TELECOM SINGLE MARKET – CHALLENGES AND CONCERNS

DOMAGOJ MARIČIĆ, CROATIAN REGULATORY CROATIAN REGULATORY AUTHORITY FOR NETWORK INDUSTRIESAUTHORITY FOR NETWORK INDUSTRIES

(HAKOM)(HAKOM)

SeptemberSeptember 2299thth, 2014, 2014

9.9.2014HAKOM © 2014 2

1.1. Introduction & ContentIntroduction & Content

Overview of the EC proposal of the TSM RegulationOverview of the EC proposal of the TSM Regulation

A brief description of the EU Ordinary legislative procedureA brief description of the EU Ordinary legislative procedure

Overview of the EU Parliament’s amendments to the TSM Overview of the EU Parliament’s amendments to the TSM proposalproposal

Recapitulation of key challenges and concerns Recapitulation of key challenges and concerns

9.9.2014HAKOM © 2014 3

2. 2. TSM Proposal - GeneralTSM Proposal - General

In September 2013 the EC submitted proposal of the TSM In September 2013 the EC submitted proposal of the TSM Regulation to the Council and European Parliament (EP)Regulation to the Council and European Parliament (EP)

Planned date for the adoption – spring 2014 i.e. before the end of Planned date for the adoption – spring 2014 i.e. before the end of the EP and EC mandatethe EP and EC mandate

Planned entry into force – July 2014 and July 2016Planned entry into force – July 2014 and July 2016

Aim - completion of a fully functioning Digital Single Market by Aim - completion of a fully functioning Digital Single Market by 20152015

Desired impacts - growth & jobs; better productivity; benefits for Desired impacts - growth & jobs; better productivity; benefits for citizens; a consolidation of telecoms sectorcitizens; a consolidation of telecoms sector

9.9.2014HAKOM © 2014 4

3. 3. TSM Proposal – Main elementsTSM Proposal – Main elements

Single EU authorizationSingle EU authorization

European inputs for high-speed broadbandEuropean inputs for high-speed broadband

Spectrum coordination and facilitating small cells for the wireless bb.Spectrum coordination and facilitating small cells for the wireless bb.

European virtual access products for the fixed bb.European virtual access products for the fixed bb.

• Net neutrality and Harmonized end user’s rightsNet neutrality and Harmonized end user’s rights

• RoamingRoaming

9.9.2014HAKOM © 2014 5

4. 4. TSM Proposal – Single EU authorizationTSM Proposal – Single EU authorization

Regime applicable only to “European electronic Regime applicable only to “European electronic communications providers (EU operator)” while pure domestic communications providers (EU operator)” while pure domestic providers stay within current national regimeproviders stay within current national regime

Wide notion of EU operator – undertaking established in EU Wide notion of EU operator – undertaking established in EU providing or intending to provide services directly or by means providing or intending to provide services directly or by means of one or more subsidiaries (subsidiary – any form of control of one or more subsidiaries (subsidiary – any form of control e.g. more than half the voting rights, right to manage affairs, e.g. more than half the voting rights, right to manage affairs, right to nominate more than a half of board)right to nominate more than a half of board)

Concept of a home Member State (for EU operator) and host Concept of a home Member State (for EU operator) and host Member States (for subsidiaries)Member States (for subsidiaries)

9.9.2014HAKOM © 2014 6

5. 5. TSM Proposal – Single EU authorizationTSM Proposal – Single EU authorization

Single notification to the home Member StateSingle notification to the home Member State

NRA of the home MS forwards information to the host MS and to NRA of the home MS forwards information to the host MS and to the BERECthe BEREC

Shared authority of the home and the host MSShared authority of the home and the host MS

Benefits for EU operators – thresholds for USO costs and Benefits for EU operators – thresholds for USO costs and administrative charges, EC veto power as regards regulatory administrative charges, EC veto power as regards regulatory obligationsobligations

9.9.2014HAKOM © 2014 7

6.6. TSM Proposal - European inputs, Spectrum coordinationTSM Proposal - European inputs, Spectrum coordination

Detailed regulatory principlesDetailed regulatory principlesRelevant criteria to be taken in account for use of radio Relevant criteria to be taken in account for use of radio spectrum spectrum Harmonization of authorization timetables and durations by EC Harmonization of authorization timetables and durations by EC implementing actsimplementing actsCoordination of authorization procedures and conditions Coordination of authorization procedures and conditions ("Article 7" procedure for spectrum authorization measures)("Article 7" procedure for spectrum authorization measures)Access to radio local area networks Access to radio local area networks Deployment and operation of small-area wireless access points Deployment and operation of small-area wireless access points Radio spectrum coordination among Member StatesRadio spectrum coordination among Member States

9.9.2014HAKOM © 2014 8

7. 7. TSM Proposal - European inputs, European virtual access TSM Proposal - European inputs, European virtual access productsproducts

Common features for European virtual broadband access Common features for European virtual broadband access products – recommended remedyproducts – recommended remedy

Quality across the Union, interoperability, end-user focus, cost effectiveness, Quality across the Union, interoperability, end-user focus, cost effectiveness, operational effectiveness, security & privacyoperational effectiveness, security & privacy

European assured service quality connectivity products (ASQ) European assured service quality connectivity products (ASQ) upon reasonable requestupon reasonable request

9.9.2014HAKOM © 2014 9

8.8. TSM Proposal - Net neutrality and harmonized end users’ TSM Proposal - Net neutrality and harmonized end users’ rightsrights

Introduction of the “net neutrality” principle and allowed Introduction of the “net neutrality” principle and allowed exceptionsexceptions

Full harmonization of end users’ rightsFull harmonization of end users’ rights

See separate presentations on these topics!See separate presentations on these topics!

9.9.2014HAKOM © 2014 10

9.9. TSM Proposal – RoamingTSM Proposal – Roaming

Free incoming roaming calls as of 1 July 2014Free incoming roaming calls as of 1 July 2014

Operators may introduce optional regime “Roam like at home” Operators may introduce optional regime “Roam like at home” (RLAH)(RLAH)

Wholesale costs through bilateral or multilateral roaming Wholesale costs through bilateral or multilateral roaming agreements (“Roaming alliances”)agreements (“Roaming alliances”)

Subject to reasonable use criteriaSubject to reasonable use criteria

Exemption from roaming decoupling and retail capsExemption from roaming decoupling and retail caps

Outside RLAH offers - retail caps applyOutside RLAH offers - retail caps apply

9.9.2014HAKOM © 2014 11

10. 10. Ordinary legislative procedureOrdinary legislative procedure

Joint adoption (co-decision) by the European Parliament (EP) Joint adoption (co-decision) by the European Parliament (EP) and the Council of a regulation, directive or decision on a and the Council of a regulation, directive or decision on a proposal (usually by the EC)proposal (usually by the EC)

Stages: First reading, possible 2Stages: First reading, possible 2ndnd and 3 and 3rdrd,, reading + conciliation reading + conciliation

First reading – joint examination of a proposal in the EP First reading – joint examination of a proposal in the EP (committees) and Council (working groups)(committees) and Council (working groups)

No time limits for the 1No time limits for the 1stst reading reading

9.9.2014HAKOM © 2014 12

11. 11. Ordinary legislative procedureOrdinary legislative procedure

11stst reading - EP adopts its position. If Council accepts the EP’s reading - EP adopts its position. If Council accepts the EP’s position a proposal is adoptedposition a proposal is adopted

11stst reading - If Council does not approve the EP’s position, than reading - If Council does not approve the EP’s position, than 2nd reading2nd reading

22ndnd reading - 3 (+1) months for the EP to approve, to reject or to reading - 3 (+1) months for the EP to approve, to reject or to amend the Council’s position amend the Council’s position

22ndnd reading - 3 (+1) months for the Council to approve or reject reading - 3 (+1) months for the Council to approve or reject the EP’s amendmentthe EP’s amendment

33rdrd reading/Conciliation – conciliation committee (6 weeks), reading/Conciliation – conciliation committee (6 weeks), agreement on a joint text (6 weeks), adoption of the text (6 agreement on a joint text (6 weeks), adoption of the text (6 weeks)weeks)

9.9.2014HAKOM © 2014 13

12. 12. Ordinary legislative procedureOrdinary legislative procedure - TSM - TSM

Agreement on the 1Agreement on the 1stst reading - the Council without reading - the Council without modifications adopts the text adopted by the EP in its position modifications adopts the text adopted by the EP in its position at 1at 1stst reading reading Agreement on the 2Agreement on the 2ndnd reading – the Council adopts position at reading – the Council adopts position at first reading which is negotiated with the EP; EP approves the first reading which is negotiated with the EP; EP approves the Council’s positionCouncil’s positionAgreement on the 2Agreement on the 2ndnd reading – the Council adopts position at reading – the Council adopts position at first reading, EP adopts negotiated position, and the Council first reading, EP adopts negotiated position, and the Council approves the EP’s positionapproves the EP’s positionTo reach agreement - “trialogue” between Council, EP, ECTo reach agreement - “trialogue” between Council, EP, ECTSM – EP position (amendments) adopted. There has been no TSM – EP position (amendments) adopted. There has been no agreement. The Council has not yet adopted its position in the agreement. The Council has not yet adopted its position in the 1st reading.1st reading.

9.9.2014HAKOM © 2014 14

13. 13. EP’s amendments on the TSM ProposalEP’s amendments on the TSM Proposal

On 3 April 2014 EP (plenary) adopted its position at first readingOn 3 April 2014 EP (plenary) adopted its position at first readingSingle EU authorization – deletedSingle EU authorization – deleted

Amendments to the Authorization Directive - notification requirement only if Amendments to the Authorization Directive - notification requirement only if MS explicitly wish to keep it, notification via harmonized template only MS explicitly wish to keep it, notification via harmonized template only to BERECto BEREC

Spectrum coordination – supported with amendmentsSpectrum coordination – supported with amendmentsVirtual access product and ASQ product – deletedVirtual access product and ASQ product – deleted

Proposed - “Wholesale high-quality access products allowing the provision of Proposed - “Wholesale high-quality access products allowing the provision of

business communications servicesbusiness communications services””• Harmonized end users’ rights and Net neutrality – see separate Harmonized end users’ rights and Net neutrality – see separate

presentationspresentations

9.9.2014HAKOM © 2014 15

14. 14. EP’s amendments on the TSM ProposalEP’s amendments on the TSM Proposal

Roaming – no roaming alliances, full RLAH as of 15 December Roaming – no roaming alliances, full RLAH as of 15 December 2015 subject to a “fair use clause”2015 subject to a “fair use clause”

Consumers must be in a position to confidently replicate the typical domestic Consumers must be in a position to confidently replicate the typical domestic consumption pattern – BEREC guidelines + EC implementing actsconsumption pattern – BEREC guidelines + EC implementing acts

If there is no level playing field between operators – EC If there is no level playing field between operators – EC legislative proposals by 30 June 2015. i.e. before abolition of legislative proposals by 30 June 2015. i.e. before abolition of retail roaming chargesretail roaming charges

Need to change the duration or lower the level of maximum wholesale Need to change the duration or lower the level of maximum wholesale charges or to provide for other arrangements to address wholesale charges or to provide for other arrangements to address wholesale market problems including by a significant reduction of the mobile market problems including by a significant reduction of the mobile termination rates.termination rates.

9.9.2014HAKOM © 2014 16

15. 15. Key challenges and concernsKey challenges and concerns

TSM proposal overlaps with the framework review due for 2015TSM proposal overlaps with the framework review due for 2015

Aims of the telecom market consolidation and of the promoting Aims of the telecom market consolidation and of the promoting of the EU global competitiveness can’t be reconciled with the of the EU global competitiveness can’t be reconciled with the aim of protection of the competitionaim of protection of the competition

Spectrum harmonization effectively means a transfer of powers Spectrum harmonization effectively means a transfer of powers from Member States (subsidiarity, proportionality)from Member States (subsidiarity, proportionality)

Abolition of roaming charges may lead to higher domestic Abolition of roaming charges may lead to higher domestic pricesprices

Legal uncertainty of the TSM proposalLegal uncertainty of the TSM proposal

18.04.23HAKOM © 2014 17

Thank you for your attentionThank you for your attention