Explanatory Memorandum to COM(2013)627 - Measures concerning the European single market for electronic communications and to achieve a Connected Continent - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2013)627 - Measures concerning the European single market for electronic communications and to achieve a Connected Continent. |
|---|---|
| source | COM(2013)627  |
| date | 11-09-2013 |
Europe must tap into new sources of growth to restore competitiveness, drive innovation and create new jobs. The global economy is evolving towards an Internet economy, and ICT should be fully recognised as a source of smart, sustainable and inclusive growth. Europe cannot afford to renounce the benefits of connected technologies which account for 50% of productivity gains in recent years, across all sectors; which create five jobs for every two lost; which is a driver of innovative new services which can quickly reach global scale if enabled to grow. This is the key for Europe to emerge stronger from the crisis, if we address impediments to growth arising from ongoing fragmentation. This has been fully acknowledged by the Spring European Council of 2013, the Conclusions of which foresaw that the Commission should report by October 2013 on the remaining obstacles to the completion of a fully functioning Digital Single Market, and present concrete measures to establish the single market in information and telecommunications technology as early as possible.
The general objective of the proposal is to move towards a single market for electronic communications in which:
- citizens and businesses can access electronic communications services wherever they are provided in the Union, without cross-border restrictions or unjustified additional costs;
- companies providing electronic communications networks and services can operate and provide them wherever they are established or their customers are situated in the EU.
This ambitious goal is important in itself, after over a decade of Union legislative interventions to liberalise and integrate these markets. Urgent and decisive measures to achieve it, as laid down in this proposal, are all the more vital because some of them will take time, after adoption, to produce all of their effects. A single market for electronic communications would promote competition, investment and innovation in networks and services by fostering market integration and the cross-border investment in networks and the provision of services. The specific measures proposed should lead to greater levels of competition on infrastructure quality as well as price, stronger innovation and differentiation, including in business models, and to easier planning of the commercial and technical elements of investment decisions regarding entry or expansion on wireless or fixed markets. It will thus underpin other measures taken to promote the ambitious broadband targets set out in the Digital Agenda for Europe as well as the establishment of a genuine Digital Single Market where content, application and other digital services can freely circulate. Enhanced levels of infrastructure competition and integration across the Union should also lead to a reduction in bottlenecks and thus in the need for ex ante regulation of electronic communications markets, making this over time a sector like any other economic sector subject to horizontal regulation and competition rules.
The growing availability of digital infrastructures and services would in turn increase consumer choice and quality of service, and contribute to territorial and social cohesion, as well as facilitate mobility across the EU; while for the digital economy at large, a better functioning electronic communications sector throughout the Union should lead to greater choice and quality of business inputs, enabling the attainment of productivity gains associated with ICT use as well as from modernised public services. The ultimate goal is to underpin European competitiveness in a world which increasingly depends on the digital economy to function and to grow.
Outstanding single market integration challenges include: first, to remove unnecessary obstacles in the authorisation regime and in the rules applying to service provision so that an authorisation obtained in one Member State is valid in all Member States, and that operators can provide services on the basis of consistent and stable application of regulatory obligations. Second, to ensure greater harmonisation for accessing essential inputs: by guaranteeing mobile operators predictable assignment conditions and coordinated timeframes to access spectrum for wireless broadband across the EU; by harmonising ways to access European fixed networks so that providers can more easily offer their services across the single market. Third, to guarantee common high levels of consumer protection across the Union and common commercial conditions in this respect, including measures to gradually end mobile roaming surcharges and safeguarding access to the open internet. These are distinct challenges, to which this proposal brings distinct solutions, but all are vital to commercial and investment decision-making in this sector and for consumers´ benefit, all must be addressed together now to unleash the single market . These sit alongside the wider challenges of building a digital single market, such as the rules that apply to on line content.
For Europeans to be able to enjoy new innovative high quality services, investment in next generation infrastructure needs to speed up. The right regulatory environment is crucial to contribute to a dynamic and competitive market. It must provide the right balance of risk and reward for those prepared to invest. And it can bring fragmentation of services provision to an end, so that their full benefits are available to all industries and users across the EU. In order to support these objectives, the Commission is adopting together with this proposal a Recommendation on consistent non-discrimination obligations and costing methodologies to promote competition and enhance the broadband investment environment.[1] This Recommendation will promote competition and enhance investments in high-speed networks by providing long-term stability of copper access prices, ensuring access seekers equal access to the incumbent operators' networks thereby ensuring a level playing field, and by setting out the conditions under which price regulation of NGA networks is no longer warranted, in order that investors in such networks would have greater freedom to discover appropriate pricing strategies to secure a return in the presence of competing infrastructures such as regulated copper, as well as cable in some areas and, increasingly, 4th generation mobile networks.
This proposal must also be considered in the context of other recent or impending initiatives in the field. The proposal builds upon and advances the main directives of 2002 governing the provision of electronic communications, as amended in 2009, by introducing directly applicable legislative provisions which shall operate in conjunction with the provisions of the directives on subjects such as authorisation, spectrum assignment and access to networks. The proposal is adopted against the background of the Commission proposal for a Regulation of the European Parliament and of the Council on measures to reduce the cost of deploying high-speed electronic communications networks[2], which already took the approach of addressing in a single instrument a number of distinct regulatory cost elements at various stages of the network investment process which, taken together, allow reductions in broadband roll-out costs of up to 30%. This proposal is also adopted in the knowledge that the Commission Recommendation on relevant markets[3] is to be reviewed in 2014, and that preparatory work is well advanced; rapid adoption and implementation of this proposal could allow a reduction in the number or scope of markets subject to ex ante regulation as part of the prospective analysis of the development of competition in a single market.
In today's world, many new digital services and applications are coming online within the EU's single market. Today's innovation and growth opportunities are often digital in virtually every sector of the economy, ranging from the automotive sector (connected cars) to energy (smart grids), from public administrations (e-government) to general services (e-health). Running almost any kind of business, from small start-ups to large enterprises, requires access to state of the art services and infrastructure. This entire ecosystem depends on the connectivity provided by electronic communications networks.
Today, Europe is fragmented into 28 separate national communications markets, each with a limited number of players. As a consequence, while no operator is present in more than half of the Member States, most in far fewer, overall more than 200 operators serve a market of 510 million of customers. EU rules on, for example, authorisations, regulatory conditions, spectrum assignment and consumer protection are implemented in diverging ways. This patchy scenario raises barriers to entry and increases the costs for operators wanting to provide cross-border services thereby impeding their expansion. This stands in stark contrast with the US or China who have one single market of 330 and 1400 million customers respectively, served by four to five large operators, with one legislation, one licensing system, and one spectrum policy.
Economies of scale and new growth opportunities can improve the returns on investment in high-speed networks and can at the same time drive competition and global competitiveness. Yet within the EU, operators cannot benefit sufficiently from them. Other parts of the world are making significant digital efforts and investments - these investments are paying off for both investors and consumers, but in Europe such upgrades are not happening fast enough.
At the same time, due to fragmented national markets, consumers face less choice, services which are less innovative and of lower quality, and they still pay a high price to make calls across borders or ‘roam’ within the EU. This means they are unable to make the most of digital services potentially available today.
As a result, Europe is losing out on a major potential source of growth. In a world where ICT is pervasive, a fragmented electronic communications market undermines efficiency and productivity across the economy. The untapped potential of an EU single market in electronic communications is estimated at up to 0.9% GDP, or €110 billion per year.[4] The benefits from a single market for business communication services alone amount to almost €90 billion per year.[5]
A sound telecommunications market underpins a wider digital economy, whose dynamism of is reflected in its sustained employment growth. To give some idea of the scale and robustness of that wider economy, there are more than 4 million ICT specialists working in the EU, a number which keeps on growing despite the recession .In the wider economy, increasing ICT investment, improving e-skills in the labour force and reforming the conditions for the Internet economy could boost GDP by an additional 5% up to 2020,[6] and create 3.8 million jobs.[7]
Market barriers for electronic communications impede the benefits of cross-European services: better quality, economies of scale, greater investment, increased efficiency and stronger bargaining positions. This negatively affects the wider digital eco-system including EU equipment manufacturers, and content and application providers, from start-ups to governments. It also has an impact on economic sectors such as banking, automotive, logistics, retail, health, energy or transport that rely on connectivity to enhance productivity, for instance, through cloud computing, connected objects and integrated service provision.
The Digital Agenda for Europe (DAE), a flagship initiative of the EU's Europe 2020 Strategy, has already signalled this vital role of ICT and network connectivity. It sets out many initiatives to promote investment, enhance competition and reduce the cost of rolling out high-speed networks, to ensure that all Europeans have access to fast broadband. The Commission has also launched a Grand Coalition for Digital Jobs, to address the employment potential of this sector.
The Commission is also implementing initiatives to ensure a 'Digital Single Market', and to promote online content, including e-commerce and e-government. It has also proposed a reformed EU Data Protection Regulation, to protect citizens’ privacy while facilitating innovation and business within a single market; and a strategy to promote cyber-security and defend EU critical infrastructures and networks, including a draft Directive on Network and Information Security,[8] which is a vital support to the confidence of citizens and consumers in the online environment.
Moving towards a single market in electronic communications would support the Digital Single Market ecosystem. Such a market would imply, not just modern infrastructure, but also innovative and secure digital services.
Recognising this, the 2013 Spring European Council stressed the importance of the digital single market for growth and called for the Commission to present (in time for the October European Council) concrete measures to establish a Single Market in ICT as early as possible. This proposal, together with the Commission Recommendation on consistent non-discrimination obligations and costing methodologies to promote competition and enhance the broadband investment environment, forms a set of balanced measures aimed at moving towards a Single Market in Telecommunications and fostering investment.
Contents
- RESULTS OF CONSULTATIONS
- LEGAL ELEMENTS OF THE PROPOSAL
- BUDGETARY IMPLICATIONS
- 1.1. Objectives of the proposal
- 1.2. General context
- 1.3. Political background
- WITH INTERESTED PARTIES AND IMPACT ASSESSMENT
- 2.1. Views of stakeholders
- 2.2. Expertise
- 2.3. Assessment of the impact of the proposed Regulation
- 3.1. Legal basis
- 3.2. Subsidiarity
- 3.3. Proportionality
- 3.4. Fundamental rights
- 3.5. Choice of the instrument
- 3.6. Structure of the proposal and main rights and obligations
- European inputs (Chapter III)
- Section 2 (Articles 17 to 20)
- Rights of end-users (Chapter IV, Articles 21 to 29)
- Facilitating change of provider (Chapter V, Article 30)
- Organisational and final provisions (Chapter VI, Articles 31 to 40)
Since the Spring European Council set out in its conclusions the need for concrete proposals to be presented before its October European Council, public consultations had to be conducted within this challenging time-table. In addition to specific formal consultations and consultative events, the Commission has engaged extensively with a wide range of stakeholder organisations to assess the general state of the electronic communications market and how to establish a single market. It has met and received submissions from stakeholders representing all industry segments, consumer organisations, civil society, and national regulators and governments.
On top of that, the Commission organised several consultative events attended by stakeholders representing all segments of the industry, consumers and civil society[9]. These consultations have shown that a large majority of stakeholders share the Commission's problem analysis and recognise that urgent action is needed.
Furthermore, discussions were held in the European Parliament and in the Council of Ministers (TTE Council). In Council, most delegations shared the problem analysis and the need for taking measures to move towards a single market, with a view to safeguard or improve competition and consumer choice, to address net neutrality and roaming and to avoid regulatory arbitrage whilst ensuring more regulatory consistency, including in spectrum management and at the same time avoiding excessive centralisation of competences. Discussions in the European Parliament showed strong support for the thrust of the Commission's proposals and highlighted in particular the urgency of eliminating roaming as part of a single market for electronic communications as well as of introducing a high level of consumer protection and clear rules on net neutrality.
A major study was completed in 2012 on Steps towards a truly internal market for e-communications, also known as the 'cost of non-Europe in telecoms'.[10] The study assessed the state of the EU's single market for electronic communications and estimated the economic potential of a single market.
The Commission also used many other sources of evidence, such as the annual Digital Agenda Scoreboard and economic studies conducted by DG ECFIN, for instance on fragmentation of the telecommunications market in Europe.[11] The EU consultation mechanism under the regulatory framework has also highlighted inconsistent practices by national regulatory authorities (NRAs) when regulating relevant markets. Furthermore, in the context of the Radio Spectrum Policy Programme, the Commission detected a considerable lack of coherence across Member States regarding the authorisation and the opening of spectrum bands for technology-neutral use especially in terms of conditions attached and timing.
In line with its “Better Regulation” policy, the Commission services carried out an impact assessment of policy alternatives.
The main sources for regulatory fragmentation are linked to the main sector-specific requirements for the provision of electronic communications which are subject to EU law (authorisation, access to fixed and wireless inputs, compliance with end-user protection rules). While each of these elements has very distinct features, and the solutions to fragmentation will necessarily be very different, they are all vital if the main barriers to integrated provision of electronic communications networks and services in the Union are to be overcome. In particular, the assessment of solutions has been broken down by reference to a) barriers due to national authorisation regimes linked with inconsistency in regulatory approaches implemented by NRAs; b) lack of co-ordination in spectrum assignments and conditions as well as regulatory uncertainty as to the availability of frequencies; c) lack of wholesale products which allow the provision of services using the network of another operator with consistent service interoperability levels, in the framework of market remedies or reciprocal negotiations; d) fragmentation of consumer protection rules leading to uneven levels of consumer protection and varying commercial conditions, including high costs of roaming and international calls as well as blocking or throttling of services.
In order to tackle these sources of fragmentation, three policy options were selected for further analysis. The first option was based on the regulatory framework for electronic communications as it stands. The second option considered a single legislative instrument (a Regulation) adjusting the regulatory framework only where necessary for a single EU market for electronic communications, based on enhanced EU coordination. The third option included the substance of the second option, but replaced the current governance structure by a single EU regulator in order to achieve full regulatory coordination.
Each policy option was assessed against its effectiveness to achieve the policy objectives, focusing on the costs and benefits for demand and supply sides, including the impact on the structure of the EU electronic communications industry, the economy, jobs, consumer surplus and the environment.
The impact assessment report concludes that the second option is the best available. First of all, a single European authorisation aims at reducing the administrative burden for European operators and would ensure consistency of their regulatory treatment.
The coordination of use of radio spectrum within the Single market will ensure a synchronised availability of spectrum input and the application of consistent conditions attached to its use across Europe, thereby ensuring an efficient use of spectrum. At the same time, this would support a predictable investment environment for high-speed networks, including their wide territorial coverage, which is also a long-term end-user interest.
The availability of standardised wholesale access products at EU level as a potential remedy for significant market power will allow fixed operators to provide their connectivity services to their customers throughout the Union, with a high quality of service. Such availability is expected to have a positive effect on investments, especially across Member State borders, making it easier for companies to enter new markets to follow customer demand and allowing them to do so with access products of a high quality standard, thus enhancing competition and requiring operators to improve their offer by investing in infrastructure and services.
Common rules on quality of services will ensure the freedom of users to have access to services and applications of their choice and on the basis of clear contractual terms throughout the Union, without their internet access being unduly throttled or blocked. They will at the same time ensure the possibility to acquire specialised services for the provision of specific content, applications and services with an enhanced quality of services. Strengthened transparency and contractual rights would ensure the consumers' interest in high quality and reliable services and will strengthen the competitive dynamics of the market.
Finally measures on unjustifiable price differences between domestic and intra-EU calls and those facilitating the provision of Roaming Like At Home offers through roaming agreements aim at abolishing unjustified additional costs for electronic communications services provided across borders.
In conclusion this option would enhance legal predictability and transparency in the most efficient and timely manner. In particular, greater contestability of markets, more common operating conditions (input access, consumer-specific rules) as well as the pass-on of scale advantages due to customer price elasticity or competitive pressure, should lead to greater convergence. Greater competitive pressure, leading to incentives to differentiate, plus greater scale advantages, greater regulatory predictability, and a better environment for mass distribution of innovative services, should all in due course improve the investment environment. While these proposals are expected to have a positive impact on job creation, the precise social and employment impacts are difficult to assess at this stage. The Commission will pay special attention to this aspect during its monitoring and evaluation of the legislation.
Compared to the preferred option, 3 to 5 years more would be needed to achieve the desired result under options 1 (applying the current framework) and 3 (complete change of the regulatory governance for pan-EU services), with foregoing potential additional GDP up to 3.7% over the period 2015 – 2020.
It also takes least time to produce its effects and deliver all the specific objectives, thus achieving the highest possible economic and social benefits of all the options considered.
The Impact Assessment Board delivered an opinion on the draft impact assessment on 6 September 2013.
The report and its executive summary are published with the proposal.
The proposal is based on Article 114 of the Treaty on the Functioning of the European Union, as it relates to the internal market for electronic communications and its functioning.
The current regulatory framework has not been able to fully deliver its objective to establish a single market for electronic communications. The differences in national rules, while compatible with the existing EU regulatory framework, nevertheless create barriers to operating and acquiring services across borders, thereby limiting the freedom to provide electronic communications, as guaranteed under EU law. This has a direct effect on the functioning of the internal market. Member States have neither the competence nor the incentive to change the current regulatory landscape.
Measures at EU level are needed to tackle the underlying causes of the problem. First, the current fragmentation resulting from the national dimension of the general authorisation systems is countered by introducing a single EU authorisation. A single EU authorisation mechanism coupled with the home-country control on the withdrawal and/or suspension of such authorisation would facilitate registration of EU operators and the coordination of the most serious enforcement measures applicable to them. The proposal guarantees greater regulatory consistency and predictability to such companies by granting the Commission the power to require national regulators to withdraw proposed remedies which would be incompatible with EU law. The proposal would ensure much greater convergence in regulated conditions of access to fixed and wireless inputs which facilitate the provision of pan-European services. The full harmonisation of end-users' rights ensures that citizens and providers across the EU have similar rights and obligations, in particular the possibility to market and acquire services across borders under the same conditions.
The principle of subsidiarity is respected as EU intervention will be limited to the extent necessary to remove specified internal market barriers.
First of all, the single EU authorisation is available to operators intending to carry out their activities on a pan-EU dimension and the regulatory obligations inherently linked to the place where a network is located or a service is provided remain to be decided by the national regulator of that Member State. Revenues levied from spectrum assignments will remain with the Member State concerned, while more detailed regulatory principles on spectrum use complementing the high level objectives framed in the EU Regulatory framework still leave a large margin of discretion on details to Member States. Similarly, with regard to the notification procedure to the Commission on spectrum, this is based on a legal compatibility check, rather than substitution of Commission discretion for that of Member States, and is subject to further safeguards such as the examination procedure under comitology. The extension of the benefit of general authorisation to use of small-area wireless access points is confined to unobtrusive, low-power deployments strictly defined by implementing measures. Finally, the imposition of European virtual access products remains with the national regulatory authority of the Member State where the network is located, following a market analysis based on the existing framework; at the same time, the harmonisation of virtual access products uses the same mechanism as for physical wholesale access products foreseen already under the existing framework.
EU action is limited to what is necessary to achieve the objectives identified. Measures will focus on tackling clear bottlenecks to the Single Market, with the minimum necessary amendments to the existing regulatory framework needed in order to create the conditions for new cross-border electronic communications markets to develop at EU level. In doing so it would allow meeting the two-fold Single Market objective of freedom of provision and freedom of consumption of electronic communications services. At the same time, by leaving the existing regulatory framework largely untouched, including in the way that national regulatory authorities supervise markets, it avoids disrupting operations of those providers that would opt for keeping a national (or sub-national) footprint.
Moreover the development of new cross-border markets should take place under the better regulation principle, i.e. by progressively decreasing regulatory pressure if markets are proven to be competitive within a more integrated European context but in accordance with the supervisory competences of national regulatory authorities and subject to ex post competition control. That is beneficial as the national regulatory authorities would also be the best placed to take account of the national specificities when (i) regulating access to physical infrastructures that by their nature remain geographically confined to national or regional level; and (ii) addressing consumer questions in a national context (notably in their language).
Accordingly, the proposed measures will not involve significant changes to governance or shift competences to the European level such as through an EU regulator or pan-European spectrum licensing.
The solutions will enable relevant stakeholders to exploit the synergies of a large single market and reduce inefficiencies in their operations and investments, in the most timely and effective manner. At the same time, the proposal ensures to those operators who opt to provide services in a single Member States continuity of the current rules while benefitting from improved and clearer rules concerning end-users rights, and a more predictable environment for access to spectrum inputs and to high-quality fixed network access products.
The proposal’s impact on fundamental rights such as the freedom of expression and information, the freedom to conduct a business, non-discrimination, consumer protection and the protection of personal data, has been analysed. In particular, the Regulation will safeguard access to the open internet; it sets a high standard for fully harmonised end-user rights, increases business freedom at European scale and should lead to a reduction in sector-specific regulation over time.
The Commission proposes a Regulation as it ensures the removal of single market barriers by complementing the existing regulatory framework for electronic communications. This includes specific, directly-applicable rights and obligations for providers and end users; it also includes coordinating mechanisms regarding certain inputs at European level to facilitate the provision of electronic communications services across borders. A Regulation is important, for example, in a field such as open Internet and traffic management, where a truly common approach is necessary to avoid from the outset the current tendency towards divergent national solutions and to enable both integrated network management and the development of online content, applications and services which can be made available in a common way throughout the Union.
General provisions (Chapter I, Article 1 and 2)
Chapter 1 contains the general provisions, including relevant definitions. It establishes regulatory principles pursuant to which the regulatory bodies involved shall act when applying this regulation in conjunction with the provisions of the existing framework
Single EU authorisation (Chapter II, Article 3 to 7)
Operators wanting to provide services in several Member States must currently be authorised in each of them. The Regulation introduces a single EU authorisation based on a single notification system in the Member State of main establishment of the European electronic communication provider (the home country) and sets out the conditions applicable to it. The withdrawal and/or suspension of the Single EU authorisation are subject to home-country control. Holders of a single EU authorisation are entitled to equal regulatory treatment in similar situations within and across Member States and new entrants and smaller cross-border operators are exempted from administrative charges and contributions to the universal service financing in Member States other than the home country (host countries). Holders of a single EU authorisation will further provide services throughout Europe on the basis of greater consistent application of regulatory obligations
The single European authorisation will thereby reduce unnecessary administrative hurdles and guarantee European providers more consistent rights and obligations to operate across the EU and achieve scale.
Section 1 (Articles 8 to 16)
Mobile providers in Europe today lack the necessary predictability regarding spectrum availability across the EU and must deal with diverging assignment conditions. It is thus more difficult to plan long-term, to invest across borders and eventually to gain scale. Such a patchy situation means that device manufacturers design their products for other markets with greater scale and growth prospects. To put an end to this unsustainable situation, harmonisation of spectrum inputs must be ensured by:
· Defining common regulatory principles applicable to Member State when defining conditions on the use of spectrum which is harmonised for wireless broadband communications.
· Empowering the Commission to adopt implementing acts to harmonise spectrum availability, the timing of assignments and the duration of rights of use for spectrum.
· A consultation mechanism enabling the Commission to review draft national measures concerning the assignment and the use of spectrum.
· Simplifying conditions for the deployment and provision of low-power wireless broadband access ('Wi-Fi', small cells) to enhance competition and reduce network congestion.
Harmonised, high-quality virtual access to fixed networks would facilitate market entry and the provision of cross-border services both to end-users and businesses, and would help drive competition and investment. Today, virtual fixed access products are defined in a variety of manners across the EU. Virtual access to fixed networks to provide cross-border services is harmonised through:
· Defining common features of EU-harmonised virtual broadband access products (virtual unbundling, IP bit-stream and terminating segments of leased lines) when mandated on operators with significant market power.
· Accordingly, national regulators are required to take into account the introduction of such harmonised access products when imposing regulatory remedies, with due regard for existing infrastructure competition and investments and overarching proportionality requirements. The proposal also reflects decisional practice in a provision linking consideration of wholesale price control obligations on NGA networks with competitive constraints from alternative infrastructures, effective guarantees of non-discriminatory access and the level of retail competition in terms of price, choice and quality.
· A right for electronic communications providers to offer and access on reasonable terms harmonised connectivity products with assured service quality to enable new types of online services.
In Europe, both electronic communications providers and end-users face inconsistent rules regarding rights of end-users, leading to uneven levels of protection and a variety of diverging rules to comply with in different Member States. This fragmentation is costly for operators, unsatisfactory for end-users and eventually hinders the provision of services across borders and negatively impacts end-users' willingness to consume them. To guarantee an appropriate level of consumer protection across the EU, rules defining the rights of end-users are harmonised, including:
– non-discrimination between certain domestic and intra-EU (international) communications (unless differences are objectively justified),
– mandatory pre-contractual and contractual information,
– increased transparency and facilities to avoid 'bill shocks',
– the right to terminate the contract after six months without costs (excluding the residual value of any subsidised equipment or other promotions),
– the obligation on providers to provide unhindered connection to all content, applications or services being accessed by end-users – also referred to as Net Neutrality - while regulating the use of traffic management measures by operators in respect of general internet access. At the same time, the legal framework for specialised services with enhanced quality is clarified.
Improved switching rules promote market entry and competition between electronic communication providers and allow end-users to choose more easily the provider which best meets their specific needs. Harmonised principles applicable to switching procedures are provided, such as cost-orientation, receiving provider-led process, automatic termination of contract with the transferring provider.
This Chapter contains first general provisions concerning sanctioning powers of the competent national authorities and rules on the Commission's power to adopt delegated or implementing acts.
Modifications to the Framework Directives as well as to the Roaming and BEREC Regulations are also set out. In particular, with regard to ex ante market regulation and given that each NRA is still responsible for its respective (national) markets, the modifications aim to foster greater consistency and stability across the EU with regard to NRAs' assessment of markets and imposition of regulatory obligations on holders of a single EU authorisation in order to avoid they face diverging obligations for the same market failure in each Member State where they are present. To this end, the provisions envisage a Commission power to require withdrawal of remedies imposed on companies with a single EU authorisation, as well as legal certainty concerning the criteria for identifying markets subject to such ex ante remedies, taking also into account competitive constraints from equivalent services provided by 'over-the-top' (OTT) players.
While the Roaming III Regulation with its structural measures will inject greater competition into the market it is not expected of its own to create a situation where customers can confidently replicate their consumption behaviour in their home Member State when travelling abroad and thereby to end roaming surcharges overall in Europe. Article 37, therefore, builds on the Roaming Regulation, providing incentives to operators to provide roaming at domestic price levels. The proposal introduces a voluntary mechanism for mobile operators to enter into bilateral or multilateral roaming agreements which allow them to internalise the wholesale roaming costs and to gradually introduce roaming services at domestic price levels up to July 2016 while limiting the risk of price arbitrage. Such roaming agreements as such are not a novelty in the market. Roaming agreements already exist allowing their participants (subject to compliance with competition law) to realise economies of scale in the provision of roaming services as between contracting parties. The proposal however requires they are notified to improve their transparency. The proposed voluntary regime is designed to induce the pass-on of such legitimate scale economies to consumers through the provision of roaming services at domestic price levels, under conditions which ensure that roaming throughout the Union is covered and that consumers throughout the Union benefit in due course from such offers. At the same time, the proposal provides the necessary balance to allow operators to adjust their retail offers and to gradually ensure all of their customer base benefits from them. Without bileteral or multilateral roaming agreements it is unrealistic to imagine that an operator alone would be able to provide roaming at domestic price levels throughout the whole Union in the envisaged time frame.
Finally, changes in the BEREC Regulation are necessary to provide more stability to the body and allow it to play a more strategic role, in particular through the appointment of a professional three-year Chair.
The proposed Regulation has no implications for the budget of the Union.
In particular, the proposal to amend the Regulation (EC) No 1211/2009 has no impact on either the number of establishment plan posts or the EU financial contribution to the BEREC Office and is in line with the figures set out in the Communication to the European Parliament and the Council (COM(2013)519 final).