Digital maybe, but not single, and not a market

In this excerpt from TMN's weekly newsletter, Editor Keith Dyer points out that the EC's "victory" on roaming is barely that, and comes at a cost.

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The EC finally thrashed out an agreement on the telecoms rules for its Digital Single Market agenda with representatives of the European Parliament and national governments. The big headline, that you would have been hard put to miss on Monday [June 29], is that roaming premiums within the EU will be gone by 2017.

This was hailed as a big triumph by those now tasked with seeing through reforms that were first tabled as many as two Directors (Kroes, Reding) ago. No doubt, beating the mobile operators and some national governments down over a prolonged period is a victory of sorts – it’s worth remembering that the roaming premium before Reding and Kroes got involved was basically indefensible.

However, over a prolonged period of time it’s almost certain we would have seen a great dent put in roaming premiums in any case driven by a) competition as operators eat each others’ lunch abroad faced with empty plates at home and b) much more WiFi everywhere enabling the increasing dominance of voice and SMS apps. Certainly roaming would still be at a premium in 2017 without the intervention of the EC but it is a matter of opinion just by how much.

Let’s also not lose sight of the fact that the EC has essentially dropped the Single Market element of its roaming proposals to gain its big win of eliminating roaming fees. How is that?

Well, since July last year operators have been mandated to support access to their systems for so-called Alternative Roaming Providers – the proposed entities that would be able to provide competitive roaming tariffs to “home” operators. Where are the ARPs? They are nowhere, because eliminating the roaming premium also pretty much eliminates a business case for an ARP. The only way an ARP could compete with your normal contract provider would be if it was offering cheaper deals. But that would be very hard to make profitable in the wholesale market – essentially providing services cheaper than the operators (with Group deals and swaps to leverage) could cost them at. These ARPs were supposed to act across the Single Market, operating supra-nationally. Well, there aren’t any so that element has gone.


Another blow to Single Market triumphalism is the decision to ban permanent roaming. As a reminder, this is the scenario where consumers from more expensive markets get hold of a SIM from a cheaper, foreign, country and then use it all the time. Naturally the telcos weren’t too keen on giving consumers access to this sort of arbitrage, and so usage caps will be applied to people deemed to be roaming outside their normal country of residence. So the rules will support different tiers within the supposed Single Market. In case you think the prospect of permanent roaming was never real, remember that certain voices within the EC were not above wondering out loud why it was consumers in Latvia should pay so much less than German customers. Levelling down within a Single Market was supposed to be a real possibility.

Also hailed was a win for agreement on net neutrality, although here many of the big decisions were in fact parked for further study. Not least amongst these was how far certain exemptions would stretch. There would be guaranteed fast lanes, but we mustn’t call them fast lanes, for certain applications that demand better performance. These fast lanes must not impinge on “open” internet access for all other services and applications. How is that going to work in a physical contended, network? Unless there is unlimited access, if you partition the network off to guarantee certain service levels for certain services, you must by definition be acting in a discriminatory manner. I’m not argiung the right or wrongs of doing so – just for some honesty instead of fudge.
In one other case, the application at the network level of content filters and controls has been subordinated to existing national provisions – so content providers, operators and the service providers themselves still have different rules to abide by.

The EC claimed that its rules would “avoid fragmentation in the single market, creating legal certainty for businesses and making it easier for them to work across borders”.

So, can outside players operate “digitally” (whatever that means) in a common way across Europe? No, they can not. They are required to subjugate themselves still to national demands and priorities. Can consumers buy a SIM card from any country and use it however they would like across the EU? No, they can not. They must subject themselves to limits when roaming from their “home” country, otherwise is is deemed unfair and “abusive”. Can mobile operators and other service providers deploy common services in a common manner across the market area? No they cannot, they face national exemptions in certain areas, and in fact face certain apps and services being guaranteed faster access. Can Internet service companies be sure if and how services they provide will be treated the same or differently to those from telcos? Not yet.

If you want to see how last minute some of this decision making was – read this story, which reveals a clause being inserted and then removed from the official supporting documentation following the agreement on new telecoms rules.

Meanwhile the Politicians, and a special welcome here to the  under-powered Gunther H. Oettinger, waffle on about innovation and single markets and the like, hiding behind a badly delivered, delayed and watered down roaming plan as evidence of their effectiveness. To judge by the headlines this week they are fooling too many.