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      Telecoms businesses

       

      Current state of play

      Telecoms regulatory framework

      The current EU regulatory framework is a package of five directives and two regulations which has the following aims:

      • promotion of competition in the telecoms sector by regulating access and fees for certain landline and mobile infrastructure - in this regard the Commission has the power to veto certain measures proposed by national regulators;
      • reduction of costs for deploying high-speed electronic communications networks and investments in broadband networks supporting high-speed internet and regulation of the use of wireless technologies, such as 3G and LTE;
      • consumer protection, in particular with regard to end-user contracts and transparency; and
      • harmonisation and abolition of roaming charges within the EU by 2017.

      'Connected Continent' legislative package

      Pursuing the goal of a European 'Digital Single Market', the Commission has proposed legislative changes to the existing telecoms regulatory framework which, amongst others, include: 

      • new criteria for regulating telecoms markets so that national regulators would have to consider competitive issues arising from 'over the top' players (ie companies that enable people to make voice calls and send messages over the internet); and
      • a harmonised set of rules on net neutrality in order to prohibit discriminatory blocking and throttling of network traffic - only certain content providers (so-called specialised services which rely on higher network performance) will, under certain circumstances, be able to agree deals with internet providers to assure a certain quality of service and thus obtain premium network access. Currently, there is a mixed bag of domestic net neutrality regulation in the EU. Member state approaches range from strict rules on net neutrality (eg the Netherlands) to compromise solutions (eg France) to no regulation on net neutrality at all (eg Germany). The UK regulator, Ofcom, pursues a self-regulatory approach and recognises that innovative internet-based services may require priority network access.

      Broadband strategy 

      • The Commission recently released the 'Investment Plan for Europe', a package of measures to unlock public and private investments of at least EUR 315 billion over the next three years (2015-2017) with a strong focus on digital infrastructures, notably broadband. 

       

      What should I be thinking about now?

      Telecoms regulatory framework 

      Would Ofcom have more leverage when it comes to access and fee regulation, being unconstrained by Commission veto rights?

      Roaming

      Would the UK be able to deviate from the EU roaming regime and introduce roaming charges? Conversely, would EU member states have greater freedom to allow roaming charges to be imposed as regards UK customers?

      Net neutrality

      Following a Brexit, it might be possible for content providers in the UK to negotiate a broader range of arrangements with internet providers regarding paid priority access, whereas the same business models might be under closer scrutiny in some member states, in particular once the envisaged harmonised EU rules on net neutrality take effect.

      Infrastructure

      As regards the EU broadband strategy, UK firms may not have access to the new EU fund for financing high-speed broadband roll-outs or other digital networks.

       

      What could the position be following a Brexit?

      The answers to many of the above questions would depend on the nature of a post-Brexit UK/EU relationship.

      To give an idea of the range of possible outcomes we have considered what the position would be under the ‘Norwegian option’ and the ‘World Trade Organisation (WTO) option’ – on the basis that these are at opposite ends of the spectrum of existing models for an alternative relationship with the EU.

      What if the UK leaves the EU but joins the European Free Trade Association and remains part of the European Economic Area (EEA)? (the Norwegian option)

      The four freedoms as laid down in the Treaty on the Functioning of the European Union (ie the free movement of goods, services, persons and capital, as well as competition and state aid rules) are incorporated in the EEA Agreement. This means that the telecoms directives are applicable throughout the EEA. Hence, nothing would change since the UK would still have to comply with this directive.

      What if the UK left the EU without any form of free trade agreement? (the WTO option)

      The UK would be free to revise its telecoms regulatory framework and deviate from EU standards.