Out-Law News 3 min. read
18 Jun 2015, 4:22 pm
The judgment by the Court of Justice of the EU (CJEU) means that providers of mobile internet networks and services cannot be forced, under current EU rules, to fund schemes that are designed to ensure that everyone in an EU country has access to mobile broadband services at an affordable price.
It said the 'universal service' rules only allow governments in the EU to require telecoms providers to fund the delivery of fixed-line internet services to citizens.
Telecoms law expert Simon Colvin of Pinsent Masons, the law firm behind Out-Law.com, said: "The UK government announced in March that it will require fixed-line internet service providers subject to universal service obligations to ensure everyone in the UK has access to broadband services at speeds of at least 5 megabits per second (Mbps). Currently only BT and KCOM in Hull are subject to universal service obligations."
"Separately, the government has outlined plans to 'bring ultrafast broadband of at least 100 Mbps to nearly all homes in the country' and suggested that mobile broadband technologies, alongside new and faster fixed-line internet service technologies, could be relied upon to achieve that goal. Whilst the government has not imposed universal service obligations with regards to the delivery of ultrafast broadband services, its policy does point to the growing role mobile broadband technologies will play in supporting better internet access for all in future," Colvin said.
Colvin said that, as a result of the CJEU's ruling, if the government imposed new universal service obligations in the mobile environment in future, such as with regards to the availability of '5G' services, it could be constrained in developing innovative funding models with industry on the basis of this ruling on the EU's Universal Service Directive.
The CJEU said: "[The EU Universal Service Directive] … must be interpreted as meaning that the special tariffs and the financing mechanism provided for in … that directive respectively apply to internet subscription services requiring a connection to the internet at a fixed location, but not to mobile communication services, including internet subscription services provided by means of those mobile communication services."
"If those services are made publicly available within the national territory as ‘additional mandatory services’ … they cannot be financed, under national law, by a mechanism involving specific undertakings," it said.
The aim of the Universal Service Directive is to ensure that all citizens in the EU are able to access certain electronic communication services, including fixed-line internet services, of a certain quality and at an affordable price regardless of where they live, so long as competition is not distorted. It was designed to ensure that remote communities as well as busy towns and cities in the EU are served by electronic communication service providers.
The Directive gives EU governments the right in certain circumstances to require fixed-line internet providers to facilitate certain consumers' access to internet services on the basis of special tariffs, such as people on low incomes or with special social needs. EU countries can decide to require electronic communication service providers to share the costs for universal service initiatives if it is found that a company or companies asked to deliver on universal service "is subject to an unfair burden".
The Universal Service Directive does not apply to mobile internet providers, but EU countries are free, under the Directive, to "make additional services … publically available" in their jurisdiction. However, when doing so "no compensation mechanism involving specific undertakings may be imposed", according to the Directive.
In Belgium, two mobile telecoms companies Base Company and Mobistar challenged Belgian legislation that was set up to ensure certain categories of consumers could receive internet services, including mobile communication services and/or internet subscription services, on the basis of a special "social tariff". All providers of publicly available electronic communications services generating a certain level of turnover were required to contribute to the cost of the scheme.
Base Company and Mobistar claimed that the financing mechanism for the initiative breached the Universal Service Directive.
The CJEU said that whilst the Directive allows EU countries to "consider mobile communication services, including internet subscription services provided by means of mobile communication services, as additional mandatory services, for the purposes of … the Universal Service Directive", they cannot in those circumstances impose "a financing mechanism for those services involving specific undertakings".
"The UK government will need to consider carefully how it implements its ambitious broadband policies with the current constraints imposed through the Directive," Colvin said.