Berec has published its High Level Input to the Commission’s White Paper “How to master Europe’s digital infrastructure needs?”. Berec’s comments were well-awaited, considering that in the previous consultation in 2023 (the one about the “fair share”) the very critical position of the European agency contributed substantially in convincing the Commission to (temporarily) abandon these plans.

While being diplomatic in the form, Berec’s document looks like a precise debunking position against main Commission’s envisaged plans in the area of telecom regulation. Berec calls for more discussion and analysis, rebutting most of the Commission’s proposals aimed at reversing the current regulatory framework. Here some hints taken from the introduction (pages 3-11 of the document):

– it may be premature to derive final conclusions on the effectiveness of the Code. TRANSLATED:  slow down with the envisaged reform to water-down the Electronic Communications Code (remarkably: BEREC looks in line with the Council, which is calling for a more prudent approach with respect to the framework review, see Council’s Conclusions adopted on May 21, 2024);

– While recognizing the crucial importance of European competitiveness and economic security for a prosperous European digital sector, their formal incorporation into the policy framework should not undermine the currently pursued objectives, which include promoting connectivity, competition, and protecting end-users’ rights. TRANSLATED: the “competitiveness” story telling, i.e. the idea that the European digital sector should be internally less competitive, in order to be more competitive externally, should be more precisely elaborated. Making strong or even dominant market participants even stronger by modifying the legislative framework in their favour with a view to promoting scale, to the detriment of competition, is not a recipe that can be successful for achieving the Single Market, and for making European businesses competitive and successful globally.

– any further legislative or regulatory interventions within the wider digital domain and in the Computer Continuum, as outlined in the White Paper, will necessitate comprehensive discussion. TRANSLATED: the technological trends described in the White Paper (virtualization, convergence, cloudification ecc) should be analysed more attentively before deriving from them justifications for a radical and disruptive top-down regulatory reform;

– With respect to internet openness, BEREC calls for maintaining such rules in the electronic communications legislative framework. TRANSLATED: do not touch net neutrality principles (this is valid also for the Letta’s report), although discussion about practical cases is always open.

–  The provision of ECN-ECS at EU scale, therefore, appears to respond mainly to strategic business decisions rather than to regulatory levers. TRANSLATED: the Single Market is primarily a matter of business, not regulation. Stop proposing unnecessary regulatory measures to this respect;

– measures focused on regulatory centralisation appear as forced top-down initiatives aimed at prompting market consolidation without addressing a clearly identified underlying problem. Such measures could negatively impact competitive dynamics, potentially leading to reduced end user choice, lower quality and higher prices. TRANSLATED: as above. Stop proposing industrial measures aiming at helping few operators, with the risk to damage the market in its entirety.

– The positive market developments in terms of competition and consumer welfare achieved thus far are indeed not irreversible, should competition and innovation be hampered. Furthermore, focusing on scale that may lead to concentration of markets to a few large pan-European operators, as a means to allegedly increase overall European competitiveness, appears to be unjustified given the lack of empirical evidence supporting such a claim. In several Member States, it is indeed the small fiber operators active at subnational level that are heavily investing in infrastructure and innovations, competing with larger operators, and driving prices down, thereby benefiting EU citizens. TRANSLATED: the European framework has worked well so far, however some ideas contained in the White Paper may lead to affect this competitive and user-friendly scenario. Cui prodest?

BEREC believes that European competitiveness can be effectively fostered by preserving and promoting competition across the digital ecosystem. Encouraging consolidation dynamics would not necessarily lead to a better or faster roll-out of digital infrastructure. In this context, it would be key maintaining a flexible regulatory toolbox for the NRAs. TRANSLATED: consolidation is not a natural solution to enhance investments and coverage in digital infrastructures.

BEREC is concerned about the EC’s proposal of introducing the Country-of Origin approach to authorising market entry for core networks and core network services providers. TRANSLATED: so far, no one has precisely understood ambit and rational for this proposal, neither BEREC;

In terms of electronic communications market regulation, BEREC maintains that before putting forward any review of the current system, and especially such a significant rethinking of the current access regulation regime that proposes substantial shift from ex-ante to ex-post intervention, a thorough analysis of its functioning would have to be carried out. TRANSLATED: stop deregulating the market for political reason or just because “it is time to do it”.  For instance: there is no demonstrable connection between alleged “convergence” in the sector and the suggested deregulation of wholesale access to telecommunications networks.

BEREC believes that the electronic communications EU regulatory framework has proven effective and can be largely deemed successful in delivering adequate results to the market by the promotion of a competitive environment. Overall, EU citizens benefit from high-quality services at affordable prices, VHCNs are being deployed at an accelerated pace, while wholesale access agreements and partnerships between operators are increasingly established through commercial negotiations in a regulated framework. TRANSLATED: The European regulatory framework has worked well, the European Commission should stop to blame its child.

Any significant shift from ex-ante to ex-post intervention, or from national/local to pan-European regulation, must be accompanied by strong justifications. TRANSLATED: stop deregulating the market for political reason or just because “it is time to to do it”.

Regarding the shift from ex-ante to ex-post intervention, removing all markets from the Recommendation identifying markets susceptible to ex ante regulation at EU level is perceived to be unjustified based on the state of the EU ECN-ECS’ markets. This is especially pertinent – considering the persistent competition problems in the wholesale broadband markets. Such a move would restrict the NRAs’ possibility to promptly and effectively intervene ex-ante when a market failure is identified in a specific market. TRANSLATED: as above. Let’s leave to national regulators the analysis whether to deregulate or not in local circumstances, rather than on the basis of a centralised rule.

Also, the introduction of standardised wholesale access remedies to be applied across the Union – as proposed in the White Paper – raises several practical implementation questions (see Annex for details), particularly due to the varying technical features of networks even at regional level within the Member States. TRANSLATED: stop imaging that you can create the Single Market via unproven top-down solutions.

To sum up: Berec does not look to share most of the Commission’s plans in terms of policy reforms in the electronic communications sector. It is not a matter of opinions, rather of approach: BEREC would like to proceed with a facts-based approach, while the Commission’s White Paper is seeking a political endorsement for a top-down radical reform. BEREC and various authors are concerned that some of the most impacting Commission’s envisaged measures are driven by political reasons rather than from analytical evidence.