to some older draft proposals.
Also disappearing from Kroes’s wishlist, as she balances her vision for European telecoms revival against what can realistically secure support from parliament, are ‘Euro-tariff’ termination rates; proposed changes to the definition of an electronic communications services provider; and pan-European spectrum licences ‘ though improved spectrum coordination remains a centrepiece of the plan, as a way to enable pan-European business models and operators.
The proposals are being put forward against a backdrop of European decline in terms of its power in the telecoms industry. Kroes, like the heads of many European operators and vendors, is wistful for the old days when the region led the mobile revolution and so helped to reshape telecoms overall. She and Telecom Italia chief Franco Bernabe, speaking at the GSMA Mobile 360 event, lamented that recently announced mergers will shrink the European mobile base (Nokia handsets going to Microsoft) and its global influence (Vodafone selling its US business). And she repeated her mantra that Europe is falling behind other areas in rolling out LTE (though UK leader EE’s announcement that it had crossed the onem subscriber mark, making it Europe’s largest 4G operator, may have cheered her a little).
She offers two remedies for that ‘ one practical and relatively short term, to reform EU regulatory and spectrum frameworks for greater unity; one more blue-sky, to lead the world in developing and eventually deploying ‘5G’ (even though nobody has defined what that will really mean). ‘We could be back in the driving seat ‘ and we should,’ she told the Brussels event. ‘It is indeed time to act.’
She added: ‘Even as we roll out the latest 4G networks, I know we also need to look ahead to invest in researching the next generation of networks ‘ I am talking about 5G. We missed 4G, we were the leader in 3G, now let’s take over the 5G.’ There are various projects already underway under EU auspices, or those of individual countries, like the UK’s 5G centre at the University of Surrey. But while vendors like Huawei and Samsung are vying to promise 5G as though it were just a small step from LTE, in reality these projects are focused on technological leaps that will not be commercial for a decade.
GSMA director general Anne Bouverot brought a touch of reality to proceedings, telling TotalTelecom: ‘I don’t think we should give up on the deployment of 4G, I think we are at the beginning of the deployment of 4G. We shouldn’t just say that because we started slowly and maybe we didn’t have the right investment, let’s completely forget it. 5G will not come until 10 years from now. I’m not ready to say let’s not do anything until ten years passes by.’
She agrees with Kroes, though, that Europe needs to get back in the mobile driving seat urgently. Despite having the world’s highest unique subscriber penetration rate at 79%, Europe is the only region that saw revenues decline in 2010 to 2012 (from €162bn to €151bn) and, according to a GSMA report: ‘Europe was long viewed as a pioneer in mobile, but, as our report illustrates, is now lagging behind other regions in the deployment of mobile broadband, particularly in 4G/LTE. Bouverot issued a rallying cry, saying: ‘Despite this, the mobile industry can play a key role in the European recovery, but this will require policy that encourages investment in mobile broadband connectivity, enables innovation and helps build consumer confidence in mobile services.’
At the end of 2012, LTE accounted for just 0.3% of total devices in Europe, compared to 11% in the US and 28% in South Korea. A more coordinated pan-European approach to spectrum would encourage investment confidence and help boost capacity and new services, believes the GSMA.
With more than 100 mobile operators and almost 530 MVNOs, the group said, the EU needs to ‘reduce barriers to efficient market consolidation by simplifying merger reviews and taking a more cautious approach to the imposition of remedies’.