Documents considered by the Committee on 27 October 2010 - European Scrutiny Committee Contents

4 Radio Spectrum Policy

(31965) 13872/10 + ADDs 1-2 COM(10) 471

Proposed Council Decision establishing the first Radio Spectrum Policy Programme

Legal base	Article 114 TFEU; QMV; ordinary legislative procedure
Document originated	20 September 2010
Document deposited	27 September 2010
Department	Business, Innovation and Skills
Basis of consideration	EM of 14 October 2010
Previous Committee Report	None; but see (31638) 9981/10: HC 428-i (2010-11), chapter 28 (8 September 2010) and (31645)10245/10: HC 428-i (2010-11), chapter 29 (8 September 2010)
To be discussed in Council	2 December 2010 Telecoms Council
Committee's assessment	Politically important
Committee's decision	Not cleared; further information requested

Background

4.1 The EU regulatory framework agreed in 2002 consisted of the:

—  Framework Directive setting out the main principles, objectives and procedures for an EU regulatory policy regarding the provision of electronic communications services and networks.

—  Access and Interconnection Directive stipulating procedures and principles for imposing pro-competitive obligations regarding access to and interconnection of networks on operators with significant market power.

—  Authorisation Directive introducing a system of general authorisation, instead of individual or class licences, to facilitate entry in the market and reduce administrative burdens on operators.

—  Universal Service Directive requiring a minimum level of availability and affordability of basic electronic communications services and guaranteeing a set of basic rights for users and consumers of electronic communications services.

—  Privacy and Electronic Communications Directive setting out rules for the protection of privacy and of personal data processed in relation to communications over public communication networks.

4.2 In addition, the Radio Spectrum Decision established principles and procedures for the development and implementation of an internal and external EU radio spectrum policy.

4.3 The Framework also established a number of committees and policy groups to manage and implement the new system:

—  Communications Committee: which advises on implementation issues;

—  European Regulators Group: to facilitate consistent application of the regime;

—  Radio Spectrum Policy Group: to enable Member States, the Commission and stakeholders to coordinate the use of radio spectrum;

—  Radio Spectrum Committee: to deal with technical issues around harmonisation of radio frequency allocation across Europe.

4.4 In this fast-developing sector, it was decided in 2007 that the regulatory framework needed to be revised, with a view to ensuring that it continued to serve the best interests of consumers and industry in today's marketplace. An agreement on the EU Telecoms Reform was reached by the European Parliament and Council of Ministers on 4 November 2009, after two years of discussion during the legislative process. It consists of:

—   the "Better Regulation" Directive;[28]

—  the "Citizens' Rights Directive;[29] and

—  the Regulation establishing the BEREC and the Office.[30]

4.5 BEREC (Body of European Regulators of Electronic Communications) replaced the European Regulators Group.[31]

4.6 The new rules now need to be transposed into national laws of the 27 Member States by May 2011. The main elements of the reform package are at Annex 1 of this chapter of our Report.

The Commission Communication

4.7 On 8 September we considered the Commission's over-arching Communication, "A Digital Agenda for Europe", which focuses on seven priority areas, and foresees some 100 follow-up actions, of which 31 would be legislative. The seven areas are:

—  creating a digital Single Market;

—  greater interoperability;

—  boosting internet trust and security;

—  much faster internet access;

—  more investment in research and development;

—  enhancing digital literacy skills and inclusion; and

—  applying information and communications technologies to address challenges facing society like climate change and the ageing population.

4.8 In his analysis of this Communication, the Minister for Culture, Communications and Creative Industries Department for Business, Innovation and Skills/Department for Culture, Media and Sport (Ed Vaizey) said that the Commission had itself noted "the ambitious UK Government involvement in the telecoms area through provisions of what has since become the Digital Economy Act (2010) with far-reaching proposals concerning modernisation of spectrum, a commitment to ensure universal broadband availability and promotion of next generation networks (NGN)."[32] He also noted that almost all National Regulatory Authorities (NRAs = Ofcom in the UK) had imposed regulatory measures following their analyses of broadband markets covering wholesale (physical) network infrastructure access at a fixed location (market 4/2007);[33] and wholesale broadband access (market 5/2007). He further noted that.

"On spectrum management, the Commission notes the need for coordinated action to open up the digital dividend spectrum to different services across Europe, creating an opportunity particularly for wireless broadband network operators to gain valuable radio spectrum."

The Council Decision

4.9 This proposal for a Council Decision establishing the first Radio Spectrum Policy Programme (RSPP) is part of the Commission's "Broadband Package" for the roll-out of broadband and fast- and ultra-fast networks in the EU. The other constituent parts, which we consider elsewhere in this Report, are:

• a Commission Communication: European Broadband: investing in digitally driven growth; and
• a Commission Recommendation on Regulated Access to Next Generation Access (NGA) Networks.[34]

4.10 The Commission begins by recalling that Article 8a (3) of Framework Directive 2002/21/EC as amended by Directive 2009/140/EC invites the Commission to present a legislative proposal to the European Parliament and Council to establish a multiannual Radio Spectrum Policy Programme (RSPP) setting out policy orientations and objectives for the strategic planning and harmonisation of the use of spectrum, "taking utmost account of the opinion of the Radio Spectrum Policy Group (RSPG)."

4.11 The RSPP is based on Article 114 TFEU, "given the importance of the availability and efficient use of spectrum for the establishment of an internal market for electronic communications and for other EU policy areas." The RSPP will determine until 2015 how spectrum use can contribute to EU objectives and optimise social, economic and environmental benefits. It builds on EU regulatory principles for electronic communications and on the Radio Spectrum Decision No 676/2002/EC (the RSD), reaffirms principles to be applied to all types of spectrum use, establishes objectives for EU initiatives and lists actions to be launched.

4.12 The Commission notes that spectrum is "essential for the digital society, fast wireless services, economic recovery, growth, high-quality jobs and long-term EU competitiveness", and that spectrum policy initiatives "are also key to the Digital Agenda for Europe and to the Europe 2020 strategy for smart, sustainable and inclusive growth."

4.13 The Commission also notes that inputs for the RSPP came from the Spectrum Summit hosted by Parliament and the Commission, a Commission public consultation and the RSPG.

4.14 The proposal is accompanied by a 77-page impact assessment and an eight page impact assessment summary. In brief, the Commission says that the advantage of EU action lies in the fact that radio transmissions do not stop at borders and incoherence between national approaches can hamper spectrum usage. It argues that insufficient coordination may have other negative effects, e.g.:

—  fragment the internal market, preventing economies of scale, thereby increasing costs;

—  cross-border interference preventing most efficient spectrum use by all Member States;

—  less effective international spectrum coordination outside EU as there is no 'common voice';

—  missed opportunities for boosting innovation at European level and possible delay in strategic investments.

4.15 The Commission says that the first RSPP will outline how spectrum use can contribute to main EU political objectives until 2015 and will generally envisage how to enhance social, economic and environmental benefits of spectrum access. The following objectives are identified:

—  support, through spectrum policy, the wireless broadband objectives set in the EU2020 Strategy and the Digital Agenda for Europe;

—  promote spectrum use efficiency in EU policies, in particular by fostering flexibility and competition;

—  promote innovation at European level;

—  address weaknesses in spectrum management in EU competence areas;

—  support objectives for combating climate change and promoting energy efficiency as set in the EU2020 Strategy and the Digital Agenda for Europe;

—  protect European policy interests in international arenas and support Member States in dealing with third countries;

—  contribute to promoting the internal market in equipment, services and networks.

4.16 The Commission says that policy options were selected based on the potential added value of further EU harmonisation and coordination and based on the type of measures that could increase spectrum efficiency and bring economic, social and environmental benefits. It also says that public consultations and the spectrum summit demonstrated that key issues often extend beyond electronic communications across several sectoral interests; that spectrum sharing opportunities can be expanded by considering all users while respecting national competences; and that stakeholders clearly called for the widest possible scope.

4.17 The 26 paragraphs in the Recitals to the text of the legislative proposal set out the policy points that underlie the text of the legislative proposals, including:

—  a multi-annual radio spectrum plan for the purposes of the establishment functioning of the internal market is called for by Article 8(a) of the Framework Directive (2002/21/EC);

—  the RSPP is subject to the Co-Decision process involving both the Council and the European Parliament;

—  Article 114 of the Treaty TFEU is the appropriate treaty base in that the efficient functioning and availability of spectrum is necessary for establishment and functioning of the single market, not only in communications but in a wide range of other EU policy areas;

—  strategic planning and harmonisation of spectrum would enhance the single market for wireless communications, create new opportunities for innovation, and contribute towards promoting "smart, sustainable and inclusive growth" ensuring universal broadband coverage of speeds of at least 30 Mbps for all Europeans by 2020;[35]

—  the programme, if agreed, will be in effect until 2015;

—  recognition that spectrum management will remain largely a competence of Member States;

—  also that such management should be in accordance with EU law, as well as allowing actions in order to pursue EU policies, noting also that the programme should rely on Decision 676/2002/EC, [36] as well as the technical expertise of the European Conference of Postal and Telecommunication Administrations (CEPT) in order that any policies covering spectrum which have been agreed by Council and the European Parliament can be enacted by technical implementing measures;

—  optimum use of spectrum may require new and innovative authorisation solutions, including collective use of spectrum and infrastructure sharing;

—  the contribution that the combination of flexible spectrum usage and spectrum rights trading will make towards economic growth, together with mechanisms to prevent spectrum "hoarding" in order to create a dominant market position;

—  Member States should take ex ante or ex post actions in order to ensure distortions in the market place do not occur, thus preventing innovative new services or applications from being made available;

—  for spectrum to be managed in the most efficient manner, there should be an inventory of spectrum, in particular between 300 MHz and 3 GHz;

—  the view that radio equipment standardisation is essential to efficient spectrum use and that this should follow principles laid down in Directive 1999/5/EC,[37] commonly known as the RTTE directive, to take account of the increased risk of interference that comes with ever greater use of wireless technologies and manage these risks appropriately;

—  that the 800MHz spectrum should be, in principle, be made available for electronic communications in the EU by 2013;

—  that spectrum requirements exist outside of the electronic communications sector, with key examples being: transport safety, e-Health, R&D and public protection;

—  the International Dimension: that spectrum management often transcends national borders, that Member States be mindful of the requirement that they should not enter into international agreements that prevent them from fulfilling any of their EU obligations and that the EU should prepare negotiations and multilateral agreements, including the International Telecommunications Union (ITU) in accordance with the appropriate powers afforded to the EU under EU law; and where multilateral negotiations impact on principles and policies within a wider EU context, the EU should be able to enact new procedures to defend its interests in multilateral negotiations; in order to achieve this, the Commission, when taking into account the opinion of the Radio Spectrum Policy Group (RSPG), may propose common policy objectives to the European Parliament and Council.

TEXT OF THE LEGISLATIVE PROPOSAL

4.18 In his detailed and helpful Explanatory Memorandum of 14 October 2010, the Minister for Culture, Communications and Creative Industries Department for Business, Innovation and Skills/Department for Culture, Media and Sport (Ed Vaizey) summarises the text as follows:

Article 1 — Aim & Scope

"This article defines that the aim of the RSPP is to define a radio spectrum programme for the strategic planning and harmonisation of the use of spectrum in line with EU legislation and sets out the relevant directives, namely:

• Directive 1999/5/EC of the European Parliament and of the Council of 9 March 1999 on radio equipment and telecommunications terminal equipment and the mutual recognition of their conformity;
• Directive 2002/20/EC of the European Parliament and of the Council of 7 march 2002 on the authorisation of electronic communications networks and services;
• Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services;
• Directive 2009/140/EC of the European Parliament and of the Council of 25 November 2009 amending Directives 2002/21/EC on a common regulatory framework for electronic communications networks and services, 2002/19/EC on access to, and interconnection of, electronic communications networks and associated facilities, and 2002/20/EC on the authorisation of electronic communications networks and services; and
• Decision No 676/2002/EC of the European Parliament and of the Council of 7 March 2002 on a regulatory framework for radio spectrum policy in the European Community (Radio Spectrum Decision)."

Article 2 — Application of General Regulatory Principles

"This article lays out the regulatory principles that contribute towards a consistent spectrum management mechanism. They are:

• to encourage efficient use of spectrum to meet increasing demand;
• promote a service- and technology-neutral approach, in order to promote flexibility and encourage innovation;
• apply a least onerous authorisation system; and
• ensure effective competition and thus guarantee the functioning of the internal market."

Article 3 — Policy Objectives

"Building on the principles in Article 2, this article sets out the policy objectives of the RSPP. They are:

• To make sufficient spectrum available in a timely manner to support EU policy objectives;
• Maximise flexibility, in order to promote innovation & investment;
• A service- & technological-neutral approach;
• Allow the possibility of spectrum trading;
• Allow general authorisations;
• Maintain and develop effective competition through effective regulation where needed;
• Reduce fragmentation of the internal market by enhancing coordination and harmonisation of technical requirements;
• Facilitate the creation of standards that allow for flexible and efficient use of spectrum;
• Manage and avoid harmful interference; and
• Have due regard to the harmful effect of electromagnetic field emissions on human health."

Article 4 — Enhance Efficiency and Flexibility

"This article then builds upon the regulatory principles and policy objectives in Articles 1 to 3. They are:

• Adopt authorisation and allocation measures appropriate for the development of broadband services;
• Foster the collective and shared use of spectrum;
• Cooperate to develop and harmonise standards;
• Ensure selection conditions and procedures that promote investment and efficient use of spectrum;
• Develop guidelines on authorisation and procedures in order to avoid fragmentation of the internal market for that spectrum that can be traded; and
• Take appropriate measures to avoid spectrum hoarding, including financial penalties or withdrawal of rights."

Article 5 — Competition

"This article deals with actions that should promote competition, as well as those that could be used to avoid undue distortions. They are:

• A limit on the amount of spectrum that can be used by any economic operator;
• Ability to refuse to grant new usage rights in certain bands that could lead to excessive concentrations and thus stifle competition;
• Either a prohibition or the imposition of further conditions on certain transactions whose result would impede competition;
• A possible amendment of existing rights to remedy, ex post, excessive concentrations of spectrum holdings that would impede competition; and
• Authorisation procedures that avoid delays and promote competition."

Article 6 — Spectrum for Wireless Broadband Communications

"This article covers actions that would contribute towards the objectives of the Digital Agenda for Europe and develop wireless broadband communication. They are:

• Ensure sufficient spectrum is allocated in order to achieve the Digital Agenda's targets of all citizens having wireless broadband of at least 2Mbps by 2015, and at least 30Mbps by 2020;
• Authorise the use of spectrum covered by a number of Commission Decisions (2.5 to 2.69 GHz, 3.4 to 3.8 GHz and 900/1800 MHz) by January 2012;
• Make available the 800MHz band by January 2012;
• Ensure that actions covering the 800 MHz band does not have a negative impact on Programme Making and Special Events (PMSE) users;
• Adopt, without delay, the legislative basis that would allow spectrum trading;
• Consider the spectrum that would be required to support satellite-based services that would provide broadband for the most remote areas of Europe."

Article 7 — Spectrum Needs for Specific EU Policies

"This article covers actions that would contribute to best meet the spectrum requirements to support specific EU policies. They are:

• Ensure sufficient spectrum for scientific monitoring of the environment and space applications, such as GALILEO and GMES;
• Study and consider authorisation schemes that contribute to low-carbon policies eg smart grids and metering systems;
• Ensure sufficient spectrum for the development of safety services and allow the development of innovative interoperable public protection and disaster relief services; and
• Review the spectrum requirements for scientific research in areas that would have a major socio-economic impacts.

Article 8 — Inventory and Monitoring of Existing Uses of and Emerging Needs for Spectrum

"This article sets out the proposal for a pan-EU inventory, particularly in the 300 MHz to 3 GHz range. The aim is to ensure that spectrum is being used in the most effective & efficient manner."

Article 9 — International Negotiations

"This article sets out the principles behind how the EU should approach international negotiations regarding spectrum (in line with EU law covering internal and external competencies). It particular it covers the following matters:

• The International Telecommunications Union (ITU) (where the Presidency should coordinate & lead);
• The World Radio Communications Conference (2012);
• Where Member States and the EU share competence;
• The provision of technical and political support by the EU for Member States;
• A requirement for Member States to have due regard to their EU obligations when negotiating spectrum issues with non-EU states."

Article 10 — Cooperation Among Various Bodies

"This Article addresses how the relevant European institutions who are stakeholders in spectrum management should cooperate in order to address political and technical issues."

Article 11 — Public Consultation

"This Article instructs Member States to hold public consultations involving all stakeholders whenever appropriate."

Article 12 — Reporting

"This Article lays down the requirement for the Commission to review and report on the RSPP to both Council and the European Parliament by 2015."

Article 13 — Implementation — Notification

"This Article spells out the requirement for Member States to report to the Commission on how the RSPP has been implemented."

Article 14 — Entry into Force & Article 15 — Addresses

"These two Articles cover when the RSPP comes into force (upon publication in the Official Journal of the European Union) and that it is addressed to Member States."

4.19 The Minister says that the Decision may have an impact on UK law, and require changes to the Communications Act 2003 and the Wireless Telegraphy Act 2006. In addition, the Decision may have an impact on Ofcom as the sectoral regulator in the UK. As such, he notes that an Impact Assessment is required and says that it "will be sent in due course."

4.20 On the question of Subsidiarity, the Minister says that the proposal concerns an area in which the EU has already exercised its competence, that the proposal therefore complies with subsidiarity principle as set out in Article 5 of the Treaty on the European Union, and that the stated aim of the proposal is that there will be greater consistency in regulation across Europe.

4.21 The Minister also notes that, though the proposals are a reserved matter under UK's devolution settlements, the devolved administrations have an interest and have been consulted in the preparation of his Explanatory Memorandum.

The Government's view

4.22 The Minister welcomes the recognition that the Commission is giving to the importance of spectrum for economic growth in Europe and the need for a market-based approach to its allocation, and also the reaffirmation of the guiding principles of service- and technology-neutrality in the proposal for a Radio Spectrum Policy Programme. He continues as follows:

"Policy Objectives

"Article 3 covers the overall policy objectives which we would generally endorse. Of note, it includes measures to prevent and remedy excessive accumulation of spectrum rights. This featured in the recent Telecommunications Framework review and is legitimately an issue of concern to the Commission. Ofcom, as the UK's National Regulatory Authority (NRA) already has competition powers.

"However, defining what 'anti-competitive hoarding' means is not as straightforward. One issue is how to prevent actions such as businesses buying spectrum when it becomes available in order to secure it for later use being misinterpreted as 'hoarding'. This is an issue when you take into account that business cycles and spectrum availability don't always align.

"Authorisation

"Article 4 includes developing 'guidelines on authorisation conditions and procedures for such bands, in particular on infrastructure sharing and coverage conditions'. Whilst guidelines themselves may not be a problem for the UK we need to monitor this as it might have implications for such issues as harmonised coverage conditions, duration of rights and spectrum block size.

"However, we would also seek to amend the text of Article 4 so that it does not make '10 MHz block sizes' (while making good sense for efficient use of spectrum, especially for Long-Term Evolution — LTE networks) mandatory in any sense.

"Competition

"Article 5 specifically covers issues relating to competition. It tasks Member States to ensure competition and avoid market distortions that would affect competition. It suggests measures that Member States may use, such as spectrum caps or refusing to allow spectrum use if the competition would be negatively affected.

"HMG welcomes the wording used which, whilst stating principles, allows for freedom of choice in order to use tools for implementation by each Member State without prescribing which should be used.

"However, we do have some concern that Article 5(3) puts an obligation on MS regarding authorisation and selection procedures which is rather prescriptive and are thus discussing and pushing for a somewhat less obligatory approach in the Council discussions.

"Specific Aims

"Article 6 contains some specific proposals to support an aim of wireless broadband contributing to a wider broadband aim of 30 Mbps for all citizens by 2020.

"The specific targets on making the 800 MHz band available for use by 1st January 2013 and the 2.6GHz band to be authorised by 1st January 2012 could be potentially problematic to the UK. We are aware, through discussions taking place at Telecommunication Council Working Party meetings, that these are shared by a number of other Member States and that a later date is likely to be agreed on.

"HMG has already made the Commission aware of potential interference issues with radars in bands adjacent to 2.6 GHz which could affect authorisation of spectrum and thus the timing for bringing such spectrum into use. This is a point recognised by Commission in the initial discussions on this proposal.

"We are also concerned with the proposed coverage obligations in Article 6 with respect to sparsely populated areas, which we believe should be a matter for each Member State; again it looks likely that a less prescriptive approach will be agreed.

"EU Policies

"Article 7 covers spectrum for specific EU policies such as the GALILEO navigation satellite and as such as it evolves in discussion, it has the potential to become a shopping list for spectrum.

"As such we think this Article is slightly at odds with the principles of service-neutrality re-iterated elsewhere in the RSPP; this being a point we are making in the Council.

"Inventory and needs

"Article 8 covers an inventory of spectrum use and future spectrum needs. This is another Article that needs to be monitored and whilst this potentially sounds beneficial, putting it into practice may prove challenging and the detail of this proposal will need to be extrapolated before assessing the potential benefits.

"EU International Role

"Article 9 considers the EU's role in international negotiations related to spectrum, principally at the ITU. The Commission states in Recital 20 that its long term objective is to become a member in the ITU in its own right (it currently only has observer status) and in the interim, the article suggests that the 'EU shall participate in international negotiations dealing with spectrum matters to defend its interests'. HMG accepts that there is an enhanced role of the EU with respect to negotiation on such issues as spectrum that have arisen since the Lisbon Treaty, but that in the context of the ITU it has to be the Presidency, in conjunction with the Commission, that coordinates any common position and represents any EU position in formal meetings.

"However, we remain concerned as to the specific mechanisms through which the EU would exert such coordination, within the context of the ITU, without a change to the ITU constitution and convention."

4.23 The Minister notes the various consultations that the Commission has carried leading up to the publication of this document , confirms that the UK (including Ofcom) has taken a full role during the consultation period and says that he intends this to continue during the negotiations that will now begin in the Council and then with the European Parliament. He does not expect agreement to be reached until late 2011 at the earliest and perhaps not for 18 months. In the immediate future, the RSPP proposals will be subject to Council Conclusions at the December Telecommunications Council. Once the RSPP is formally ratified, the Government will, the Minister says, again consult on how to implement in the UK.

Conclusion

4.24 We are grateful to the Minister for his very thorough and helpful Explanatory Memorandum about this highly technical and complex subject.

4.25 The Minister has illustrated those aspects of the proposals about which he has concerns, and which he will be addressing during the upcoming negotiations. We look to him to keep the Committee informed appropriately and in a timely fashion about any proposed revisions. In the first instance, we should be grateful to know what Conclusions are adopted, and his views on the extent to which they advance, or if appropriate undermine, UK interests.

4.26 Meanwhile, we shall retain the document under scrutiny.

Annex 1: Main elements of telecoms reform[38]

"The 12 most prominent reforms in the new package of rules for Europe's telecoms networks and services, as proposed by the European Commission in November 2007, and agreed between the negotiators of the European Parliament, the Council of Telecoms Ministers and the Commission on 5 November 2009 are:

1.  A right of European consumers to change, in 1 working day, fixed or mobile operator while keeping their old phone number. Currently in the EU it takes on average 8.5 days for a mobile number and 7.5 days for a fixed number to be changed, with some customers facing a two to three week wait. In the future, consumers will be able to do this in 1 working day. In addition, under the new rules, the maximum initial duration of a contract signed by a consumer with an operator will be no longer than 24 months. Operators must also offer consumers the possibility of agreeing to a contract with a maximum duration of 12 months.

2.  Better consumer information: Under the new telecoms rules, consumers will receive better information ensuring they understand what services they subscribe to and, in particular, what they can or cannot do with those communications services. Consumer contracts must specify, among other things, information on the minimum service quality levels, as well as on compensation and refunds if these levels are not met, subscriber's options to be listed in telephone directories and clear information on the qualifying criteria for promotional offers.

3.  Protecting citizens' rights relating to internet access by a new internet freedom provision: Following the strong request of the European Parliament, and after long negotiations on this point, the new telecoms rules, in a new Internet freedom provision, now explicitly state that any measures taken by Member States regarding access to or use of services and applications through telecoms networks must respect the fundamental rights and freedoms of citizens, as they are guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms and in general principles of EU law. Such measures must also be appropriate, proportionate and necessary within a democratic society. In particular, they must respect the presumption of innocence and the right to privacy. With regard to any measures of Member States taken on their Internet access (e.g. to fight child pornography or other illegal activities), citizens in the EU are entitled to a prior fair and impartial procedure, including the right to be heard, and they have a right to an effective and timely judicial review.

4.  New guarantees for an open and more 'neutral' net: The new telecoms rules will ensure that European consumers have an ever greater choice of competing broadband service providers. Internet service providers have powerful tools at their disposal that allow them to differentiate between the various data transmissions on the internet, such as voice or 'peer-to-peer' communication. Even though traffic management may allow premium high-quality services (such as IPTV) to develop and can help ensure secure communications, the same techniques may also be used to degrade the quality of other services to unacceptably low levels or to strengthen dominant positions on the market. That is why, under the new EU rules, national telecoms authorities will have the powers to set minimum quality levels for network transmission services so as to promote "net neutrality" and "net freedoms" for European citizens. In addition, thanks to new transparency requirements, consumers must be informed — before signing a contract — about the nature of the service to which they are subscribing, including traffic management techniques and their impact on service quality, as well as any other limitations (such as bandwidth caps or available connection speed).

The Commission also made a political commitment to keep the neutrality of the internet under close scrutiny and to use its existing powers as well as new instruments available under the reform package to report regularly on the state of play in net neutrality to the European Parliament and the Council of Ministers.

5.  Consumer protection against personal data breaches and spam: European citizens' privacy is a priority of the new telecoms rules. Names, email addresses and bank account information of the customers of telecoms and internet service providers, and especially the data about every phone call and internet session, need to be kept safe from accidentally or deliberately ending up in the wrong hands. Operators must respond to the responsibility that comes with processing and storing this information. Therefore, the new rules introduce mandatory notifications for personal data breaches — the first law of its kind in Europe. This means that communications providers will be obliged to inform the authorities and their customers about security breaches affecting their personal data. This will increase the incentives for better protection of personal data by providers of communications networks and services. In addition, the rules concerning privacy and data protection are strengthened, e.g. on the use of 'cookies' and similar devices. Internet users will be better informed about cookies and about what happens to their personal data, and they will find it easier to exercise control over their personal information in practice. Furthermore, internet service providers will also gain the right to protect their business and their customers through legal action against spammers.

6.  Better access to emergency services, 112: The new telecoms rules will ensure that European citizens gain better access to emergency services by extending the access requirements from traditional telephony to new technologies, strengthening operators' obligation to pass information about caller location to emergency authorities, and by improving general awareness of the European emergency number '112'. In addition, provisions on access to telecoms services for Europeans with disabilities have been strengthened so that they can benefit from the same usability of services as other citizens, but by different means. For the first time, the EU's telecoms rules will include a provision on the availability of terminal equipment offering the requisite services and functions for users with disabilities.

7.  National telecoms regulators will gain greater independence: The new telecoms rules reinforce national telecoms regulators' independence by eliminating political interference in their day-to-day duties and by adding protection against arbitrary dismissal for the heads of national regulators.

8.  A new European Telecoms Authority that will help ensure fair competition and more consistency of regulation on the telecoms markets. The reform creates a very important tool for making a single European telecoms market a reality: the new European Telecoms Authority 'BEREC' (Body of European Regulators for Electronic Communications) that will replace the loose cooperation behind closed doors that exists today in the 'European Regulators Group' with a more transparent and more efficient approach. BEREC decisions will be taken, as a rule, by majority of the heads of the 27 national telecoms regulators: by a simple majority when BEREC gives opinions in the context of the Commission's analysis of remedies notified by national regulators, and by a two thirds majority in other cases. Such BEREC decisions will be prepared by an independent supranational Office with expert staff. BEREC will also advise, support and complement the independent work of national telecoms regulators, especially when it comes to regulatory decisions with a cross-border relevance. A decision on the seat of BEREC still needs to be taken by the Governments of the 27 Member States.

9.  A new Commission say on the competition remedies for the telecoms markets: The new EU telecoms rules will give the European Commission the power to oversee regulatory remedies proposed by national regulators (e.g. on the conditions of access to the network of a dominant operator; or on fixed or mobile termination rates). The objective is to avoid inconsistent regulation that could distort competition in the single telecoms market. When the Commission, in close cooperation with BEREC, considers that a draft remedy notified by a national regulator would create a barrier to the single market, the Commission may issue a recommendation that requires the national regulator to amend or withdraw its planned remedy.

The new rules also enable the Commission to adopt further harmonisation measures in the form of recommendations or (binding) decisions if divergences in the regulatory approaches of national regulators, including to remedies, persist across the EU in the longer term, e.g. on broadband access conditions or on mobile termination rates.

10.  Functional separation as a means to overcome competition problems: National telecoms regulators will gain the additional tool of being able to oblige telecoms operators to separate communication networks from their service branches, as a last-resort remedy. This new remedy has been advocated since 2007 by the European Commission and by the 27 national regulators. Functional separation can rapidly improve competition in markets while maintaining incentives for investment in new networks. Functional separation has been implemented in the UK since January 2006 where it triggered a surge in broadband connections (from 100.000 unbundled lines in December 2005 to 5.5 million 3 years later). The new EU rules on functional separation will add legal certainty for countries currently moving towards different forms of separation (Poland, Italy), while ensuring overall consistency for the benefit of the single market, effective competition and consumer choice.

11.  Accelerating broadband access for all Europeans: Currently, in rural areas of the EU only an average of 70% of the population can have access to a broadband network connection. The reform will help in overcoming this "digital divide" by better managing radio spectrum and by making it effectively available for wireless broadband services in regions where building a new fibre infrastructure is too costly; and by allowing Member States to expand universal service provisions beyond narrow-band internet access.

The reform in particular puts a much stronger emphasis on technology and service flexibility in spectrum use, making it easier for operators to introduce innovative technologies and services. This increased flexibility will bring important economic gains and has the potential to generate an estimated additional 0.1% of GDP per annum. In particular, it will allow the "digital dividend", the radio spectrum freed as a result of the switchover from analogue to digital TV, to work for the economic recovery as also stressed in the Commission's recent Communication on transforming the digital dividend into social benefits and economic growth.

12.  Encouraging competition and investment in next generation access networks: The new rules bring legal certainty for investment in next generation access (NGA) networks. These networks, based on new optical fibre and wireless network technologies, are replacing less efficient traditional copper-wire networks and will allow high-speed internet connections. The reform of the telecoms rules reaffirms the importance of competition in this new sector while at the same time preserving incentives to invest by taking into account the risks involved in allowing access to NGA networks and allowing for various cooperative arrangements between investors and access-seeking operators. In this way, the new rules will also ensure telecoms operators receive a fair return on their investments. On the basis of the new rules, the Commission plans to issue a recommendation for the regulation of access to NGA networks in the first half of 2010, taking into account the results of public consultations in 2008 and 2009. The rules governing the sharing of network elements, such as ducts or in-building wiring, between operators are also updated by the reform. Besides improving competition and services for businesses and consumers, this will also help lower the overall financial costs for operators of deploying NGA networks."

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28   Directive 2009/140/EC of the European Parliament and of the Council of 25 November 2009 amending Directives 2002/21/EC on a common regulatory framework for electronic communications networks and services, 2002/19/EC on access to, and interconnection of, electronic communications networks and associated facilities, and 2002/20/EC on the authorisation of electronic communications networks and services. See OJ 2009 L337. Back

29   Directive 2009/136/EC of the European Parliament and of the Council of 25 November 2009 amending Directive 2002/22/EC on universal service and users' rights relating to electronic communications networks and services, Directive 2002/58/EC concerning the processing of personal data and the protection of privacy in the electronic communications sector and Regulation (EC) No 2006/2004 on cooperation between national authorities responsible for the enforcement of consumer protection laws. See OJ 2009 L337. Back

30   Regulation (EC) No 1211/2009 of the European Parliament and of the Council of 25 November 2009 establishing the Body of European Regulators for Electronic Communications (BEREC) and the Office. See OJ 2009 L337. Back

31   ^{TheEuropeanRegulatorsGroupforelectroniccommunicationsnetworksandserviceswassetupbytheCommissiontoprovideasuitablemechanismforencouragingcooperationandcoordinationbetweennationalregulatoryauthoritiesandtheCommission,inordertopromotethedevelopmentoftheinternalmarketforelectroniccommunicationsnetworksandservices.Buildingonthisexperience,theBodyofEuropeanRegulatorsforElectronicCommunications(BEREC)anditssupportOfficewerecreatedwithintherecentlyapprovedreformoftheEUTelecomrulestoimprovetheconsistencyofimplementationoftheEUregulatoryframework.ThefirstmeetingsoftheBoardofRegulatorsofBERECandtheManagementCommitteeoftheOfficewereheldinBrusselson28January2010.InJuly2010,MemberStatesdecidedthatitspermanentseatwillbeinRiga.Seehttp://berec.europa.eu/Default.htmforfurtherinformationonBEREC.} Back

32   ^{ThegeneralideabehindNextGenerationNetworks(NGN)isthatonenetworktransportsallinformationandservices(voice,data,andmediasuchasvideo)byencapsulatingtheseintopackets,asontheInternet.TheInternationalTelecommunicationsUnionthusdefinesNGN)as"apacket-basednetworkabletoprovideTelecommunicationServicestousersandabletomakeuseofmultiplebroadband,QoS-enabledtransporttechnologiesandinwhichservice-relatedfunctionsareindependentoftheunderlyingtransport-relatedtechnologies.Itenablesunfetteredaccessforuserstonetworksandtocompetingserviceprovidersandservicesoftheirchoice.Itsupportsgeneralisedmobilitywhichwillallowconsistentandubiquitousprovisionofservicestousers."Seehttp://www.itu.int/en/pages/default.aspxforfurtherinformation.} Back

33   ^{Marketsdefinedby2007/879/EC,CommissionRecommendationof17thDecember2007,onrelevantproductandservicemarketswithintheelectroniccommunicationssectorsusceptibletoexanteregulationinaccordancewith} 2002/21/EC of the European Parliament and of the Council on a common regulatory framework for electronic communications networks and services - the "Framework Directive" (FWD). Back

34   In common parlance, the NGA Recommendation. Back

35   A target contained within the Broadband Strategy. Back

36   Decision No 676/2002/EC of the European Parliament and of the Council of 7 March 2002 on a regulatory framework for radio spectrum policy in the European Community (Radio Spectrum Decision). Back

37   Directive 1999/5/EC of the European Parliament and of the Council of 9 March 1999 on radio equipment and telecommunications terminal equipment and the mutual recognition of their conformity. Back

38   Extracted from http://ec.europa.eu/information_society/policy/ecomm/tomorrow/reform/index_en.htm. Back

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Prepared 5 November 2010