Opinion Articles

Friday, September 13, 2013

EC's Neelie Kroes says ‘we must act now’ to change European telecoms rules

Mark Bridge writes:

Following Wednesday’s ‘State of the Union’ speech by EC President Jose Manuel Barroso, EC Vice-President Neelie Kroes has emphasised the urgency of changing the way telecoms companies operate across Europe.

Ms Kroes wants to cut red tape, end roaming charges, reduce call costs and introduce ‘net neutrality’ across Europe.

At a press conference yesterday she said that delaying these changes would hurt consumers and would also adversely affect the economy.

Full details of her speech are below.

We must act now – time for a Connected Continent

Good afternoon everyone

Unless you have been living in a cave with no mobile reception, you and I are aware that the European telecoms sector is facing some major problems, but also some major opportunities.

That is partly of their own making, and partly why the Commission is presenting this legal package today.

But I want to end three illusions before we get into questions.

Firstly, I want to end the illusion that this is about one issue – roaming. It is not. This proposal is a package and it is all connected. The various parts rely on and reinforce each other.

Secondly, I want to end the illusion that this is about one sector – telecoms. It is not. It is about how digital technology can boost all economic sectors if we take advantage of the single market and push pointless obstacles out of the way.

Thirdly, I want to end the illusion that we could tackle our problems better if we waited. The sector and the economy don’t have time for that.

Of course there are no easy or complete answers. But we cannot wait for a perfect package that will never arrive. Failing to implement this package would mean a delay of 2 or 2 and a half years.

If that happens - the global race is lost. And important rights will remain a dream or a lottery instead of a real right.

Make no mistake: this package is the single biggest thing the European institutions could finalise in 2014 to boost growth and jobs.

Take the app economy for example. Those apps on your smartphones and tablets did not exist 5 years ago. They are predicted to grow from 11 billion euros today, to 15 billion in 2016. Today those apps support 794,000 jobs in Europe alone. Nearly half of them high-skill, high-pay software developer jobs.

This is what we need more of. And it is what we will throw away - if we don’t provide the networks and certainty small companies in the app sector need.

Let me emphasise two political points before moving to the details of the package.

1. The unity of the College of Commissioners on this matter. There is overwhelming support for this package, including for the net neutrality element and we worked very hard to win that support.

2. This package builds on the 2009 telecoms package. It was the right package at the time, and an important step forward for these markets. But the digital world has completely changed since 2009. That is largely thanks to big data. And our competitors have changed too.

If you combine Japan, South Korea and the USA it is the same population as Europe. But they have over 8 times more fixed fibre broadband, and almost 15 times more 4G. And the gap is growing. Europe will lose if we don’t also change.

This is not just an economic question. It is a strategic question and a social question too. Let me explain. Throw your mind back to all the debates about PRISM and other surveillance issues.

Europe’s strategic interest is served by having its own capacity to deliver secure cloud computing services to citizens and businesses. Europe should not be at the mercy of cloud computing providers outside of Europe. Here is our chance to have a global European cloud player. Therefore we need our high quality networks, which in turn can only be provided by a healthy telecoms sector.

We also need to retain significant telecoms equipment production capacity. Every day we don’t roll out new services like 4G mobile, we hurt our equipment manufacturers like Ericsson and Nokia Siemens Networks. They need a home market to sell to, and it should be the largest market in the world. That is the whole point of a European single market.

So you can see that we need a comprehensive package for a range of very good reason. Not least of which is the need to end the telecoms lottery that consumers face today.

I want to say loud and clear: you should not have different rights, different rules, different prices everywhere you go in Europe.

We can’t fix that overnight – but we agree it’s wrong and make surgical interventions to address to the worst of the problems.

So what exactly are we proposing:

1. We are very committed to cutting red tape: making it easier for companies to invest in new networks and new services; to be able to expand across borders. You should not accept complaints that this package is bad for companies. It absolutely is not. They would get a single authorization, quicker and easier access to spectrum, regulation of fewer markets, stable copper prices, one set of consumer rules to follow, a cheaper way for them to get rid of roaming premiums. It is a long list and a good one.

2. We have a bunch of new benefits and rights for users:

a. There is of course our determination to push roaming out of the market, starting in 2014.

We need to end roaming, not just reduce the price. The cost of providing data will get cheaper faster than regulation can keep up – price reductions will become a losing game.

b. So the first new step is to ban incoming call charges from 2014

The Second new step is to offer companies a cheaper way to deliver EU-wide "Roam Like At Home" plans. If they do this from 2014, they enjoy lighter European regulation

If your operator does not offer "Roam Like At Home" – you the consumer can take control. You can choose a domestic price plan from the country you travel to when you get there. You don’t need a new number or second bill. It will be possible from your phone.

In other words: one way or the other, customers will be able to escape these high charges.

We will also make calls cheaper from within your home country. Each time you use either your fixed landline or your mobile to call abroad, it should not cost you more than to call within your country. This means that every phone user is a winner from this package.

You will have other consumer rights, like simpler ways to change contracts and the right to clearer information in those contracts. But the most important new right will be your right to the open internet.

We are fighting on the same side – to keep the internet open.

We propose to introduce net neutrality to Europe – ending the blocking and throttling and degrading of services - so that you always enjoy the full internet no matter what internet subscription you have.

We want all Europeans to have guaranteed right to full and open internet – something 96% of Europeans lack today. Blocking and throttling are widespread across the EU, 200 Million subscribers are affected.

Of course, every network and consumer is different. So you can still choose your internet speed.

But this is not a two-tier internet. Internet access will mean the full, unrestricted Internet, with guaranteed speed and quality for all. Companies are not allowed to discriminate against you and your choices.

If they want to provide a faster service or a guaranteed quality to someone who needs it – like a company using high resolution medical imaging or videoconferencing, or a person wanting high definition video on demand – they can. But not by taking away from the other customers.

Consumers must get the package they pay for. They would have the right to check if they are receiving the internet speeds they pay for, and to walk away from their contract if those commitments are not met

This new right ensures that both parts of our net neutrality proposal work in practice – good for consumers and open too for entrepreneurs.

Let me sum all this up:

Current trends are unsustainable for the sector, and unsustainable for our whole economy. Without the infrastructure to compete, we aren't going anywhere – in any sector.

We hurt consumers, we hurt the economy, we hurt our strategic future if we do not act.

This is no longer about little fights on individual issues. The point is the big picture, and the fact that we are all connected.

So this package is essential for Europe’s strategic interests, economic progress, for the telecoms sector itself, and for citizens who need full and fair access to telecoms services such as internet and mobile services.

Thank you.

Neelie Kroes

Vice-President of the European Commission responsible for the Digital Agenda

Author: The Fonecast
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