Documents considered by the Committee on 8 February 2017 Contents

18Digital Single Market: Wholesale roaming charges

Committee’s assessment

Politically important

Committee’s decision

Cleared from scrutiny; further information requested; drawn to the attention of the Committee for Exiting the European Union, the Culture, Media and Sport Committee, and the Business, Energy and Industrial Strategy Committee

Document details

(a) Commission Report on the review of the wholesale roaming market; (b) Proposal for a Regulation amending Regulation (EU) No. 531/2012 as regards rules for wholesale roaming markets

Legal base

(a) —; (b) Article 114 TFEU; ordinary legislative procedure; QMV

Department

Culture, Media and Sport

Document Numbers

(a) (37869), 10327/16 + ADD 1, COM(16) 398; (b) (37870), 10329/16 + ADDs 1–2, COM(16) 399

Summary and Committee’s conclusions

18.1On 16 June 2016 the Commission presented a proposal to further reduce EU caps on ‘wholesale roaming’—the prices that operators charge each other for use of their networks when their customers roam on the ‘visited’ operators’ networks. This legislative measure was necessary to ensure that the EU’s political commitment to abolishing retail roaming surcharges for consumers by 15 June 2017 was commercially sustainable for mobile operators.

18.2During negotiations regarding the level at which to set the different wholesale roaming caps (for data, SMS and voice calls) tensions have arisen both within and between the different European institutions. EU Member States which experience net influxes of roaming consumers, mainly the southern Member States, have an interest in maintaining higher levels of wholesale caps so that their mobile network operators (MNOs) can benefit from higher revenues. As the UK has a net outflow of roaming consumers, lower wholesale roaming caps are in the interests of UK mobile operators.

18.3On 2 December 2016 the Telecommunications Council agreed a General Approach in relation to the regulation on rules for wholesale roaming. The data roaming caps set were slightly higher than the Commission’s original proposal, but established a downward “glide path” whereby they would steadily reduce over the following five years.

18.4On 29 November the European Parliament’s Committee on Industry, Research and Energy (ITRE) gave Parliament’s negotiating team a mandate to negotiate with Council in order to find an agreement. It proposed significantly lower caps than those proposed by the Council, particularly for data roaming.

18.5Three trilogue negotiation meetings subsequently took place and an informal agreement between the institutions was reached on 31 January. As the Minister anticipated, the European Parliament succeeded in negotiating lower wholesale caps for data roaming than those proposed by the Council. A phased reduction over 5 years is proposed for data caps which will progressively decrease from €7.7 per GB (as of 15 June 2017) to €2.5 per GB (as of 1 January 2022). Wholesale caps for voice calls will fall to 3.2 cents per minute from 15 June 2017, a slight reduction over the level proposed by the Council. SMS roaming will be capped at 1 cent per message—the same cap previously proposed by the Commission and the Council.

18.6The Minister states that final agreement will take place in the Committee of Permanent Representatives (COREPER) on 8 February. The file will then go as an ‘A’ vote to Ministerial Council, meaning that the decision will be made without debate, most probably in March or April.

18.7We thank the Minister for updating us on the outcome of trilogue negotiations regarding the wholesale roaming regulation in advance of agreement being reached in the Committee of Permanent Representatives (COREPER).

18.8As a consequence of this agreement, the wholesale roaming caps that limit the fees that mobile operators can charge each other when their customers use their networks will be reduced as follows:

18.9We concur with the Minister’s assessment that the agreement represents “a significant further reduction in wholesale data caps relative to the caps proposed in the Council’s General Approach” and that it will be “beneficial for both UK consumers and mobile operators”. In addition to enabling UK consumers to benefit from surcharge-free roaming services from 15 June 2017, the lower wholesale caps will limit the cost of delivering surcharge-free roaming services to consumers travelling elsewhere in the EU for UK mobile operators.

18.10We are content to clear the document from scrutiny in advance of the forthcoming meetings of the COREPER and the Ministerial Council, on the understanding that the Minister responds in detail to those questions the Committee asked in its report of 18 January 2017 which have not yet been answered (see below). We ask that the Minister do so by 10 March 2017.

18.11We draw the Minister’s response and our conclusions to the attention of the Committee for Exiting the European Union, the Culture, Media and Sport Committee, and the Business, Energy and Industrial Strategy Committee.

Outstanding questions

Brexit implications

18.12We note the Minister’s previously expressed view that “UK consumers will experience a period of free regulated roaming before the UK’s exit from the EU”. We ask that the Minister clarify whether he is persuaded that the UK will not be able to retain surcharge-free roaming throughout the EU after Brexit, and explain the basis of his assessment.

18.13We also note EU Commissioner Günther Oettinger’s assessment that WTO rules mean that continued UK-EU surcharge-free roaming arrangements could only be concluded in the context of a comprehensive Free Trade Deal.141 We ask the Minister to clarify whether he concurs with this assessment, or whether he believes that a bilateral deal to maintain surcharge-free roaming between the UK and the EU (including caps on wholesale roaming charges) could be concluded outside the scope of a Free Trade Agreement.

18.14We request an assessment of the implications of non-participation in the EU-wide abolition of roaming surcharges for different groups of UK stakeholders (e.g., consumers, businesses, mobile operators).

Implementing act

18.15We request a clear account of the fair use policy and sustainability mechanism implementing act that has been adopted by the Commission, including an account of the Government’s position in negotiations in the Communications Committee and a summary of its implications for UK consumers and mobile operators.

Full details of the documents

(a) Commission Report on the review of the wholesale roaming market: (37869), 10327/16 + ADD 1, COM(16) 398; (b) Proposal for a Regulation amending Regulation (EU) No. 531/2012 as regards rules for wholesale roaming markets: (37870), 10329/16 + ADDs 1–2, COM(16) 399.

Background

18.16Consumers who use their phones while travelling often pay high charges for roaming on mobile networks in other countries. Since the introduction of the EU roaming regulations (or ‘Eurotariff’) in 2007, the roaming charges consumers pay to make calls, send SMS or use data from another EU Member State have fallen by over 90%. The EU has capped these charges for EU citizens travelling within the EU and gradually lowered these caps.

18.17As the roaming regulations are EEA measures, non-EU EFTA members of the EEA (Norway, Iceland, Liechtenstein) participate in them. Non-EEA countries—even including Switzerland, which participates in the EU’s Board of European Regulators of Electronic Communications (BEREC)—do not, meaning that their citizens pay higher charges when using roaming services within the EU. When the UK leaves the EU it could in principle conclude a bilateral arrangement that would allow UK and EU consumers and mobile networks to continue to benefit from caps on roaming charges, were both parties willing to do so; however, World Trade Organisation (WTO) most favoured nation (MFN) rules appear to preclude a preferential arrangement of this kind on a bilateral basis unless it is part of a comprehensive Free Trade Agreement.

18.18In October 2015 the EU agreed to end the roaming charges that mobile operators charge their customers when they travel abroad by 15 June 2017. Delivering this policy without causing excessive disruption to domestic markets is challenging because of factors such as discrepancies in inbound and outbound travel volumes between northern and southern Member States. To make this policy commercially deliverable for mobile operators it is therefore necessary to take a number of actions, including to introduce lower caps on ‘wholesale’ roaming charges—the prices that operators charge each other for use of their networks when their customers roam on the ‘visited’ operators’ networks.

18.19On 16 June 2016 the Commission presented a proposal to further reduce EU caps on wholesale roaming. On 18 November the Minister (Matthew Hancock) wrote to the Committee requesting clearance not of the Regulation, but of a separate measure required to deliver surcharge-free roaming for EU consumers: the implementing act that details the ‘fair use policy’, which is designed to prevent users arbitraging the disparity in rates between Member States, and the ‘sustainability mechanism’, which will allow operators to apply a surcharge in exceptional circumstances if they are not able to recover their costs. Unfortunately this file was never deposited for scrutiny and as such is not subject to the scrutiny reserve. Failure to deposit this file for scrutiny is particularly regrettable given the Act’s exceptionally high political profile, which at one stage involved the President of the European Commission announcing in his State of the Union speech that the Commission was withdrawing a draft of the implementing act.142

18.20On 2 December the Telecommunications Council agreed a General Approach in relation to the Regulation on wholesale roaming (10329/16). As the Minister in his previous letter had not sought clearance of the Regulation the Government’s vote in favour of the General Approach constituted a scrutiny override.

18.21The Minister acknowledged the override in a subsequent letter, in which he stated that it was necessary to vote in favour of the measure as it was in the UK’s interests. He summarises the General Approach, which will reduce wholesale roaming caps for mobile operators. He undertakes to provide further updates on the implementing act in due course, even though it is not under scrutiny.

18.22In its report on 18 January the Committee requested:

The Minister’s letter of 7 February 2017

18.23The Minister writes in response to the Committee’s request for an update on trilogue negotiations. He states that trilogue negotiations with the European Parliament and the Commission took place on 15 December 2016, 18 January 2017 and 31 January, at which “agreement was reached on the final outstanding issue—wholesale data caps.”

18.24The new wholesale data caps are shown below, alongside the higher figures previously agreed in the Council’s General Approach:

In Euros

15-Jun-17

15-Jun-18

15-Jun-19

15-Jun-20

15-Jun-21

30-Jun-22

Council General Approach: Data (per MB)

0.01

0.0085

0.007

0.006

0.005

0.005

Trilogue compromise text: Data (per MB)

0.0077

0.006

0.0045

0.0035

0.003

0.0025

18.25The Minister reports that the agreement represents “a significant further reduction in wholesale data caps relative to the caps proposed in the Council’s General Approach” which will “be beneficial for both UK consumers and mobile operators.”

18.26The Minister informs the Committee that agreement was also reached in trilogue on the wholesale cap for voice calls, which will be capped at €0.032/minute—a very small reduction on the cap in the Council’s General Approach of €0.035/minute. He adds that the wholesale cap agreed for SMS messages was €0.01/SMS—the same level as that proposed by the Council. The wholesale caps for both voice calls and SMS messages will take effect from June 15, 2017.

18.27The Minister states that final agreement will take place in COREPER on 8 February. The file will then go as an ‘A’ vote to Ministerial Council, which is likely to be in March or April.

18.28The Minister requests that the Committee lift the scrutiny reserve.

Previous Committee Reports

Twenty-seventh report HC 71-xxix (2016–17), chapter 3 (18 January 2017); Eleventh report HC 71-ix (2016–17), chapter 16 (14 September 2016).


141 Business Insider UK, ‘Brits could see a huge increase in mobile phone roaming charges after Brexit’ (December 30, 2016) http://uk.businessinsider.com/britain-eu-mobile-phone-roaming-charges-brexit-2016–12

142 European Commission—Press release: The State of the Union 2016.




10 February 2017