Our view on the European Commission’s proposal for a new Telecom Regulatory Framework

This week the European Commission has published its long-awaited proposal for a revision of the regulatory framework for Electronic Communications, as a part of its (also unveiled) vision of a Gigabit Europe. The new regulation adopts the form of a single Directive (named European Communication Code) which replaces the current four Directives of Framework, Access, Authorization and Universal Service.

We endorse the European vision that high speed connectivity is an essential element to boost our economy and enhance citizen’s lives and that for achieving this ambition massive private investment will be required.  For this reason, we agree that the current regulation requires a full overhaul aimed at creating a positive investment climate in Europe for the deployment of very high-capacity networks.

We note, however, that the proposed reform falls short of addressing the main issues that are refraining investment in Europe. While we welcome the flexibility elements embedded in the new access framework we still believe that the core elements of the regulatory model do not fundamentally change, since the SMP model is basically kept. 

Moreover, we have concerns that the new proposal increases complexity – for example, adding new layers of regulation at the European level on top of national ones –  and more room for market intervention, for example with the proposal for network mapping. We also believe that it still relies on excessive sector specific rules instead of a more horizontal approach, which also means that that Level Playing Field measures are very limited.  

This said, we appreciate that the new framework:

• Explicitly incorporates as one of its basic objectives the development and adoption of new high capacity networks, recognizing the importance of encouraging investment and infrastructure competition, and welcome the new provisions envisaged for the flexible application of the current rules under determined circumstances (co-investment, commercial agreements).
• Includes measures to relieve the sector from old unjustified burdens such as the financing of Universal Service as well as the redefinition of the electronic communications services, which makes sense from the point of view of the end-user and is technologically neutral, taking into account, to a certain extent, the role of new internet players (OTTs) and new ways to make business (e.g. data as a currency).
• Enhances the coordination procedures for spectrum management across the EU, harmonizes the duration of spectrum licences to at least 25 years and establishes a principle of “pay when available” for spectrum rights. If adopted, these concrete measures will increase consistency and facilitate the deployment of new mobile networks (i.e. 5G).

To sum up, while we feel comfortable about the stated intentions and objectives to be attained with the proposal we still feel that is not ambitious enough and that there is room for improvement in Legislative process which about to start. Let us be confident that with the input of the relevant stakeholders the European Institutions involved will find an outcome that is fit for this purpose. Telefónica looks forward to cooperating in this process.