Cheaper roaming and net neutrality: Here’s what the new EU telecoms law would achieve

The European Commission has formally adopted finalised proposals for a new telecoms law that will bring in net neutrality across the EU, while eliminating roaming costs. The point of the new regulation (a type of European legislation all member countries must implement) is to create a genuine single market for telecoms in the EU, rather than letting today’s fragmented mess continue.

It’s a long document and there’s much to discuss, but before I dive in, here’s the tl;dr version (bear in mind that this all needs approval by the European Parliament and member states before it becomes law):

  • Operators can no longer block web services that steal their custom, like Skype(s msft), as they have been doing in some cases.
  • ISPs can charge content providers in specific cases to prioritize their traffic, and the language has been tightened up since earlier drafts to make sure this doesn’t have a negative impact on normal internet services.
  • Roaming premiums will be eliminated in the coming years, albeit not all at once.
  • Carriers will be able to get licensed in one member state and operate across the EU.
  • Barriers to the offloading of mobile traffic onto radio local area networks (like Wi-Fi hotspots) will be eliminated.
  • Broadband contracts will have to be clearer and people under contract will be able to leave without penalty if the carrier raises prices or changes other significant terms. Switching carriers will also be made easier in other ways, such as the shortening of number-porting times.

Now let’s look at some of the weightiest issues.

Net neutrality

One part of the new regulation was never contentious – it will no longer be OK to block specific services for no good reason. Excellent. But the other “net neutrality” element of the legislative text has been highly controversial.

Leaked drafts of the regulation said end users would be able to agree “general quality characteristics” as part of their broadband contracts – a detail that worried the Commission’s justice department as it could have let carriers apply discriminatory traffic management. This phrase is now gone.

What’s still in there is the ability of ISPs to charge content providers “to transmit the related data volumes or traffic as specialised services with a defined quality of service or dedicated capacity.” “Specialized services” means things such as IPTV (probably the most important thing here, due to the huge amount of capacity it requires), video-conferencing and “certain health applications” (interestingly, VoIP was in this list in the draft, but is now out).

So much for net neutrality? Well, there does seem to be more of a safeguard in there now: the original condition read: “… so long as the provision of such specialised services does not substantially impair the quality of internet access services.” Now, that second clause has been replaced by this sentence: “The provision of specialised services shall not impair in a recurring or continuous manner the general quality of internet access services.”

“Substantially impair” was a very vague phrase. The new wording makes it much harder for a carrier to just focus on assuring quality of service for paying partners, while ignoring the impact on regular services. After all, recurring impairment is the sort of problem net neutrality aims to eliminate.

That said, “the general quality of internet access services” could also be seen as vague phrasing. What if an IPTV provider pays for dedicated capacity or prioritization – something such services can certainly benefit from – and that has a negative impact on other online video services in particular? The wording is certainly tighter and the balance more reasonably struck, but it’s still not perfect.

National regulators will have to monitor how this goes and, unlike the leaked draft, the final text also obliges them to “monitor the effects of specialised services on cultural diversity and innovation.” What’s more, they can also impose minimum quality-of-service requirements for normal internet access services – though that of course depends on the competence of the national regulator (and in a union of 28 countries, there’s huge variation).

Out of many, one

The whole idea of creating a single market for telecoms within the EU is a good thing. As the Commission points out, the EU has more than 200 operators serving 510 million customers, with 28 different sets of regulations – the U.S. has a handful of operators serving 330 million customers, and China has a handful serving 1.4 billion people. This situation does not make Europe competitive.

So the new regulation makes it possible for any operator that has been licensed by one member state to operate across the EU – a bit like how it works with European financial services companies. National regulators can’t stop their citizens from using these services, either. Will this lead to more consolidation in the European carrier market? With over 200 operators right now, it’s inevitable.

Of course, this means telecoms rules need to be more closely harmonized, so the legislation also calls on national regulators to free up available radio spectrum wherever possible with minimum fuss, and to avoid bringing in any conditions or procedures that would “unduly impede” operators offering services across borders.

On the telephony front, fixed operators won’t be able to charge any more for calls to other member states than they would for long-distance national calls. The same caps that mobile operators face for letting their customers call while roaming within the EU, will also apply to calls made from the domestic country to other member states.

Interestingly, the proposals actually roll back an element of the EU’s very recent roaming legislation. That legislation hit operators with a double-whammy: retail price caps and a more long-term structural change, in the form of the forced decoupling of domestic and roaming packages – in other words, consumers would have been free to choose a separate carrier for when they are roaming in another EU country.

As digital agenda commissioner Neelie Kroes now wants to eliminate roaming charges within the EU altogether (a very politically motivated move), the Commission’s approach has now changed. Under the new regulation, carriers will be able to get an exemption from this forced decoupling as long as they voluntarily lower their intra-EU roaming charges to domestic levels by mid-2016, by entering into bilateral or multilateral roaming agreements with other European carriers (or, obviously, their own businesses across various countries).

More offloading opportunities for operators

The new regulation also forces national regulators and ISPs to let people share their Wi-Fi hotspots with others, Fon-style, without making them have to register as a “provider of electronic communications to the public.”

This will help carriers’ to lessen the load on their mobile broadband networks by encouraging users to offload their mobile traffic to fixed wireless connections, as will the relaxation of rules around the deployment of small-area wireless access points.

The regulation also makes it easier for carriers to share and transfer spectrum rights. On the fixed broadband front, it creates a new “European virtual broadband access product” that makes it easier for carriers to roll out across different countries, without being stymied by local monopolies.