CHAPTER 3: Is EU Action Appropriate?
18. The majority of our witnesses agreed that
due to the cross border nature of roaming, national regulatory
authorities are not able to resolve the problem of high roaming
prices. Commissioner Reding made this point when she told us that
the European Regulators Group alerted her to its concern that
national regulators were unable to address these prices. (Q 147)
19. This point was echoed to us by the European
Parliament Rapporteurs for the Industry, Research and Energy and
the Internal Market and Consumer Protection Committees. Based
on the evidence they had received in their own scrutiny of the
proposal, they agreed that national regulatory authorities were
not able to tackle the problem on their own.
20. Ofcom also recognised the cross-border nature
of the problem as the main reason why there was a need for Community
action in this area. They saw "legislation in the form of
directly-effective EU Regulation as an appropriate way to address
the problem" (p 25). The European Consumers' Organisation
(BEUC) shared this view. (p 57)
21. It was also suggested to us that even though
competition had worked efficiently at national level resulting
in lower retail prices for mobile telephony products, the same
was not the case with roaming charges which had remained consistently
high. All reductions were marginal and occurred mainly after the
Commission had announced the draft Regulation. BEUC argued for
Community level action as a result of the lack of proposals by
industry for self-regulation and because co-regulation could not
properly address the issue due to its cross border nature (p 57).
We agree that there is a clear case for regulation at a Community
level.
22. The case has also been made that high roaming
prices have an effect on the functioning of the Single Market.
We consider that high roaming prices have an impact on the
efficiency of Small and Medium-sized Enterprises (SMEs) and their
ability to conduct business when having to operate from abroad.
Furthermore the lack of transparency in prices has reduced the
consumer's ability to compare costs of roaming across the Single
Market and between operators.
23. The industry did not, as a whole, agree that
regulation at the EU level was the right response to the issue
at hand. In their evidence their representative body, the GSM
Association, stated that the proposed Regulation would "adversely
affect consumers, reduce competition and innovation among European
operators and damage the competitiveness of the EU" (p 108).
This sentiment was echoed, to varying degrees, by all operators
who gave evidence. The majority of operators advocated leaving
the market to reduce retail prices by itself, using the reductions
in the cost of roaming in the past two years as proof that the
market works.
24. We are also aware that Orange and Vodaphone
have raised serious legal objections to the Commission's use of
Article 95 TEC as a legal base. The Commission as well as the
Minister, in their evidence, were confident that Article 95 constitutes
the appropriate legal basis for this Regulation (QQ 170,114).
We do however expect the Government to give this issue close
attention.
25. We feel that the evidence we received
on the need for action at the EU level to reduce the cost of roaming
is convincing. But we do not want to see excessive regulation
that will harm the operation of an otherwise healthy and innovative
industry.
26. Our position on the details of the legislation
we see as necessary will be reflected in the sections that deal
with our view on the various legislative proposals as presented
by the different EU institutions involved in the decision making
process.
TABLE 1
What are the options proposed by various
parties?
| European Commission
| Council of Ministers
| European Parliament
|
| Wholesale
| The Commission has proposed a wholesale price cap of 23 eurocents per minute for calls made within the country and a wholesale price cap of 35 eurocents per minute for calls made between Member States.
The Commission strongly believes in the idea of absolute caps and rejects averages as cumbersome.
| The German Presidency of the Council is proposing a wholesale average of 30 eurocents per minute (the equivalent of 2.6 times the average domestic Mobile termination Rate).
| The Committee on Industry, Research and Energy of the European Parliament is proposing wholesale regulation based on domestic Mobile Termination Rates multiplied by the factor X (revised by national regulatory authorities) leading to a single European cap.
|
| Retail |
The original Commission proposal for retail regulation envisaged that operators may not add a margin of more than 30% to their wholesale prices. In view of developments in the negotiations between the EP and the Council they are prepared to accept a Consumer Protection Tariff. The Commission also supports the idea of an opt-out.
| Due to the resistance to retail regulation by several member states the Presidency has proposed as a compromise the Consumer Protection Tariff (at 50 eurocents) with opt-in and opt-out provision.
| Proposal for a Euro-tariff with upper price limit (similar to the Presidency proposal). The EP Committee is split on the issue of retail regulation but the possibility of a compromise for a Consumer Protection Tariff in order to achieve agreement on the 1st Reading is very strong. The EP rapporteur favours the possibility of an opt-in.
|
| Sunrise-Sunset clause
| The Commission expressively rejected the idea of a sunrise clause from the beginning on the grounds that further delays in enforcing the regulation will cause further costs to consumers.
| The British and French proposal for a sunrise clause met with a limited amount of support from the beginning before it was replaced by the German Presidency's compromise proposal for a sunset clause. This proposal has recently lost most of its support in the Council.
| The sentiment in the European Parliament is against the idea of time-limiting the regulation.
|
| Data-roaming
There is consensus between the institutions that the scope of the legislation should not be extended at this point to cover data roaming. This is mainly due to the fact that the Commission did not conduct an Impact Assessment for data roaming when in made its original proposals. It is agreed that data roaming should be regulated in the future but trying to do so now would delay significantly the adoption of the regulation for voice roaming.
|
| 
