ARCEP contributes to the European Commission public consultation on the review of the EU electronic communications regulatory framework
Via ARCEP - Press Releases
Dec 8, 2015
Paris, 8th December 2015
On 11 September 2015, the European Commission launched a public consultation on the review of the directives that make up the regulatory framework for electronic communications in Europe , which was adopted in 2002 and amended in 2009. Along with French authorities, ARCEP believed it was important to contribute to the process, the outcome of which will have a major influence on the sector's future development.
The current regulatory framework has had a decisive impact on opening up former State monopolies to competition , which paved the way for investments that have been beneficial to the whole of society, and provided users with increasingly competitive and innovative services. By opening the market to competition, the regulatory framework for electronic communications has contributed to building a digital single market by making it possible to provide services on a Europe-wide scale. Without undermining the objectives of the current framework, the future framework must build on what has been achieved thus far and, looking ahead seek to meet two core challenges: to provide connectivity to the most advanced services to every citizen, and to preserve the openness of the digital environment.
The next European framework must therefore be set within the context of profound technological and economic changes brought about by:
a new round of massive, long-term investments in superfast fixed and mobile access networks;
a new digital ecosystem created, first, by the arrival of services delivered via the internet which has altered the traditional value chain of electronic communications services and, second, by future developments, with the Internet of Things for instance.
These developments require a clear, new approach to defining public policies and actions, including an increasingly necessary distinction between regulations governing networks - transport infrastructure whose deployment and operation are guided by economic circumstances and local constraints - and regulations governing digital services which belong to global markets that are subject to very little territorial constraints, aside from regulatory ones. Among other things, this new set of rules should guarantee that all players can continue to innovate and experiment .
The main elements of ARCEP's contribution:
Protecting the openness of the digital environment
In line with the new regulation on open internet access and roaming in Europe, which sets an ambitious framework for net neutrality, some questions specific to the electronic communications sector will require solutions that are harmonised at the European level. Consumers and businesses are indeed increasingly faced with transparency issues and newfound obstacles, particularly when moving from one closed environment to another. Issues such as possible changes to interoperability, portability and user protection obligations which extend beyond electronic communications services will all need to be addressed.
Ensuring quality of service and users' trust in all "digital communications" services
At a time when more and more communications services delivered online are becoming potentially interchangeable with traditional electronic communications services (voice calls, messaging), it is important that the European regulatory framework evaluate consistently all "digital communications" service providers. It is only then that each obligation contained in the framework will need to be adapted to meet the stated objectives with respect to pre-existing rules.
Setting out precise and detailed connectivity objectives, especially for mobile coverage, for the whole European continent
On the whole, the connectivity objectives of the Digital Agenda for Europe could be strengthened and made more specific. Above all, they must first be completed by mobile coverage objectives for 2025 and 2030, for the whole European continent. These include 4G and later 5G coverage objectives for cities, rural areas as well as rail and road transport routes, which will be needed to satisfy European consumers' and businesses' growing mobile data needs.
Adapting radio spectrum management at the European level and recognize a right to experiment
Possible changes to the institutional procedures and forms that will shape spectrum management in the future will stem from connectivity objectives. In addition to greater harmonisation of European spectrum regulation (notably regarding timetables), accompanying measures for optimising frequency allocation processes could also be considered.
As a result, common tools for frequency auctions could be made available to and adapted by Member States. Common definitions of the terms and conditions for using the spectrum allocated by national authorities, such as coverage indicators definition, could be brought more in line with one another or harmonised, with the parameters set at the national level. A stronger participation from the Body of European Regulators for Electronic Communications (BEREC) could also be considered in sharing best practices for spectrum allocation and licence monitoring, notably in the definition of possible European indicators, in coordination with the Radio Spectrum Policy Group (RSPG).
ARCEP also supports the Commission and RSPG initiatives that seek to further innovation and definition of technical terms and conditions, particularly for spectrum optimisation and sharing mechanisms, all of which are crucial to ensuring the end-users' needs and the connectivity of millions of objects. This search for innovation could be supported by a right to experiment that is recognised at the European level.
Consolidating regulation tools in order to ensure the deployment of superfast systems
The so-called "asymmetric" regulatory framework, whose purpose was to open up access to the incumbent operator's network, through the imposition of obligations to the latter, has achieved its objectives in that it helped open up former State monopolies to competition in an efficient manner, which stimulated investment and encouraged the development of innovative services. However, this framework has also reached its limits: if it is well suited to deal with existing monopolies, it does not prevent the creation of new local monopolies, nor does it address the challenges affecting the whole industry and possibly users. The so-called "symmetric" regulation is an effective complementary tool and therefore a better articulation between symmetric and asymmetric remedies should be considered.
Lastly, if creating incentives for investment and co-investment in new generation access networks could involve taking into account a risk premium when setting wholesale access prices, it must not lead to a reduction of access obligations. The openness of access networks remains a fundamental prerequisite to healthy competition, investment and innovation. Furthermore the definition of access products, whether passive or active, depends on local or national circumstances, and therefore falls within the remit of the national regulator.
Making electronic communications regulation part of the "better regulation" process
Ten years after it was first included in the framework, the current process of notifying market analysis could be lightened by setting strong objectives and clear rules at the European level, while giving national regulatory authorities (NRAs) more flexibility to choose the appropriate remedies for national markets, based on a common regulatory toolkit, in order to achieve the set objectives. Now that a new round of massive investment is getting underway, concerns over the predictability of remedies must be addressed.
NRAs could therefore continue to establish regulatory decisions adapted to their own national circumstances, and favouring the development of the internal market, while the European Commission would only need to monitor the progress made on achieving connectivity objectives without necessarily having to examine a priori each measure proposed by NRAs at the end of a market analysis exercise.
Regarding interconnection, the current framework for call termination regulation could be streamlined through a more automatic symmetric regulation for maximum termination rates, or be determined at the European level, while still being based on cost-based models that reflect national market characteristics, developed in tandem with NRAs.
Moreover, it is vital to ensure the predictability and consistency between the evaluation that the Commission is likely to make of the ex ante regulatory measures adopted by NRAs, on the one hand, and State aid on the other. Notification of national programmes devoted to achieving connectivity objectives, and which include both the award of State aid and ex ante measures, would pave the way to better coordinated rollout policies. NRAs' role in implementing State aid also needs to be better defined, particularly as NRAs have the required expertise when it comes to determining the parts of the country where State involvement may prove indispensable, along with the power to impose access to all networks, and to lay down the technical and economic terms and conditions of this access, regardless of whether the networks are deployed through private or public-sector initiative.
This quest for optimised procedures makes it possible to take better account of the local nature of the networks to be regulated, and the global and symmetric nature of interconnection. This will also enable NRAs, BEREC and the European Commission to allocate their resources to essential tasks that require strong coordination in Europe, such as regulating digital services.
Guaranteeing universal access to electronic communications
A safety net such as the universal service must continue to exist to ensure the rapid supply of access at a fixed location to essential services of the digital society without impeding market dynamics. When it comes to the rollout of new networks, the universal service must not replace other possible mechanisms, such as national superfast broadband rollout plans based on a long-term industrial policy or coverage obligations listed in mobile licences. In addition, measures in support of users with disabilities should be required from all operators and not just the universal service provider, as part of a symmetric approach and in compliance with the principle of proportionality.
Strengthening BEREC's ability to contribute to the smooth functioning of the digital internal market
As regards the future governance of BEREC, ARCEP believes that a structure that can guarantee both that the consideration of local circumstances and the independence of NRAs should be maintained. These are the cornerstones of European electronic communications regulation. The work of coordinating regulation at the European level must continue to be rooted in NRAs' expertise and practices. Their expertise and participation in BEREC's work have indeed enabled the Body to make a useful contribution, through its analyses, reports, positions and opinions, to the proper application of the regulatory framework, and the establishment of the electronic communications internal market.
In the future, BEREC's involvement could extend to the analysis of problems and possible solutions that should precede the European Commission's legislative initiatives. BEREC could also be able to contribute to defining the tools that will enable better spectrum management, as well as to drafting and implementing the European regulation regarding some digital services. BEREC may need to be given greater means of action in order to ensure that the accomplishment of the future framework's objectives.
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