Legal action threat over single EU telecoms market risks overshadowing infrastructure sharing initiatives, says expert

Out-Law News | 28 Feb 2013 | 2:15 pm | 3 min. read

An "impassioned speech" by an EU Commissioner has highlighted the "growing frustration" in Brussels about the way in which telecoms regulation is being approached by member states, an expert has said.

Earlier this week Neelie Kroes, the Commissioner responsible for the EU's Digital Agenda, reiterated her intention to create a "digital single market" in telecoms and warned of the "damage" to the EU's competitiveness if EU governments failed to deliver that outcome. In a speech at the Mobile World Congress in Barcelona, Kroes warned that the Commission would use its "full Treaty powers" to force member states to implement their "legal commitments" with regards telecoms regulation.

Telecoms law specialist Jon Fell said that the "underlying threat" of legal action as a way of imposing a unified mobile telecoms market was the wrong approach for the Commission to take.

He said that the "current climate of conflicting national and corporate interests" make a single telecoms market "unlikely" and warned the Commission over the difficulties it would encounter if it sought to "ride roughshod" over member states' existing regulatory approaches. Those regimes take account of local planning laws and local community interests, Fell said.

The threat of legal action to impose a single telecoms market was, in this context, a "utopian approach" that risks the Commission's work towards improved sharing and licensing of spectrum and infrastructure "being lost sight of", Fell said.

Telecoms operators usually work on a national basis and claim that fragmented regulation and the high cost of building infrastructure abroad make this the best way to operate. Where they operate in a number of countries it is usually through subsidiaries.

However, the Commission has long sought a single EU telecoms market in the belief that it would increase competition, drive down prices for consumers and provide a more uniform level of access to services across the trading bloc. To that end it has previously called for more radio spectrum and other telecoms infrastructure sharing to help encourage telecoms providers to deliver cross-border services. It is also due next month to detail further proposals specific to wireless technology.

Fell said that Kroes' threat of legal action against member states that fail to implement its proposals was simplistic, as it overlooked the local community interests which relate to issuing permits and local planning regimes that exist and have to be complied with when installing telecoms infrastructure.

"Kroes' speech signals a hardening of the Commission's line regarding a single EU telecoms market," Fell said. "She bemoans the slashing of public funds from the recent EU budget negotiations to help deliver this objective and her speech is a plea for industry to push this forward."

"However, Kroes is critical of the way in which EU member states have approached the issue of telecoms regulation and of political attitudes to driving forward the Commission's initiatives. The EU has talked tough before. Prior to the telecoms reforms in 2009 the Commission pushed for the power to override regulators and impose measures relating to telecoms rollout, but the powers were opposed and it has been left with limited scope to make recommendations relating national telecoms regulation."

"The reason it will struggle to back up threats to intervene in telecoms regulation now is because of the inherent national and local interests which create barriers to telecoms infrastructure being deployed," Fell said.

"People tend to oppose the installation of wireless infrastructure, such as telecoms, next to schools, hospitals and in their own back yard, despite guarantees regarding the safety of the technology. This culture of nimbyism presents a huge challenge that the European Commission cannot ride roughshod over. The desire of the Commission to encourage by regulatory means infrastructure sharing, especially if this is in relation to active as opposed to passive infrastructure, is to be applauded if helps reduce the amount of additional infrastructure needed," he added.

Kroes said that the EU is to devote €50 million of public funds for research into '5G' mobile technology, which would be the next generation of technology for delivering mobile broadband services that expands on the existing wireless '4G' technologies. She said she wants 5G technology to be available by 2020. A range of private sector businesses, including BT, Telefonica and Nokia, will be involved in the research projects, the Commission said.

"I want 5G to be pioneered by European industry, based on European research and creating jobs in Europe – and we will put our money where our mouth is," Kroes said in a statement.