On September 14, 2016, the European Commission published a draft Directive establishing the European Electronic Communications Code (EECC) , which reviewed and emended the EU regulatory framework for electronic communications for the first time since 2009. Reasons for the proposal are the evolution of the sector. Market structures have evolved, with monopolistic market power becoming increasingly limited, and at the same time connectivity has become a widely pervasive feature of economic life. Consumers and businesses are increasingly relying on data and internet access services instead of telephony and other traditional communication services. This evolution has brought formerly new market players to compete with traditional telecom operators (e.g. so called over-the-top -players (OTTs). At the same time, it has also increased the demand for high-quality fixed and wireless connectivity with the rise in the number and popularity of online content services, such as cloud computing, the Internet of Things, Machine-to-Machine communication (M2M) etc. Electronic communications networks have evolved as well. The main changes include: (i) the ongoing transition to an all-IP environment, (ii) the possibilities provided by new and enhanced underlying network infrastructures that support the practically unlimited transmission capacity of fibre optical networks, (iii) the convergence of fixed and mobile networks towards seamless service offers to the end-users regardless of location or device used and (iv) the development of innovative technical network management approaches, in particular Software Defined Networks and Network Function Virtualisation (NFV).
On December 12, 2016, BEREC (Body of the European regulators for the electronic communications) issued its high-level Opinion on the European Commission's proposals for a review of the electronic communications framework (BoR (16) 213), which welcomed the Commission’s proposal to raise the profile of the specific objective of promoting connectivity, and the confirmation of the core regulatory objectives of the current Framework that are the promotion of competition, the internal market, and the interests of end-users. However, BEREC expressed many concerns about some issues indicated in the new regulatory framework. In particular, the main concerns of BEEC were related to:
- restriction of NRAs’ ability to promote competition in the market, in the name of incentivizing investment;
- end-user protection;
- provisions relating to access regulation;
- proposed new rules on spectrum management;
- universal service;
- institutional layout for the regulation of the sector.
BEREC expressed concerns related to the some contradictions in the Commission’s proposals, which aim at constraining NRAs’ flexibility, also restricting NRAs’ ability to promote competition in the market, in the name of incentivizing investment (but ultimately creating a risk that connectivity is pursued to the detriment of competition). Referring to end-user protection, BEREC criticized the principle over the concept of “full harmonization” as proposed by the Commission, which may limit Member States and NRAs to flexibly adapt the applicable EU electronic communications framework to their specific national needs and technological evolution. Pursuant to spectrum management, BEREC underlined the need for spectrum management not to be stiffened through inappropriate and potentially counterproductive centralization solutions. As regards the proposed “peer review” system in particular, BEREC believed that such procedure, which would leave the final say to competent authorities, could work properly to support Member States in consistent spectrum assignment decisions. With reference to the provisions relating to access regulation, BEREC noted that the draft Code is silent on the treatment of non-competitive oligopolies, which are likely to represent a standard feature of EU electronic communications markets in the future; this might put at risk the competitive functioning of such markets and ultimately investment in new, high capacity networks. Around the proposals on Universal Service, BEREC highlighted that measures proposed can raise issues about the potential market distortions and increased bureaucracy that might arise from expanding the affordability measures to include mobile services, as well as to the practicalities of monitoring the situation of end users with respect to affordability. Finally, regarding the institutional layout for the regulation of the sector, Berec expressed concerns that many of the tasks which the Commission proposes to attribute to BEREC lack proper justification, and risk increasing the cost and bureaucracy of European regulation.
On May 18, 2017, ECTA (European Communities Trade Mark Association) welcomed BEREC position papers on the draft European Electronic Communications Code and shared several of the concerns expressed by BEREC. In particular, ECTA underlined that concurred with BEREC’s expression of serious concern about long lasting negative effects on European welfare ‘from a forced stepping back from regulation’. In addition, in order to maintain benefits for all users, ECTA underlined that future regulation must enable NRAs to properly address failures in the markets serving professional users (businesses and public administrations) as well as in mass consumer markets.
However, it is possible to conclude that is desirable to accelerate the processing for the adoption of the directive whether it is correct that the options defined in the proposal will contribute to connectivity through VHC networks, faster time-to-market for spectrum resources and timely 5G deployment, alongside the take-up of ‘Internet of Things’ applications and innovative services, boosting the EU global competitiveness as the benefits from connectivity and 5G spill over into other industries, such as the automotive industry and agriculture, health and transport; and will have a cumulative effect on growth of 1.45% and employment of 0.18 % by 2025, assuming the reforms are implemented by 2020.
Avv. Silvia Giampaolo
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