New report on the "Options for the Ubiquitous Internet Society"

The Commission has published an external study prepared by Rand entitled
"Trends in connectivity technologies and their socioeconomic impacts".
This study set out to review technology trends that relate to the notion of an emerging
ubiquitous Internet Society – renamed in the study as ‘Internet of X’. It aims at giving food for thought to elaborate new strategies for the period 2010 - 2020 after the termination of the i2010 programme. Suprizingly, the report also try to set a balance between ex ante and ex post regulation.

Some interesting quotes:

"Anticompetitive behaviour can’t always be detected or prohibited ex ante, but ex post remedies (after lockin has occurred) may be too late, and there may be no counterfactual evidence to demonstrate that alternatives are viable if lock-in is widespread. Moreover, many of the specific activities that firms might use for predatory purposes (e.g. proprietary standards, low “penetration” pricing, etc.) are also essential in order to attract complementary content and services to Internet platforms capable of providing effective competition. Therefore, conventional antitrust policy may be less effective than consumer protection policy or supporting activities that enable users to coordinate moves to superior entrants, and participatory self-regulation may be more effective than IPR policy in deterring or overturning “stealth patents” in public standards".

and in relation to spectrum:

"Spectrum allocation as powerful ex ante tool. Traditional ex ante regulation and ex post control of the wireless domain is increasingly difficult. Spectrum allocation can be a substitute (ex ante) policy instrument to support innovation, new technology, and more competition. However the use of auctions has lead to mixed outcomes in balancing different policy objectives (technical, economic, and societal) and much available spectrum is hoarded or left idle. Allocation chanisms are shifting towards a combination of market-based regulation, societal regulation and regulatory withdrawal’. The EU may monitor the effectiveness of these mechanisms and also support policy convergence and standards to support a strong internal market for hardware in Europe."

ECTA Conference.

The annual ECTA regulatory conference will take place 7-9 December 2009. More info here. Together with the IBA conference on competition and telecommunications (and to a lower extend the IBC conference), this is probably the biggest event on EU telecom regulations.

Kroes for DG Infosoc!

Rumors confirmed! As such, there is little doubts that N. Kroes will fit well in Reding's shoes: same consumer approach, same style.

She also has some sector expertise, having been in the board of O2, New Skies Satellites and Lucent.

Thus, I believe she is also unlikely to lower the Commission's stance on Roaming or MTRs. Yet, it remains to be seen whether she would side in favor of competitive operators or incumbents. In this regards, her previous comment that 2 is not enough (see below) could be remembered in due time when discussing appropriate level and symmetry for MTRs or in-building fiber-networks sharing...

It also remains to be seen what are her plans for media and copyrights.

For the time being here is her CV:

Personal

Born: July 19, 1941Rotterdam, The Netherlands

Education

Erasmus University, RotterdamDoctoraal Examen Economie (Masters of Science in Economics) 1965

Previous employment

2004-2009: Commissionner in charge of DG Competition

2000 - September 2004 : advisor/board member (inter)-national companies

1991 - 2000 : President Nyenrode University

1989 - 1991: Advisor to the European Transport Commissioner, Brussels, Belgium

1982 - 1989 : Cabinet Minister of Transport, Public Works and Telecommunication

1977 - 1981 : Vice Minister of Transport, Public Works and Telecommunication

1971 - 1977 : Member of Parliament

1969 - 1971 : Member of the Rotterdam Municipal Council, Member of the Rotterdam Chamber of Commerce

1965 - 1971 : Assistant Professor Transport Economics, Erasmus University

Kroes for Infosoc DG?

Rumors are increasing that current commissionner for Competition Nelie Kroes might take over Reding's post in the next Commission...

EU Framework adopted.

Today the European Parliament finally adopted the telecoms package in third-reading vote following agreement on amendement 138 (see below). The package was approved with 510 votes in favour and 40 votes against, with 24 abstentions,. It consists of three directives: the better regulation directive modifying the current access and framework directives, a directive establishing the BEREC, and a directive on users rights and universal access obligations.

Member states will now have to implement the package into national law.

Parliament report on NGN

The parliament published a report prepared by WIK on NGN regulation.

It proposes 9 recommendations:

1. Adopt the pending Review package.

2. Make greater use of sub-national markets and/or sub-nationally differentiated remedies.

3. Refine and complete the draft Recommendation onNext Generation Access (NGA).
4. Develop a solid understanding of the societal benefits of migration to NGA.

5. Evaluate policy instruments that could be used to achieve greater deployment of fibre-based NGA.

6. Initiate a political discussion to establish goals, and means of achieving them.

7. Consider possible implementation of Bill and Keep call termination arrangements.

8. Monitor the migration to IP-based interconnection.

9. Make more high quality spectrum available for fixed and mobilewireless broadband access.

ECJ decision in telia/Sonera

The European Court of Justice today gaves its decision in the TeliaSonera/iMEZ dispute. This dispute arose following TeliaSonera's refusal to provide SMS and MMS interconnection to iMEZ on the basis of the fact that it was not registered in Finland and was not a provider of public electronic communication networks.

The reasoning of the Court is quite interesting:

First, it adopts a restrictive view. The ECJ ruled that interconnection obligations cannot be applied to operators other than those designated by the national telecoms regulator as running public communications networks.In particular, the framework "precludes national legislation in so far as it does not restrict the possibility of relying on the obligation to negotiate on the interconnection of networks solely to operators of public communications networks."

Second, the Court is more lenient. The obligation to negotiate is independent of whether the undertaking concerned has significant market power, and does not entail the obligation to conclude an interconnection agreement, but merely an obligation to negotiate such an agreement and interconnection obligations should also apply "where an undertaking which does not have significant market power proposes interconnection to another undertaking under unilateral conditions likely to hinder the emergence of a competitive market at the retail level." The Court also emphasize the reciprocal nature of interconnexion agreements. In my view, this suggests that interconnection obligations applies as much to the conditions of the services provided by the operator requesting interconnection than to the services provided by the operator to which interconnection is requested.

Third, the Court is even more lenient. First, based on the any-to-ant obligation, the ECJ states that a NRA may require an undertaking which does not have SMP but which controls access to end-users to negotiate in good faith with another undertaking for either interconnection of the two networks concerned if the undertaking which requests such access must be classified as an operator of public communications networks. This is fairly logical in view of the above. However, the ECJ also adds that NRA can require such undertaking to negociate for interoperability of SMS and MMS message services if the undertaking which requests such access does not qualify as an operator of public communications networks. Thus, on the basis of the any-to-any obligations, the restrictive bniew of point 1 is annuled by the extensive view in point 3.

Here is the wording of the answers to the Court's questions:

1. Article 4(1) of Directive 2002/19/EC of the European Parliament and of the Council of 7 March 2002 on access to, and interconnection of, electronic communications networks and associated facilities (the ‘Access Directive’), read in conjunction with recitals 5, 6, 8 and 19 in its preamble and with Articles 5 and 8 thereof, precludes national legislation such as the Communications Market Law (Viestintämarkkinalaki) of 23 May 2003 in so far as it does not restrict the possibility of relying on the obligation to negotiate on the interconnection of networks solely to operators of public communications networks. It is for the national court to determine whether, having regard to the status and the nature of the operators concerned in the main proceedings, they may be classified as operators of public communications networks.

2. A national regulatory authority may take the view that the obligation to negotiate an interconnection has been breached where an undertaking which does not have significant market power proposes interconnection to another undertaking under unilateral conditions likely to hinder the emergence of a competitive market at the retail level where those
TELIASONERA FINLAND I - 17
conditions prevent the clients of the second undertaking from benefiting from its services.
3. A national regulatory authority may require an undertaking which does not have significant market power but which controls access to end-users to negotiate in good faith with another undertaking for either interconnection of the two networks concerned if the undertaking which requests such access must be classified as an operator of public communications networks, or interoperability of SMS and MMS message services if that undertaking is not covered by that classification.

agreement on amendment 138.

Members of the "conciliation committee," between the Parliament and the Council reached an agreement on the last outstanding bone of centantion in the draft regulatory framework, namely amendment 138 on the need to have judicial authorization for cutting off consumer's internet access. The all issue is very much linked to the adotpion of the hadopi law in France which allowed to cut off the internet access without ex ante judicial review. The UK is also expected to adopt similar legislation.

The wording of the compromise is not available but it seems to be referring to the need of fair and impartial ex ante procedure (without referring expressly to the judicial courts, thus suggesting an administrative court would be sufficient), the presumption of innocence and the right to be heard. Under those principles, the Hadopi II law risks to be held unlawful, since there is no audition foreseen.

The compromise reached is still subject to final approval by the parliament in plenary and by the Council. The plenary vote is scheduled for 23-26 November and the council's meeting on 26 October.

Digital dividend communication and recommandation

The Commission published a communication on "Transforming the digital dividend into social benefits and economic growth" and a recommandation on "Facilitating the release of the digital dividend in the European Union".

Currently, this is the status on the switchover:

- switch off completed:BE (Flanders) , DE, FI , LU, NL, SE
- switch-off date end 2010 or earlier: AT , DK, EE, ES, MT , SI
- switch-off before end 2012: BE (Brussels and Wallonia) , BG, CY, CZ, EL , FR, HU, IT, LT, LV, PT, RO, SK, UK
- switch-off after 2012 or no confirmed switch-off plans available: IE, PL

The Recommandation requires Member States to :

- take all the measures necessary to ensure that all terrestrial television broadcasting services use digital transmission technology and cease using analogue transmission technology on their territory by 1 January 2012;

- support regulatory efforts towards harmonised conditions of use in the Community of the 790-862 MHz sub-band for electronic communications services other than, and in addition to, broadcasting services, and refrain from any action that might hinder or impede the deployment of such communications services in that sub-band.

The Communication calls for strategic actions:

1 to decide, following a debate with the European Parliament and Council, whether and when all Member States should open the 790-862 MHz sub-band for uses other than high power broadcasting;

2 to adopt a common EU position, to be endorsed by the European Parliament and Council, in future international negotiations on the digital dividend;

3 to consider requiring all Member States to apply a minimum level of spectrum efficiency for future uses of the digital dividend.

4 to allow further increases by using the "white spaces", i.e. the unused spectrum between two TV coverage zones;

5 to ensure the smooth migration to other spectrum bands of existing applications operating in the same Ultra High Frequency spectrum as secondary uses, such as wireless microphones;

6 to facilitate research in order to improve future equipment's capability to use the digital dividend spectrum

Now, the Commission will define the harmonised technical conditions for the use of the 790-862 MHz sub-band for new services and conduct a debate with the European Parliament and the Council on its proposed strategic actions in view of a political agreement in 2010. The point 4 to 6 above will be further discussed with industry and consumer representatives.

Consultation on a Digital Single Market for Creative Content Online

The Commmission published for consultation a paper encapsulating its "reflection on a Digital Single Market for Creative Content Online".

This follows two previous consultations in 2006 and 2008. It also follows the conclusion of the a stakeholder discussion group named "Content online platform"
(This was the "Reding stakeholer group" - not to be confused with the "Kroes" stakeholder group on online commerce/music which recently also adopted two joint
statements).

The mutliplication of those platforms and consultations (3 in 4 years) suggest that the EU is till fighting to determine a common vision (not to say even a strategy) to adress the online markets.

Answers to this latter consultation should be provided by January 5th.

Directive and decision on 3G in GSM frequencies adopted

The Directive modernising the GSM Directive to allow 3G and 4G in GSM frequencies has been published yesterday in the Official journal. This follows the agreement of July (see post below). The Commission also published a decision which set outs the technical parameters for the co-exietnce of 2G and 3G systems in the same bands.

The new rules allow the introduction of UMTS in the GSM bands. LTE will alos be allowed by the Commission when it has proven compatible with GSM and UMTS.

The process of opening up frequencies is already on its way (if not achieved) in numerous EU countries (e.g., Belgium, France, Sweden). National administrations have six months to transpose the Directive and to implement the Decision so that the GSM spectrum bands are effectively made available for 3G.

In this process, the NRAs must examine possible distortions of competition, resulting from uneven spectrum allocation. Thus, it might trigger a refarming of the frequencies.

ERG Report on transition from ex ante to ex post regulation.

The ERG has published a report on the transition from sector-specific (ex-ante) regulation to competition law (ex-post).

The report concludes that NRAs have a role to play even when market are deregulated, amongst other in assisting a competition authority in monitoring whether effective competition in a market is maintained.

The Report covers:
- issues that may arise during the "transition period" foreseen under Article 16(3) of the European regulatory framework that enables a progressive withdrawal of SMP obligations once effective competition has been declared in the considered markets ;

- issues that may arise after the "transition period", once NRAs no longer intervene on account of significant market power regulation (Section 5).

The end of termination services?

In the ERG meeting in Switzerland earlier this month, the ERG advocated for the move towards BAK once NGN infrastructure is in place. According to the ERG press release,
"bill and keep is more promising that CPNP (calling party network pays) as a regulatory regime for termination for the long term".


Thus, the ERG is holding a Public Consultation on a Draft CP on NGN Charging Mechanisms/Long term termination issues. This approach is not novel: The ERG already published a consultation promotting Bill and Keep (BAK) for IP-interconnection which resulted in a common statement on a work program towards a common position.


From a legal point of view, it remains open whether BAK could actually be imposed under the current regulatory framework. From a practical viewpoint, it would be interesting to assess the consequences of imposing BAK in one country while CPP is applicable in others.

Responses should be sent to the ERG Secretariat by 10 December 2009.

It is noteworthy that the Commission recently launched a call for tender for a study on "the future of interconnection charging in Europe, the purpose of which is to "analyse the likely evolution as well as the impact of an introduction of "Bill and Keep", among other interconnection charging methods, on the migration process towards IP network interconnection, assuming a lowering of network termination fees in the medium term, and to identify any necessary regulatory requirements at national and European levels so as to avoid regulatory fragmentation and to ensure the appropriate level of co-ordination in regulatory intervention across the EU".

OECD Report published

Earlier this months, the OECD published its communication outlook which presents the most recent comparable data on the performance of the communication sector in OECD countries and on their policy frameworks. It contains usefull pricing comparaison. Of course, those are not immune of (numerous) criticism but, to date, this is often the only source available for comparisons.