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Speech - Competition for a Connected Continent

European Commission - SPEECH/13/1023   05/12/2013

Other available languages: none

European Commission

Neelie Kroes

Vice-President of the European Commission responsible for the Digital Agenda

Competition for a Connected Continent

ECTA Regulatory Conference 2013 /Brussels

5 December 2013

To add your comment to this speech, see the social version of the speech here

The Single Market remains Europe's crown jewel, and completing it a main objective of the European Commission.

Communications services should be no exception. Yet, today, EU telecoms is fragmented: with distinct national markets, diverging implementation of EU rules, and high barriers to entry. That applies for all of the vital rules affecting the sector, from authorisations to operate; to access to inputs; to consumer protections.

And what is the end result? Communicating across borders is complex and costly. It is too hard to replicate services, or ensure quality and continuity in different markets. For providers and their customers.

And that has an impact on the single market freedoms that Europeans ought to enjoy. Citizens and businesses.

How do you explain why it costs more to call or text across borders than within them, even when there is no objective extra cost? How do you explain why the seamless service they expect drops off when you change country? How do you explain to an innovative start-up why they face different costs and diverging quality to provide the same services? And how does that fit with the promise of a fast-developing digital world; with new gadgets and new services appearing all the time? Will connected cars have to pay roaming surcharges? Come on. That is not what a single market is about.

I think we all recognise why this is a problem. The world is changing - with more and more services going digital. Our competitiveness relies on modern, high-speed networks. Performance in every sector needs fixed and mobile broadband, to deliver the connectivity our economy craves. And that in turn needs a strong, healthy telecoms sector, able to innovate and invest within a dynamic and competitive market.

The EU's most senior leaders have now agreed on the centrality of connectivity to our economy – and the essential role of the telecoms sector in assuring it. The October European Council acknowledged the urgent need for an integrated single market, for both digital and telecoms.

It recognised the role of a stable EU-wide legal framework: to overcome fragmentation, promote competition and attract private investment. And it welcomed our legal proposals on a "Connected Continent", calling on the legislator to deal with it intensively. Because we cannot afford to wait around: we need to act fast, and ensure now rules that are fit for the future.

I don´t need to explain to you the detail of that proposal: you already know what's in it. But let me remind you that it is a package both balanced and realistic.

Challenger and alternative operators have long been valuable guarantors of competition. I don't intend to change that. And under this proposal, we would cut the administrative burden for operators present in several Member States, better coordinate spectrum and have more consistent and predictable consumer protection rules. All things that can benefit you.

Because, at a time when Europe's businesses and 500 million citizens have changing and varied needs, we need to make it easy for you to think big, expand your horizons, and dynamically adapt to match and tailor.

Competition counts: the recommendation on costing and non-discrimination already provides stricter non-discrimination guarantees, like never before. And now, beyond that, high-quality regulated fixed access products could further assure access-seekers, so you can enter markets on stable terms, across Europe. To provide services not just to households, but also to business users: who are often present in several countries and are, after all, about half of the telecoms market. I know ECTA members have long called for measures to enable that expansion and promote further competition. And that is exactly what we have put forward in this proposal.

I know that not everyone fully embraces every aspect of this package. So let's talk about roaming. Because I am clear that roaming surcharges within the EU have to go. They are an irritant and an anomaly, disrupting our single market, and giving you a bad name with your own customers. One way or the other, they are on their way out.

What I have put forward is a way to do that both voluntary and market based. Giving operators – whatever their size - incentives to enter roaming alliances, so they can reduce costs and profitably offer "roam-like at home" to their customers, for free, across the EU. We are limiting the risk of price arbitrage by ensuring “reasonable use”. Our proposal is the best way to get there.

The regime is optional: should you choose not to follow it, you fall back on existing roaming obligations, like decoupling and "local break out".

Personally I think you would then miss out on a great opportunity – the chance to offer a great product that people will value. But that would be your decision to make.

I believe that approach can fix the roaming problem once and for all. But I am clear that, if the roaming problem is still there by the end of 2016, more intrusive measures will be unavoidable. So it is up to you; the risk of greater regulation is always there.

And let me also remind you: on net neutrality, I am proposing a balanced approach. Prohibiting the blocking and throttling that obstructs competition. And allowing new, innovative specialised services — only where they do not impair the internet for everyone else.

That is our package to ensure a connected continent. As you'll know, the legislators have already started their work. Let me stress three points at this stage.

First, the Commission is no longer the only player: the game is now wide open. If you value these measures, it is your time to fight for them too. The European Parliament has approached this proposal with great energy, which I applaud. And it is also considering significant changes, of which some are particularly relevant to ECTA members.

I know you support some of these changes. I know you have concerns about others, and that is indeed part of the negotiation process. But as it stands we risk losing things that you value, for example standardised access products, particularly important to business users. I realise there are different views among operators. But it's clear to me the status quo in this sector is not an option: if you agree with me, make that voice heard loud, clear and specific.

Second, the proposal is a strategic approach.

Targeting pressure points, now. Focusing on the barriers that stop the market from developing right, now. Giving that market a push in the right direction, now. Not by tearing up the rulebook and starting again, but complementing the existing framework.

Because, alongside putting this regulation in place quickly, we can also prepare the ground for a wider review. These are not alternatives, but parallel complements. But make no mistake: such a review will take time. And we cannot afford to wait; we need to address the bottlenecks to digital growth NOW. With the economy where it is, with technology where it is, with the rest of the world marching on quickly, we need to act urgently.

Because, ultimately, it's about giving the sector the framework it needs to face the future.

Fundamentally, this sector is changing, and business models need to change too. Then and only then can we seize the huge opportunities of growing, diversifying digital demand.

And you can be part of that success. You can be the challengers, more agile, more capable of seizing tomorrow's opportunities, investing in them, and adapting to meet them. Not clinging on to dated and declining revenues like roaming. Let's be future-proof and strategic, not tactical and backward-looking.

The third point I want to make: this is a package.

Only as a package can we create the tipping point we need: one that allows the market to evolve towards a competitive, true single market. Only this coherent set of measures taken together can do that, from cross-border consistency, to sound governance, to fairer prices consistent with a single market. And one objective above all: to overcome fragmentation.

The European Parliament is advancing quickly and I look forward to discussions on the scope and precise proposals in their draft reports. Combined with the momentum from Presidents and Prime Ministers in the European Council, I am very hopeful that we can get these rules in place and give our economy the digital boost it needs: fast. I hope you want this too - and that the voice of alternative operators will be heard to push for it.

Thank you.


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