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Member states want to change investment rules in telecoms overhaul – EURACTIV

Member states want to change investment rules in telecoms overhaul – EURACTIV

EU countries have changed measures on network investment in a major telecoms bill and are kicking negotiations into the second half of this year.

A new proposal from national governments, obtained by EURACTIV.com, includes changes to the European Commission’s plans to encourage telecoms operators to invest in building networks. The EU executive added the new rules on “co-investment” to the telecom overhaul it proposed last September.

The changes shake up a major part of the Commission’s proposal: how the rules could push telecoms operators to invest more in very high speed networks. Building those higher speed internet connections would require a cash injection of €500 billion over the next decade, according to the Commission’s own estimates.

Member states previously softened that part of the draft bill but have now changed their proposal back to match the Commission’s original plan. National telecoms regulators will be required to give operators a break and regulate them more lightly if they agree to invest in shared networks with their competitors. Berec, the body of national telecoms regulators, argued recently that the new requirement for them to regulate less would be an “unwarranted limitation” of their freedom.

But the process for agreeing those investment deals is different under the new proposal, which was drafted by the six-month, rotating presidency of the Council of the EU, currently held by Malta.

The Council’s new proposal suggests national regulators open a consultation if one operator wants to invest in networks, and ask for a counter-offer from other firms that want to join. Some industry sources suggested that could draw out and delay the whole process for firms to agree on a shared investment. Big and small operators have squabbled over the investment measures because they were concerned about abuse. Smaller firms feared they would suffer if bigger competitors face less regulation.

According to a new progress report on the telecoms negotiations, also obtained by EURACTIV, member states still cannot agree on a few issues in the bill, including how regulators should act on oligopolies – small groups of dominant companies. The Commission’s original proposal did not suggest creating any new legal measures, but some countries are concerned they don’t have enough legal means to crack down. Malta has not brokered a compromise between the member states yet.

“Such competition issues should be able to be addressed using general competition measures rather than requiring bespoke regulatory tools,” the Maltese proposal reads.

But diplomats acknowledge that could still be changed.

“This does not preclude, and indeed may support, the case that the application and interpretation of such regulatory tools needs to be reconsidered in light of this discussion,” the proposal says.

Member states are also divided over whether digital communication apps like WhatsApp or Facetime should be regulated exactly the same way across the EU or if countries should be able to apply the new law more loosely. Telecoms companies can be regulated more flexibly than digital services, according to the latest Council proposal. Digital services would fall under stricter rules that regulators would need to apply the same way across the EU.

A handful of countries, including Ireland, the UK, Sweden, Finland, Luxembourg and the Czech Republic, still do not want digital services like Skype or WhatsApp to be pulled under the new rules. But diplomats say the Council could still seal its position even if those countries oppose the measure. Discussions on that part of the bill are “mature”, one diplomat said. But the Maltese presidency hasn’t put forward a compromise deal yet.

The list of disagreements between the 28 EU countries is drawing out negotiations. More than half of the member states have sharply opposed the Commission’s plans to overhaul how they auction off lucrative radio spectrum to mobile operators, prompting outrage from both the Commission and industry groups. The new Maltese proposals show that divisions between the countries are not only limited to spectrum.

“These issues will have to be dealt with by the upcoming Presidency when preparing a COREPER mandate or COUNCIL General Approach this autumn,” the Maltese proposal reads.

That confirms what many in Brussels have suspected for months: the Commission’s timeline to seal the telecoms bill will be hard to meet. Günther Oettinger, who was the EU digital Commissioner in charge of the telecoms proposal up until he switched jobs in January, wanted the law passed in a hurry – by the end of this year.

One diplomat said there could be a few three-way negotiating meetings between the institutions by the end of this year, but a final deal will still be far off. Three-way trialogue talks between member states, MEPs and the Commission can start only after national governments agree on their position and the the full Parliament votes on its version of the proposal. Estonia will carry on the talks between member states when it takes over from Malta as head of the Council in July.

In the European Parliament, talks are moving ahead faster and MEPs will get to make their mark on the bill months before member states. The Parliament’s Internal Market Committee (ITRE) will vote on the bill in July.

MEPs in the ITRE Committee have focused several changes to the Commission proposal on what technologies can be used to build “very high capacity networks”.

Encouraging companies to build fast, new high capacity infrastructure with fibre networks is a centrepiece of the Commission proposal. That stirred upset among some larger incumbent operators that rely on older, copper networks and argue they would be expensive to completely replace very soon. Some MEPs put forward amendments to scrap the mention of fibre or specify that high capacity networks could be only partially made of fibre, while others defined specific internet speeds that the networks should support.

In Council negotiations, member states have not made any changes yet to the original Commission proposal on very high capacity networks.

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