The wide discontent around the new European Electronic Communications Code is no good thing

On 6 June 2018, the EU announced a political agreement on the long-awaited European Electronic Communications Code. Stakeholders across the board are unhappy; however, the favourable treatment of wholesale-only networks could solve some long-standing problems facing wholesale access regulation over the last 20 years.

Luca Schiavoni, Senior Analyst at Assembly comments:

"Very often, when regulatory measures are widely criticised and seeming leave everyone unhappy, it often means policymakers have probably struck the right balance. This might not be the case with the newly approved European Electronic Communications Code however, which has seen both fixed incumbents and alternative operators alike voicing discontent, and left mobile operators disappointed by the unfulfilled promise of 25-years long spectrum licences.

Perhaps most striking is new retail price regulation to cap intra-EU call rates. Not only does this contradict the principle of a code which should have aimed to reduce regulation; it also intervenes in an area where operators will see a further reduction in revenues, after the introduction of roam-like-at-home, and customers are unlikely to see significant benefits as traditional call and text now have a wide variety of alternatives, often at no cost at all.

Telcos from both sides have also criticised the rules on co-investment, which should have been an incentive for operators to team up and build fibre networks by reducing the regulatory burden on such ventures. Incumbents claimed it isn’t enough, and alternative operators argue it is a dangerous reduction of competitive safeguards.

One winner however does seems to emerge and that is the wholesale-only model. Under the code, wholesale-only networks will benefit from less burdensome regulation. If this results in more wholesale-only networks across the EU, at least it will mean the end of the eternal headaches caused by the existing framework on wholesale access regulation, which has proved very hard to get right and to police across all member states. However, the challenge here will be to ensure that competition at the infrastructure level becomes (and stays) healthy."

Note to Editors

Comments can be attributed to the relevant analyst at Assembly.

Assembly is an independent research firm focused on the analysis of regulatory, policy and legislative developments that affect communications markets and the wider digital economy.

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