EU would be wrong to regulate WhatsApp like it does Vodafone, says expert

Out-Law Analysis | 03 Mar 2016 | 10:03 am | 2 min. read

OPINION: EU policy makers would be wrong to regulate 'over-the-top' (OTT) communication services like Skype and WhatsApp in the same way as they do traditional telecoms operators like BT and Vodafone.

This is because the type of services provided by telecoms operators and OTT communication service providers are different and because there are different business models in operation. This should be accounted for in the regulatory framework.

The regulatory gap that exists between traditional telcos and OTT providers at the moment is a factor that threatens required investment in the digital infrastructure of tomorrow. Major differences arise in the way rules relating to privacy and also in the sphere of communications surveillance are applied, for example.

These differences have been highlighted many times by groups representing traditional telecoms operators. They want OTT providers to pay towards the costs involved in operating the network upon which they rely and towards the investment required for future network infrastructure.

However, making all telcos and OTT providers subject to the same rules is not the solution. This would be both impractical and pose a risk to innovation.

The relationship between telcos and OTT providers is addressed in a new report published by BEREC, which is the body that represents all the national telecoms regulators in the EU.

BEREC's report highlighted deficiencies with the scope of telecoms regulations at the moment, and pointed in particular to the fact more sets of regulations apply to electronic communication services than to OTT services.

One reason for the difference stems from the way that electronic communication services are currently defined. As BEREC said, "concrete interpretation" of the term, and therefore scope of the rules relevant to such services, is left to regulators because existing there is no "clear-cut guidance" within the existing rulebook "on whether specific types of services fall within the … definition".

BEREC said that the definition of electronic communication services should be "clarified and/or reconsidered in order to ensure that it keeps pace with the current technological developments, that it is future proof and that still is the correct foundation that determines which services are regulated".

A simple recalibration of the definition, however, is impractical.

The regulatory framework needs to keep pace with innovation. By the time a new definition is agreed upon it is likely to be obsolete. If a redefinition is too broad it could also inadvertently catch a wider range of businesses than intended, possibly even in other markets.

In addition, there will never be a single definition that could encompass with sufficient granularity all the different types of services offered by the myriad of different communication service providers. BT, Vodafone, Skype, WhatsApp, Facebook, Netflix: all are either telecom operators or OTT service providers, but each company delivers different services in different ways.

Removing outdated regulations that apply to telcos, carefully crafting regulations specific to OTT providers and encouraging more managed service agreements between telcos and OTT providers would help address this risk.

These three steps would provide a more supportive environment to telcos in which to raise the funds needed to invest in next-generation networks without killing the rise of innovative new rival services. They should be developed by the European Commission as part of its ongoing review of EU telecoms rules.

Diane Mullenex is a telecoms law expert of Pinsent Masons, the law firm behind Out-Law.com.