In the second plenary meeting of the year, which took place on 12–14 June in Ghent, Belgium – BEREC launched four new consultations to develop guidelines across a range of topics. Other significant developments included the adoption of a document on the response to the European Commission for the review of the Recommendation on Relevant Markets, which is increasingly likely to see the deregulation of call termination markets; and the opinion on the functioning of the roaming market, which claims Roam-Like-At-Home as having been a clear success. BEREC also hosted a workshop on the review of the guidelines to apply the Regulation on net neutrality, which highlighted possible changes in light of the development of 5G and exposed potential imbalances between tech giants and small startups in accessing mobile operators’ zero-rating offers.
BEREC sees no need for a separate physical infrastructure access market
The European Commission is currently undertaking a review of the Recommendation on Relevant Markets. The Recommendation informs national regulators’ process in identifying and regulating electronic communications markets. Since its first adoption in 2003, it has been reviewed twice. Both times, the EC has reduced the number of markets susceptible to ex-ante regulation (from 18 to seven in 2007, and from seven to four in 2014). The review is due to be completed by December 2020, in line with the provisions of the new European Electronic Communications Code (EECC). BEREC responded to the public consultation for the next review, which the EC ran between February and May 2019.
In its response, BEREC mainly addressed four issues. Firstly, with regard to Markets 1 and 2 (fixed and mobile call termination, respectively), BEREC is not against their removal from the list of regulated markets, as long as the EC provides guidance on how NRAs can address non-price related remedies such as access, transparency, non-discrimination obligations, and ancillary services. It is worth remembering that the EECC provides for the European Commission to adopt a Euro-rate, valid for all EU countries, for fixed and mobile call termination. This means NRAs will no longer need to develop cost models to determine termination rates for their respective markets. Secondly, The three remaining markets (3a, 3b, and 4) should, in BEREC’s view, continue to be regulated, due to high and non-transitory barriers to entry; this is unsurprising given the general state of markets 3a and 3b, which are mostly regulated across EU countries (particularly market 3a, whereas market 3b has seen a higher degree of deregulation in recent years). Thirdly, Markets 3a (wholesale local access) and 3b (wholesale central access) should remain separate, although the EC could provide guidance in an explanatory note to the Recommendation as to whether there is a case for defining a broader wholesale market. Fourthly, BEREC believes it is not appropriate to create a separate wholesale market for access to physical infrastructure, as it would require NRAs to undertake an analysis that would offer little material benefit. Nonetheless, considering what is happening in some member states, it would be appropriate to address the potential for a separate physical infrastructure market in the explanatory note of the Recommendation. It is worth noting that BEREC has published a report on the current status of physical infrastructure regulation, which finds that NRAs are generally comfortable with the current approach, although creating a separate market could solve some challenges that may arise in the future (e.g. technological changes, or increased infrastructure-based competition which may no longer make markets 3a, 3b or 4 suitable to include access to physical infrastructure).
Roam Like At Home is considered a success, but there’s room for improvement
The plenary meeting also assessed the results of the Roam-Like-At-Home regime (RLAH), which removed mobile roaming charges within the EU. BEREC issued an opinion to the EC, which will feed into the EC’s review of RLAH to be completed by the end of 2019. BEREC finds that, two years into its implementation, RLAH should be considered a clear success, for five reasons:
High compliance: RLAH was implemented quickly, especially with regard to Fair Use Policy provisions (FUP) which ensured users could benefit from RLAH without delay;
A falling number of applications for derogation: the Regulation establishing RLAH provided for some exceptions, where operators could ask their NRA to apply surcharges if they demonstrated that RLAH would result in a loss. The number of applications decreased from 47 in 2017, to about 30 in 2019;
No significant impact on domestic prices: BEREC found that, despite concerns of possible waterbed effects due to the loss of retail revenue from roaming, in practice domestic retail prices have not been impacted, and the same can be said for roaming prices for the rest of the world;
Significant increase in volumes: for all countries, especially for data roaming, volumes have increased by about 600% in the last two years;
Wholesale rates well below price caps: on average, wholesale rates are well below the caps set in the regulation, and wholesale roaming prices have seen a sharp downward trend in recent years. In most countries, the price per GB has decreased by more than 70% between Q3 2016 and Q3 2018.
However, some challenges still need to be addressed. BEREC has identified four areas for improvement: Firstly, technological and quality restrictions are still in place in some cases, as consumers’ complaints have included lower speeds when roaming, and some operators do not allow roaming on 4G; secondly, RLAH has also led to an increase in cases of misuse and fraud (31 out of 91 MNOs, and 22 out of 31 MVNOs, said they were aware of misuses and frauds); thirdly, MVNOs have felt, to a certain extent, a negative impact (it is worth noting that MVNOs were vocal in advocating for lower wholesale rates when the regulation was introduced, and that they cannot offer inbound connectivity since they do not have their own networks); and fourthly, the arrival of 5G could require changes in the regulatory approach, to facilitate practices such as network slicing. BEREC proposes that the EC considers specific measures for the above issues, and more clarity about roaming for IoT/M2M services in light of the arrival of 5G.
Updated net neutrality guidelines coming by Q1 2020
BEREC held a workshop on 29 May 2019, as part of the review of its guidelines for the application of the Regulation on open internet access (net neutrality). The review will build on the Opinion BEREC issued on the application of the Regulation in December 2018, and on the consultation it ran in 2018. BEREC will now draft updated guidelines, on which it will run a public consultation starting in October 2019 (it aims to complete the review during Q1 2020).
The workshop provided stakeholders with an opportunity to share their views with BEREC on how the Regulation, and its implementing guidelines, have worked so far. Unsurprisingly, the session on how it related to 5G saw a lively debate, reflecting the current effort of industry to make sure that net neutrality rules do not restrict operators’ ability to carry out the network slicing practices necessary to realise the potential of 5G. Both Vodafone and ETNO/GSMA referred to the need to enable ‘permissionless innovation’, and asked to change the criteria of the ‘necessity test’ for traffic management based on the needs of each service and on market demand. In another session of the workshop, related to commercial practices, a representative of Selfie Networks (a company which facilitates partnerships between telcos and application providers), noted that small tech companies are facing difficulties in being included in zero-rated offers. Telcos are more likely to include established services (e.g. Apple Music, Spotify) which ends up biasing user choice and creating disadvantages for non-zero rated apps. These remarks were echoed by a representative of EDRI, an association of digital rights for European citizens, who noted that there is currently no guarantee that applicants to zero-rating programs will even get an answer. While there is currently no indication that BEREC or the EC will take this feedback on board, it is possible that they could look at changes to reduce the risk of discrimination and to facilitate smaller players’ participation in zero-rating programmes.
