Insights Telecoms: European Commission publishes Communication and legislation on improving connectivity in Digital Single Market.

The Commission has proposed an ambitious overhaul of EU telecoms rules with new initiatives to meet Europeans’ growing connectivity needs and boost Europe’s competitiveness.

The Commission is proposing a new European Electronic Communications Code, which includes simplified rules to make it more attractive for companies to invest in new top-quality infrastructures across the EU.  In addition, the Commission has published an action plan to deploy 5G across the EU from 2018.  The Commission has also introduced “WiFi4EU”, which aims at helping European communities offer free Wi-Fi access points to all citizens.

Reaching Europe’s connectivity objectives is estimated to require €500 billion investment over the coming decade, the Commission says. This money will largely have to come from private sources.  However, under current investment trends, there is likely to be a €155 billion investment shortfall.

In order to address this investment challenge, the Commission proposes a modernisation of the current EU telecoms rules. The new Electronic Communications Code proposes:

  • increased competition and predictability for investments: investors need long-term certainty, the Commission says. This means a stable regulatory environment that reduces divergences between regulatory practices across the EU. The new Code will apply market regulation only where end-user interest requires it and where commercial arrangements between operators do not deliver competitive outcomes. The new Code substantially reduces regulation where rival operators co-invest in very high-capacity networks and makes it easier for smaller players to be part of investment projects, thanks to the pooling of costs, the overcoming of scale barriers, etc. New rules make the investment case more predictable for first time investors who take the risk to invest in those networks in less profitable areas, such as rural areas;
  • better use of radio-frequencies: reducing divergences between regulatory practices across the EU is particularly relevant in the area of radio spectrum, which is the key raw material for wireless communications, the Commission says. The new Code proposes long licence durations, coupled with more stringent requirements to use spectrum effectively and efficiently. It also proposes to coordinate basic parameters such as the timing of assignments to ensure the timely release of spectrum to the EU market and more converged spectrum policies across the EU with the aim of providing full wireless coverage across the EU;
  • stronger consumer protection: updated rules will make it easier to switch suppliers when consumers are signed up to bundles of services and ensuring that vulnerable groups (such as the elderly, disabled and those receiving social assistance) have the right to affordable internet contracts; and
  • a safer online environment for users and fairer rules for all players: selected rules are extended to new online players who offer equivalent services to traditional operators, to ensure that security requirements (making sure networks and servers are secure) apply. The rules also foresee the possibility for users to reach the EU emergency number 112 via such online services in the future. This will not imply any additional costs for the users.As for “WiFi4EU”, this is a new initiative designed to help all interested local authorities offer free Wi-Fi connections to any citizen, for example, in and around public buildings, health centres, parks or squares. With an initial budget of €120 million, this new scheme has the potential to deliver connectivity to thousands of public spaces, generating 40 to 50 million Wi-Fi connections per day, the Commission says. The Commission and investors in the telecoms sector are also considering providing venture capital to start-ups developing 5G solutions for innovative applications and services across industrial sectors. This would take the form of a specialised venture financing facility helping them to bring new services to market such as in the area of automated driving, goods delivered by drones, or virtual reality for specific purposes. To read the Commission’s press release in full and for links to the proposed legislation, click here.
  • As for the Commission’s action plan for 5G, this aims to identify and allocate spectrum bands for 5G, organise pan-European 5G trials as of 2018, promote common global 5G standards and encourage the adoption of national 5G deployment roadmaps across all EU Member States.
  • As part of the legislative proposals, the Commission is also proposing to reinforce the role of national regulators, and the Agency, BEREC, to ensure consistent and predictable application of the rules throughout the Digital Single Market, limiting the current fragmentation and inconsistencies.