EU: Transport Council

The Parliamentary Under-Secretary of State for Communications, Technology and Broadcasting (Lord Carter of Barnes)
I am pleased to confirm the agenda items for which BERR has responsibility at the forthcoming Transport, Telecommunications and Energy Council (Telecoms Council) in Brussels on 27 November 2008.

The first substantive item on the agenda is the review of the EU regulatory framework for electronic communications networks and services, which is on the agenda for a political agreement. The French presidency is working hard to achieve agreement on the three elements of this package: amending the directives on a common regulatory framework, authorisation and access (often referred to as the better regulation directive); amending the directives on universal service, users’ rights and e-privacy (often referred to as the citizens directive); and the regulation on the new European Electronic Communications Market Authority.

Although, at present, we still expect a political agreement to be reached (on the whole package) there remains some doubt whether concerns by some member states on individual issues, such as on functional separation, may lead to the better regulation package to be rejected. There is more confidence on the citizen’s rights package and on the authority, where there have been significant improvements over the past few months better reflecting UK objectives. The proposed authority no longer has a role in spectrum management or in security and is a smaller, more efficient and independent body intended to be a disseminator of best practice to the 27 national regulatory authorities (NRAs). However, the Commission continues to propose the creation of an agency, giving rise to concerns that it would not be properly independent, and would risk becoming bureaucratic and inefficient. This is unacceptable to the UK, and I shall confirm this point.

The French presidency compromise text proposes the formalisation of the European Regulators Group (ERG) in Community law and supported by a separate secretariat. This is much more concordant with UK objectives for the creation of a small and efficient source of independent regulatory expertise which would not be subject to external influence. I will consequently be strongly supporting the presidency compromise text at the council, and urging other member states to do the same.

The citizens directive has also improved; it no longer risks extending privacy obligations on to private networks, includes greater powers for NRAs to protect citizens and consumers and contains more robust protection for disabled users.

The better regulation directive is where the French presidency is focusing its last-minute efforts, and the UK has also been working extremely hard to realise our own objectives. However, given the potential this package has to deliver real economic benefits to every European citizen and enterprise, and the time pressures we are under to reach an agreement before the current term of the European Parliament expires, there is a real need to balance our outstanding concerns against the need to give the presidency (now the French, shortly to be the Czech Republic) the necessary mandate to negotiate of behalf of all member states with the European Parliament and the European Commission.

In my interventions on the regulatory framework, I intend, while congratulating the presidency on its hard work and achievement in bringing forward these near-agreed texts, to express concern that on several substantive issues the approach being taken is conducive to neither enhanced competition across the European Union nor better regulation. I will particularly highlight, though this will depend on the exact detail in the final texts, our disappointment that there is not more robust language on the political independence of regulators, the liberalisation of spectrum or functional separation as an access remedy.

This package is subject to co-decision, so the final text voted upon at the council will have to be negotiated and compromised with the European Parliament, which shares many of the UK’s objectives. The Commission, which will also have a key role in these co-decision negotiations, also shares many of the UK’s objectives.

I will endeavour to keep you informed at these key stages, but subject to developments over the coming days I am likely to reserve the UK position on these elements of the package, pending a better outcome in the forthcoming discussions with the European Parliament and the European Commission.

Following this, there will be discussion on the general approach of proposals for amending the regulations on roaming on public telephone networks.

I fully support the aims and objectives of the proposal, with its rationale of consumer benefit and protection. I consider that the proposed price caps for voice calls and SMS messages strike the right balance between the consumers’ interest in low prices, and the operators' legitimate aspirations for the profit margins which are the foundation for sustainable and innovative services. It should be noted that these caps are concordant with those considered appropriate by both the European Regulators Group and our own telecoms regulator, Ofcom.

I also concur with the need to avoid “bill shock” for those downloading data on their mobiles when abroad, albeit tempered by the need to ensure that transparency, meaning the customer being aware of what they might be billed, can be provided without disproportionate cost or complexity. The UK has consequently submitted alternative text introducing a flat-rate charge which we consider will reduce the need for costly and possibly ineffective systems changes. I will be speaking in support of this approach and the rationale for it.

I also agree with the Commission that the rapid evolution of the data market, coupled with the existence of alternative sources of supply (such as wi-fi hotspots), means that it would be inappropriate to consider retail price controls for data at this stage. I will be speaking in support of the Commission on this point at council, should others move to include retail price controls for data.

At the House of Lords scrutiny committee hearing of 17 November 2008, I explained some of the history of the roaming regulation and that the national regulatory authorities had requested that the Commission act to address a cross-border issue that could not be tackled effectively by individual member states. I also explained why it was better to set a maximum price cap rather than an average one, as the latter would reduce the possibility of competitive pricing between suppliers. There are also practical difficulties associated with introducing an average cap as price controls effectively take money out of the market that could be used for investment and could lead to higher prices. We also discussed the possible waterbed effect of roaming caps; although the evidence is largely anecdotal at the moment, we have seen some increases in pre-pay domestic rates, but elsewhere competition has limited price increases. We will, of course, continue to monitor this situation.

This will be followed by a presentation from the Commission and discussion on second periodic review of the scope of universal services in communications networks. I am pleased that this is on the agenda as I recently deposited an Explanatory Memorandum about this communication. As you will be aware, I have welcomed the initialisation of this debate on broadband as a universal service, given the importance of broadband in the digital Britain work the department is engaged on. I am confident the debate will identify the best way forward for the European Union on this important issue, not least on such aspects of funding options, whether there should be a minimum capacity for all citizens and how member states should avoid anti-competitive situations.

During the council debate, I intend to briefly intervene to welcome the Commission communication and to outline some of the thinking taking place in the UK around the importance of broadband as an economic and social driver.

The final item of substance is adoption of the council conclusions on future networks and the internet. The UK objective for this agenda item is to ensure that the Commission proposals provide a suitable basis for ensuring that the future internet remains open and hence innovative and friendly. It is also necessary to set a marker ensuring that the six forthcoming proposals highlighted in the conclusions of the communication remain technology and service neutral.

I believe that it is important to engage all the relevant stakeholders in the broadband/next generation network debate and to examine all the relevant areas including private investment, economic and social value, regulation and the public sector. Currently, I am of the view that roll-out of NGNs in the UK should be private sector led and that the public sector should limit its interventions to addressing clear market failures.

On the “Internet of Things”, I believe that the seamless connection of devices and sensors to everyday items through fixed and wireless networks will have a profound impact on society in the future, particularly in the way that they interact with individuals, businesses and governmental organisations. I agree with the European Commission that security and privacy issues are of prime importance and that it is imperative that these features are designed into systems and infrastructures, and thus EU R&D funding should be directed into this area.

I do not plan to intervene in any debate there might be on this item unless there are any attempts to unpick the conclusions.