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European Union Regulation of Telecoms

The EU commissioner has just announced that a year after warnings were issued to service providers concerning high prices for data roaming charges, she intends to apply a similar price cap to these services shortly. Over the last 30 years the EU has become more and more central to telecoms regulation in member states...

History of EU Regulation

The first phase of Community policy-making focused on establishing common technical development. Starting from 1984, the policy sought to develop:

  • Common standards and specifications
  • Shared research programmes between operators and industry, e.g. the RACE programme
  • Special programmes for the least developed regions using Structural Funds
  • Initial common European positions for international telecommunications

Beginning in 1987 a second policy phase saw liberalisation as the main focus and culminated with the liberalisation of all telecommunications services and networks by 1 January 1998. The 1998 framework was reviewed in 2002, when growing convergence between telecoms, broadcasting and information technology meant the rules had to be adapted.

Three instruments have been used to liberalise the sector in Europe:

  • Progressive liberalisation of former monopolies
  • Accompanying harmonisation measures
  • Competition rules

Recent Initiatives

The latest revision to telecommunications policy was launched in 2007 and seeks to bring the framework up to date for the fast-developing telecoms sector in a Union which now has 27 Member States.

The individual member states retain their own National Regulatory Authorities (NRAs), and it is in these organisations that detailed regulatory policies are devised and enforced, but these must comply with the EU regulatory framework. The UK Office of Communications (Ofcom), for example, was formed on 29 December 2003 following legislation in 2002, at which date it took over an integrated regulatory responsibility from five separate organisations: The Office of Telecommunications (Oftel), The Broadcasting Standards Commission, The Independent Television Commission, The Radio Authority, and the Radiocommunications Agency. The EU maintains bilateral links with these NRAs, and has enforcement mechanisms when necessary.

The EU devised and published a framework in 2002, which addresses the following main policy areas:

  • Consumer Rights Policy
  • Market Access Policy
  • Radio Spectrum Policy
  • Broadcasting Policy

The figure opposite lists at a high level the policy areas addresses by each of these.

EU Ruling on Roaming Charges

Much controversy was generated recently when the EU decided that a reduction in international roaming charges for mobile voice calls must be achieved. The cost of making calls from mobiles to fixed and mobile (including cross-network) subscribers in country has dropped steadily over the last several years, however charges to and from subscribers roaming internationally have remained (in the view of the commissioner) excessive. National Regulatory Agencies (NRAs) cannot unilaterally address this cross-border issue.

Since summer 2007, an EU Regulation has been in place to cap mobile roaming charges both at the wholesale (between operators) and the retail (consumer) level. The so-called Eurotariff cap will progressively reduce further in 2008 and 2009. Only voice calls are covered under the Regulation, so data roaming charges remain unregulated. Clear information on the cost of international roaming must be available to all roaming customers, for example on websites and in agreements. Operators must also send details of roaming charges to customers at the point these charges may be incurred, via mechanisms such as text messages.

The EU commissionerís view is that this approach should stimulate normal price competition between operators to offer attractive roaming packages. It is, however, unusual for an absolute price cap to be set on services by regulation, and this has led to protest by operators across the EU. The drop in revenue this represents no doubt adversely affects the business plans of these operators, and it remains unclear whether increased usage will compensate for this.

The EU commissioner recently (September 2008) announced that a year after warnings had been issued concerning high prices for data roaming charges, she intends to apply a similar price cap to these services shortly.

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