3 The Telecommunications Single Market
| Committee's assessment
| Legally and politically important |
| Committee's decision | Not cleared from scrutiny; further information requested; but conditional waiver granted under paragraph (3)(b) of the Scrutiny Reserve Resolution (decision reported on 19 November 2014); drawn to the attention of the Culture, Media and Sport Committee
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| Document details | (a) Commission Communication on the Telecommunications Single Market (b) Council Regulation laying down measures concerning the European single market for electronic communications and to achieve a Connected Continent
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| Legal base | (a) —; (b) Article 114 TFEU; ordinary legislative procedure; QMV
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| Department | Culture, Media and Sport
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| Document numbers | (a) (35305), 13562/13, COM(13) 634; (b) (35304), 13555/13 + ADDs 1-2, COM(13) 627
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Summary and Committee's conclusions
3.1 The Commission argues that, as the world moves
rapidly towards an Internet-based economy, Europe lacks a genuine
single market for electronic communications, and is consequently
losing out on a major source of potential growth. It also states
that decisive further action is needed to prevent any further
decline in Europe's global position in this sector; considers
what remaining barriers exist; and sets out measures that the
Commission believes are needed to change the existing regulatory
framework (last revised in 2009) in order to remedy the situation.
3.2 Recalling the conclusions of the 2013 Spring
European Council, calling for measures to create a Single Telecoms
Market as early as possible, the Commission published on 11 September
2013 a legislative package for a Connected Continent: Building
a Telecoms Single Market, which it says is aimed at building a
connected, competitive continent and enabling sustainable digital
jobs and industries; with proposed legislative changes to several
regulations that (the Commission says) would "make a reality
of two key EU Treaty Principles: the freedom to provide and to
consume (digital) services wherever one is in the EU".
3.3 The full background to the Commission Communication
and this draft Regulation is set out in the first of our previous
Reports; likewise the very detailed and helpful analysis of both
documents by the Minister (Mr Edward Vaizey) in his Explanatory
Memorandum of 10 October 2013.[10]
3.4 Our subsequent Reports embody a number of series
of full and very helpful updates ever since this package was first
deposited.[11] They
include, in September, the Opinion of the Culture, Media and Sport
Committee (CMS), along with Ofcom's submission to that Committee.
The CMS Committee deemed it clear from Ofcom's submission that
at least some of the proposals lack sufficient grounding in terms
of evidence, analysis and consultation, and that much work remained
to be done to achieve outcomes that were proportionate and struck
an appropriate balance between national and wider European interests
(see "Background" below for summary).[12]
3.5 Most recently, the Minister wrote to say that,
contrary to all expectations, the Presidency was set on reaching
a General Approach at the 27 November Telecoms Council. On the
key outstanding issues, he said that:
— there was "a general political commitment
towards abolishing mobile roaming charges within the EU, although
questions remained over the mechanism to achieve this and the
timing for its introduction"; the Minister remained "committed
to achieving a 'Roam Like At Home' outcome, effective as soon
as was possible", and continued "to strive to achieve
that outcome";
— there was "also a general consensus
on the introduction of a regulation on net neutrality[13]
although, like roaming, there was currently a lack of consensus
on approach"; and
— there remained "some areas of disagreement
between Council and the Commission on how to approach future spectrum
management": no detailed discussion had yet taken place on
how to resolve this lack of agreement; the Minister's position
remained one where he did not wish "to see an oversight role
for the Commission in such matters" but instead "to
evolve the role of the existing Radio Spectrum Policy Group",[14]
which he said remained the approach favoured by the Council.
3.6 He summarised the overall position thus:
"some progress has been made and the general
direction of travel is one that favours a simplified approach
as long-championed by the UK and has the potential to realise
a demand-side and consumer-centric solution that would help drive
the digital single market and be of real benefit to UK businesses
and consumers."
3.7 His request was as follows: in order to ensure
that the UK was able to take part in the discussion of, and agree
to any General Approach, that the Committee provided a scrutiny
reserve waiver, thus "allowing UK to support a General Approach
that fits our existing negotiating position", and based on
the understanding that "should the proposed General Approach
fall outside the UK's current negotiating mandate, I will not
be willing to agree same".
3.8 We acknowledged with appreciation the Minister's
openness thus far. We agreed to a scrutiny reserve waiver on
the basis of the understanding set out above and also provided
that:
— he continued to supply regular updates
on the trilogue negotiations, in the same detail as hitherto;
and
— he deposited the final text of the draft
Regulation that emerges from the trilogue process, without caveat
and with a fresh Explanatory Memorandum, in good time for a debate
prior to formal adoption by the Council, should the Committee
then so decide.[15]
3.9 The Minister now explains that:
— the agenda item was changed to a "State
of Play" shortly before Council. Whilst "not a recognised
category of document", it "can be conceptually considered
to lie between a Progress Report and a General Approach",
and reflected the Presidency's ambition of achieving the same
outcome, i.e. that informal trialogue with the European Parliament
began at the earliest opportunity.
— whilst a number of Member States —
including UK — supported this approach, in order to achieve
a simplified agreement including action on mobile roaming charges,
a sufficiently large number cited concerns about the lack of a
common position in Council: some argued that elements of the proposal
had evolved from the original Commission proposals to the extent
that further examination and impact assessments were required;
it was also clear that there was not sufficient agreement on roaming
and net neutrality to move forward as proposed;
— there was also serious concern among
some Ministers that the Presidency was mismanaging the process
by attempting to circumvent the will of Council in order to enter
trialogue discussions with the Parliament at a stage when no common
Council position had been adopted;
— the Council decided to refer the proposal
back to Working Group level for further development, with the
two remaining Working Groups under the Italians focussing on net
neutrality and mobile roaming;
— early indications from the incoming Latvian
Presidency are that they do not regard it as a priority, though
the Minister anticipates pressure from the Commission towards
reaching an early agreement on the package;
— it "very much remains" the
Minister's ambition that an agreement around a simplified Regulation
containing action on mobile roaming is reached as soon
as possible, and his officials are looking to work with both
Presidencies to ascertain if a compromise around these issues,
and more widely, is achievable;
— given the current status of the proposal
and lack of clarity regarding plans for progress in the short
term, he proposes to write again early in 2015, once the incoming
Presidency has made clear its plans and intentions for this proposal.
3.10 We are again grateful to the Minister for
these insights, and look forward to hearing from him, as suggested,
early in the New Year.
3.11 In the meantime, we note that the scrutiny
waiver applied only to the 27 November 2014 Telecoms Council and
that, should the Minister again find himself in that position,
he will need to seek a fresh prior agreement from the Committee.
3.12 Also:
— we again draw this chapter of our
Report to the attention of the Culture, Media and Sport Committee;
and
— both documents remain under scrutiny.
Full details of the documents:
(a) Communication from the Commission to the European Parliament,
the Council, the European Economic and Social Committee and the
Committee of the Regions on the Telecommunications Single Market:
(35305), 13562/13, COM(13) 634; (b) Draft Regulation of the European
Parliament and of the Council laying down measures concerning
the European single market for electronic communications and to
achieve a Connected Continent, and amending Directives 2002/20/EC,
2002/21/EC and 2002/22/EC and Regulations (EC) No. 1211/2009 and
(EU) No. 531/2012: (35304), 13555/13 + ADDs 1-2, COM(13) 627.
Background
3.13 The CMS Committee deemed it clear from Ofcom's
submission that at least some of the proposals lack sufficient
grounding in terms of evidence, analysis and consultation, and
that much work remained to be done to achieve outcomes that were
proportionate and struck an appropriate balance between national
and wider European interests. With regard to what they saw as
the four most significant proposals in the draft Connected Continent
Regulation, the CMS Committee said:
— international roaming charges:
there was welcome recognition on the part of the European Parliament
(EP) that there were simpler ways to achieve lower roaming charges
than the Commission's draft Regulation; it should be better recognised
that smaller national mobile network operators significantly contribute
to market competitiveness;
— net neutrality:[16]
while sharing the Commission's broad objectives of protecting
consumers' access to unrestricted internet access services, there
was insufficient evidence of market failure to justify regulatory
intervention on the scale envisaged by the Commission;
— consumer protection: while it
agreed with the Commission's ambitions to improve consumer protection
across Europe — for example in relation to making it easier
for consumers to switch between service providers — national
regulators were best placed to judge on what timescales desirable
changes can be achieved, taking into account the market situation
in their individual Member States; and
— spectrum management: while close
cooperation with European partners in the area of spectrum management
was necessary, it agreed with Ofcom that spectrum management,
and spectrum awards in particular, must remain a national competence.
3.14 We also noted that "Ofcom does not see
a need for prescriptive and detailed rules on net neutrality,
as proposed in the Commission's draft Connected Continent Regulation",
and that Ofcom went on to say:
"The internet is an enormously complex and dynamic
ecosystem, where the law of unintended consequences looms very
large and there are real dangers in attempting to regulate (continually
evolving) network engineering practices. In short, every new rule
is a potential new loophole.
"We are therefore concerned that, by seeking
to protect the (widely shared) regulatory objectives to promote
the open Internet into hardwired rules and rights, the Commission's
(and the European Parliament's) proposals risk undermining the
efficient management of network resources, the innovative potential
of the Internet, and ultimately the consumer interest. The European
Parliament's text, in particular, further compounds the very restrictive
language severely constraining operators' ability to manage traffic
on their networks, and raises serious questions of enforceability
and legal certainty. Of particular interest in the UK, the European
Parliament text is so restrictive, it would appear to prevent
the operation of the IWF blocked URL list (which enables the rapid
blocking of images of child sexual abuse).
"It is worth noting that there is no clear evidence
of a market failure warranting this kind of regulatory intervention."
3.15 Underlining their clarity, we drew our colleagues
and Ofcom's views to the attention of the House because of the
importance of the issues under negotiation, and hoped that they
would fortify the Minister at this crucial juncture.[17]
The Minister's letter of 15 December 2014
3.16 The Minister says that, taken along with his
pre- and post-Council Ministerial statements to the House, the
purpose of his letter is to provide detail of the debate on the
discussion at 27 November Telecoms Council and its outcomes, together
with his expectations of how the proposal will proceed under the
last weeks of the current Presidency and that of the incoming
Latvian Presidency.
3.17 Before doing so, the Minister expresses his
appreciation to the Committee for granting the scrutiny waiver:
"Whilst it was not needed in the end as the agenda item
for Council changed at short notice, its granting was much appreciated".
3.18 The Minister then continues as follows:
"On this matter, you may recall from my previous
letter that the Italian Presidency were striving to agree a General
Approach at Council. There was quite some resistance to the proposal
from a number of Member States who felt that the proposal had
not be progressed sufficiently for this to be the outcome and
so the agenda item was changed to a 'State of Play' shortly before
Council. Whilst this is not a recognised category of document,
it can be conceptually considered to lie between a Progress Report
and a General Approach. Additionally, the Presidency retained
its ambition of achieving the same outcome i.e. that informal
trialogue with the European Parliament begin at the earliest opportunity.
"Whilst a number of Member States — including
UK — supported this approach in our overall aim to reach
a simplified agreement including action on mobile roaming charges,
there was again a sufficiently large number of Member States who
cited concerns about lack of a common position in Council and
that a number of the elements of the proposal had been evolved
from the original Commission proposals to the extent that further
examination and impact assessments were required. Further, it
was clear that there was not sufficient agreement within Council
on the elements covering roaming and net neutrality to move forward
as proposed. There were also serious concern among some Ministers
that the Presidency was mismanaging the process by attempting
to circumvent the will of Council in order to enter trialogue
discussions with the Parliament at stage when no common Council
position had been adopted. The discussion concluded by Council
rejecting calls to enter into early trialogue and referred the
proposal back to Working Group level for further development.
"Thus, it is now anticipated that the proposal
will be passed to the incoming Latvian Presidency to progress
following the last remaining Working Group meetings under the
Italians; the two remaining Working Groups under the Italians
will focus on the issues of net neutrality and mobile roaming.
"In terms of expectations from the incoming
Latvian Presidency, the specific detail of how they intend to
manage this proposal is currently unknown. Early indications
are the Latvians do not regard it as a priority and are planning
to rank this fifth or sixth amongst six portfolios that will be
progressed under their aegis in this policy space. However, I
think it fair that we can anticipate them coming under some pressure
from the Commission as, during its intervention at Council, they
again emphasised the need to reach an early agreement on the package.
"It very much remains my ambition that an agreement
around a simplified Regulation containing action on mobile roaming
is reached as soon as possible. As such, my officials are looking
to work with both Presidencies to ascertain if a compromise around
same, and more widely is achievable.
"Given the current status of the proposal and
lack of clarity regarding plans for progress in the short term,
I propose that I write again early in 2015 once the incoming Presidency
has made clear its plans and intentions for this proposal. In
the meantime, please feel free to contact me should your committee
have any immediate queries."
Previous Committee Reports
Twentieth Report HC 219-xix (2014-15), chapter 1
(19 November 2014), Thirteenth Report HC 219-xiii (2014-15), chapter
11 (15 October 2014), Ninth Report HC 219-ix (2014-15), chapter
9 (3 September 2014), Eighth Report HC 219-viii (2014-15), chapter
5 (16 July 2014), First Report HC 219-i (2014-15), chapter 5 (4
June 2014), Thirty-fourth Report HC 83-xxxi (2013-14), chapter
2 (5 February 2014), Twenty-eighth Report HC 83-xxv (2013-14),
chapter 4 (18 December 2013) and Eighteenth Report HC 83-xvii
(2013-14), chapter 2 (16 October 2013).
10 See Eighteenth Report HC 83-xvii (2013-14), chapter 2
(16 October 2013). Back
11
See Twentieth Report HC 219-xix (2014-15), chapter 1 (19 November
2014), Thirteenth Report HC 219-xiii (2014-15), chapter 11 (15
October 2014), Ninth Report HC 219-ix (2014-15), chapter 9 (3
September 2014), Eighth Report HC 219-viii (2014-15), chapter 5
(16 July 2014), First Report HC 219-i (2014-15), chapter 5 (4
June 2014), Thirty-fourth Report HC 83-xxxi (2013-14), chapter 2
(5 February 2014), Twenty-eighth Report HC 83-xxv (2013-14), chapter 4
(18 December 2013). Back
12
See Ninth Report HC 219-ix (2014-15), chapter 9 (3 September 2014)
for full information. Back
13
Net neutrality is the principle that Internet service providers
and governments should treat all data on the Internet equally,
not discriminating or charging differentially by user, content,
site, platform, application, type of attached equipment, and modes
of communication. Proponents often see net neutrality as an important
component of an open internet, where policies such as equal treatment
of data and open web standards allow those on the internet to
easily communicate and conduct business without interference from
a third party. Back
14
The high-level advisory group assisting the Commission in developing
radio spectrum policy for the EU, which has hitherto played a
pivotal role in driving harmonisation of the technical aspects
of spectrum management in EU. Back
15
See Twentieth Report HC 219-xix (2014-15), chapter 1 (19 November
2014). Back
16
Net neutrality is the principle that Internet service providers
and governments should treat all data on the Internet equally,
not discriminating or charging differentially by user, content,
site, platform, application, type of attached equipment, and modes
of communication. Proponents often see net neutrality as an important
component of an open internet, where policies such as equal treatment
of data and open web standards allow those on the internet to
easily communicate and conduct business without interference from
a third party. Back
17
See Ninth Report HC 219-ix (2014-15), chapter 9 (3 September 2014). Back
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