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Summary

On September 14, 2016, the European Commission (EC) published detailed proposals to reform the EU's telecoms rules. One of the major elements of the package is a new Electronic Communications Code (ECC). This is the EC's attempt to show that the rules apply not only to the legacy telcos, but also to new and emerging players such as Facebook and WhatsApp when providing similar or identical services.

If implemented, the proposals could mark the biggest change to the European regulatory environment since 2002

The new ECC consolidates and amends the four existing telecoms Directives to create a new regulatory framework. The four existing Directives are Framework, Authorization, Access, and Universal Service. They form the current basis for regulating the sector. The overriding aim of the reform is to stimulate and encourage investment in ultrafast broadband infrastructure. This has mostly been achieved by relaxing some of the now largely outdated rules faced by telcos. These changes include

  • increasing the frequency of market reviews from once every three years to once every five years

  • allowing greater wholesale pricing flexibility for SMP operators to encourage the rollout of ultrafast broadband

  • revising the universal service obligation so that it will no longer demand provision of public payphones, phonebooks, or directory enquiry services, and so that funding will come from the general budget and not from the sector.

One of the most anticipated aspects of the reform relates to the treatment of OTT players. The new ECC proposes that players who provide equivalent communications services to those provided by traditional telecoms operators are covered by similar rules. Communications services that rely on numbers for end users to communicate are considered to be very similar to traditional telephony and SMS services. For these services, players must provide contractual information to their customers, and will become subject to switching and emergency call rules. For communication services that don't rely on numbers, they must still ensure that their servers and networks are secure and can be used by disabled users and that there is the possibility to reach emergency services.

Of course, today is just the beginning. Three years ago, the EC undertook a similar exercise that was significantly watered down as it made its way through the legislative process. All that remains of that package is the EU-wide net neutrality regulation and the plans to eliminate roaming premiums from June 2017, the details of which still haven't been finalized.

Appendix

Author

Matthew Howett, Practice Leader, Regulation

matthew.howett@ovum.com

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