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EU telecoms agreement reached amidst industry criticism

A new European Electronic Communications Code has been provisionally agreed on by EU law makers amidst heavy industry criticism.07 Jun 2018

The European Parliament announced on Wednesday that it had reached a "provisional deal" with the Council of Ministers on Tuesday night on the new Code, originally proposed by the European Commission in 2016.

The Code is aimed at supporting the development of new electronic communication networks.

The Commission has said that, by 2025, it wants all schools, transport hubs and main providers of public services as well as digitally intensive businesses to have access to internet connections with download/upload speeds of 1 Gigabit of data per second. By the same deadline, it said it also wants all EU households to have access to networks offering a download speed of at least 100 Mbps, and for those networks to be capable of being upgraded to 1 Gigabit.

In addition, the Commission envisages uninterrupted 5G wireless broadband coverage in all urban areas and on major roads and railways by 2025, with a least one such service in place in at least one major city in each EU country by 2020.

To underpin those ambitions, the European Electronic Communications Code sets out rules on the allocation of spectrum, as well as the deployment of new telecoms infrastructure and the sharing of infrastructure by multiple network operators.

A number of regulatory requirements are also contained in the proposed new Code, including in relation to the security of telecoms networks and the disclosure of information about tariffs and rights to refunds and compensation.

The proposed Code would also place a cap on the cost of intra-EU phone calls and text messages – at 19 cents and 6 cents respectively.

The political agreement on the Code was welcomed by Mariya Gabriel, EU commissioner for the digital economy and society, who said agreement had been reached on "bold and balanced rules to provide faster access to radio spectrum, better services and more protection for consumers, as well as greater investment in very high speed networks".

However, the European Telecommunications Network Operators' Association (ETNO) described the new Code as a opportunity missed "to simplify and improve the EU rules for the sector in the interest of European citizens and businesses".

ETNO said: "The agreed law foresees only limited progress on spectrum policy, a complex and watered down compromise on incentivising fibre investment, uncertain triggers for imposing regulatory remedies and no fair playing field for digital services users and providers. What is more, the unfortunate decision to regulate intra-EU calls only offers a political smokescreen for lack of significant progress in the other parts of the Code."

"The legal threshold for regulating retail prices in competitive markets has been significantly lowered. This type of unjustified price regulation sets a highly dangerous precedent for all other European industries hence creating legal uncertainty, while offering no tangible consumer benefit that can offset the lack of simplified and future-proof rules across the board," it said.

GSMA, which represents mobile network operators, described the Code as "a political compromise that fails to confront long term challenges for the European telecommunication sector", and raised concern that it "could hinder deployment of 5G networks in Europe". It cast doubt on whether the Code contains the regulatory reform required to encourage industry investment in new electronic communication networks.