EU Agrees Telecoms Regulation Package But Backs Down on Internet Rights Issue

The EU has reached a last-minute agreement on the proposed major overhaul of European telecoms regulation, following the "talking out" of a similar set of proposals submitted before the summer recess for elections. The last-minute compromise, between the European Commission and member states, has been tabled just before the end of the six-week cut-off period given for a new submission, following the start of the new session of the European Parliament.

The agreement hopes to enact several key areas of telecoms reform in the bloc, including the creation of BEREC, the so-called "super regulator" which will replace the piecemeal bodies currently responsible for enacting EU telecoms regulation. The set of proposals also contains legislation designed to encourage broadband service expansion, customer privacy rights, and number porting, and several key pledges on Internet access rights and net neutrality.

The EU Parliament is set to vote on the compromise legislation during its next session at the end of this month, but given that the agreement was reached by a unanimous vote, it is unlikely that the bill will face any further resistance. EU member countries will then have 18 months to pass any relevant legislation into national law.

Outlook and Implications

• Agreement Reached Just Before the Bell: Following the failure of the last submission for this package of regulation reforms, which was rejected as member states attempted to force a clause strengthening Internet access rights, this latest agreement has been reached just before the expiry of a six-week period following the start of the Autumn parliament session—after which the bill would have had to be dropped (see Europe: 7 May 2009: EU Telecoms Reforms in Doubt After Amendment on Internet Rights). The reform is aimed at creating more unified telecoms regulation across Europe, and give national regulators and the European Commission more power to punish anti-competitive behaviour.

• Protecting the Public While Pushing Competition: The proposals contain some strongly worded guarantees on user's rights concerning improved honesty from operators concerning service standards—something which is likely to be aimed at broadband providers following widespread failure to meet anything close to promised download speeds (see United Kingdom: 28 July 2009: Ofcom Survey Finds U.K. Broadband Speeds Still Failing to Meet Promises). There are also some key pledges on net neutrality and the protection of consumer's personal information, giving national regulators more muscle to crack down on offending operators. There are also some key threats regarding the potential forced functional separation of dominant incumbent operators, although there a few EU countries left where such drastic action would need to be enforced. The reforms are likely to elicit the predictable howls of anguish from the larger operators, who have already seen large cuts in roaming rates across the EU this year (see Europe: 2 October 2009: Blow to Operator Appeals as EU Court Adviser Says Roaming Caps are Valid), and are facing similar legislation regarding termination rates—something they say they cannot cope with as the ongoing economic slowdown continues to hit revenues. However, the proposed reforms widely follow the European Commission (EC)'s drive to empower regulators to end anti-competitive and unfair practices, so no operator in the EU can be shielded from competition.

• A Boost for Broadband for All: The proposals contain some effective legislation, designed to remove remaining barriers to bringing high-speed Internet to the whole of the EU. The EC has pushed for greater synchronicity in bandwidth reallocation, with a view to re-farming the key digital dividend spectrum as soon as possible (see Europe: 3 November 2009: GSMA Calls for Greater Harmonisation of Spectrum Reallocation in EU). The proposals also contain an extension of the universal service agreement to include next-generation broadband networks, and pledges to ensure wholesale access to new fibre (FTTX) roll-outs, as the EU seeks to boost broadband provision in underserved regions—something it says is key to economic recovery and future growth.

• A Disappointing Compromise on Internet Rights: Following months of legal wrangling concerning the rights of the individual to Internet access in Europe, the EU has notably watered down its previously firm stance on disconnection (see Europe: 26 October 2009: EU Drops Proposals to Enshrine Internet Access—Report). The EC had previously stated it regarded Web access as a fundamental human right, along the lines of fresh water or electricity, which should only be removed following a court order or independent judicial review. However, this view has not been enshrined in any legislation—and it was precisely this legislation which led to the proposals in May being "talked out". Finland has recently become the first country in the world to pass such a law (see Finland: 15 October 2009: Finland First to Make Broadband Access a Legal Right), and there was hope the EU may follow suit. However, following pressure from the major record and film labels to crack down on Internet piracy, several governments including those of France and the United Kingdom have proposed legislation based on a "three strikes" model, where repeat offenders would be automatically disconnected—something which has been fiercely opposed by both rights campaigners and ISPs, who say such proposals would be unworkable and ineffective. The latest EU proposals contain a lot of loose phases concerning the protection of user's rights, but significantly call for governments to ensure a right of appeal—meaning disconnection without a court order can take place, and it will then be down to the individual to challenge the decision. Although this is something of a disappointment for Internet rights campaigners, the compromise has been reached to ensure the whole package of important telecoms reforms is enacted with no further delays.