international roaming

The European governments find a deal on roaming and net neutrality: a low-level compromise


The Council of the EU, which is currently lead by the Latvian presidency, finally stroke an agreement on the draft proposal about roaming and net-neutrality. A mandate has been given to the Latvians to start negotiations with the European Parliament and to find a final deal over a reform that, at beginning – when proposed by Commissioner Kroes in 2013 as the “Connected Continent” proposal – was much more ambitious.

Although there is a great optimism in Brussel, closing the deal will be less easy than expected. And consumers should not be too excited.

The net neutrality proposal

Unlike the recent the new position of the US administration, the EU proposal does not prohibit specialized services. This is probably due to the fact that, due the competition in the European BB market, the Council believes that nobody (an incumbent telco) will be able to abuse with specialized services. In addition, national regulators (such as Ofcom in UK, AGCOM in Italy ecc) will have to monitor in concrete cases whether the emergence of specialized services may effectively impair the availability of ordinary Internet (best effort) in the market. In other words, whether or not this proposal will protect or affect net neutrality, it will mostly depend on the competitive conditions of each national market and the attitude/willingness of the local regulator. This means that Berec and Commission may be required to intervene again.

The EU proposal does not solve drastically the zero rating issue. This matter was debated in the Council but, while there was a majority of Member States opposing to prohibit zero-rating, a number of countries, especially the Netherlands and Slovenia, pretended such practices to be addressed somehow. The reason for that is that only in these countries there are NN national legislations in force, and such rules prohibit price-discrimination. Recently, some Dutch and Slovenian operators have been fined for zero-rating practices. A compromise was found, at a end, with a generic wording:

2. Providers of internet access services and end-users may agree on commercial and technical conditions and characteristics of internet access services, such as price, volume and speed. Such agreements, and any commercial practices conducted by providers of internet access services, shall not limit the exercise of the right of end-users set out in paragraph 1 (NB: par. 1 refer to the right/freedom of end-users to surf freely in the Internet without coercion).

In other words, also for zero-rating practices the attitude/willingness of the national regulators to intervene will play a major role. The Council draft does not set a clear prohibition, however it enact some powers to intervene.

For the rest, the Council text does not contain surprises.

The roaming proposal

The reform of the roaming is very weak and bit misleading. Starting from June 2016 European citizens will be entitled to an amount of voice/Internet traffic abroad without roaming surcharges (the so-called “basic roaming allowance”: “BRA”): the extent of this BRA will be a matter of negotiations with the EP, however the Latvians already proposed very low thresholds (the BRA should be granted for just 5 days at year, for instance). The traffic exceeding the basic allowance will be subject to roaming surcharges, as always. This BRA mechanism seems addressing European citizen going abroad once a year, it doe snot reflect the fact that many people go abroad frequently for personal and business reasons.

The Council did not show intention to review the anticompetitive mechanism allowing big European mobile operators to impose the roaming surcharges. In other words, there has been a discussion about reviewing the level of wholesale roaming charges (i.e. the price that a mobile operator must pay to provide roaming services to its customers abroad), however nothing has been really achieved (the Commission should present a study by 2018: campa cavallo!). As a result, the biggest mobile operators will simply recover from domestic services the profits lost in the roaming, and the retail mobile price will tend to increase overall. Competing operators, such as small MNOs and MVNO, will be prevented to compete because of the high level of wholesale access prices.

In other words, the European non-traveling citizens will simply subsidize the traveling ones.

The Trilogue negotiations

The Latvians have now to negotiate with the European Parliament, which has already shown some disappointment for the deal closed by the Member States. The negotiation will probably look like a bazar negotiation. The low compromise closed by the Council will serve to avoid to grant too much to the European parliament, whose position in April was much more aggressive.

Depending of the outcome of the negotiation, the procedure may last until the end of the year. Being the codecision procedure applicable, the European Parliament will need a strong majority to block the proposal of the Council (within 3 months). In case this happens, and the Parliament succede in tabling further amendments, the Council has to take a decision (further 3 months). In case of disagreement, a new phase (conciliation, 6 weeks) will start.

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