Roaming Rates Seen ‘Test Case’ on EU Power over Big Business
A rule capping European international mobile roaming rates could apply in June if the European Parliament (EP) and member states reach accord, Information Society & Media Comr. Viviane Reding said Thurs. Key aspects of the draft remain unsettled, but Reding urged lawmakers and govts. to move quickly. “This is a test case” that will let citizens judge EU institutions’ capacity to make good on promises or can be “stopped by the big industrial powers,” she told an EP hearing on implications of international roaming for consumers and industry.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
The EC wants to curb wholesale and retail international roaming fees to about what mobile phone users pay in their home countries. Under increasing EC pressure to cut rates, mobile operators have been doing so the past year or so, but Reding said yesterday they're still not satisfactory. Most consumers still pay 1.50-2.00 a minute for roaming across Europe, she said. Even special packages touted by operators aren’t always fair, she said, urging MEPs to “read the small print.”
Last month, the U.K. and France proposed to soften the plan with a “sunrise clause” giving operators 6 months to cut prices to an acceptable level or face caps (CD Dec 13 p7). That’s off the table, Reding said yesterday. A German proposal, said to be far tougher than the Anglo-French one, has some “interesting aspects” that the EC is analyzing, she said. She agrees with all plans that are simple and easy to put into practice, she said, but those requiring complex calculations shouldn’t be handled by lawmakers.
Capping international mobile roaming rates should weigh social justice for citizens as much as for industry, said EP Socialist party Chmn. Martin Schulz. Most people make less than MEPs, and a roaming rule must balance operators’ valid concerns and consumer demand, he said. The EC seems to side with big players to the detriment of consumers and small-to- midsize companies, Schulz said.
Reding agreed that economic benefits should be linked to social progress and admitted that the EC doesn’t always get the balance right. In the case of roaming rates, she said, legislative intervention is needed to align consumer politics and the internal market.
The aim in floating the proposal wasn’t to bruise smaller players already hurt by larger operators’ bargaining strength, Reding said. The wholesale price ceiling meant to avoid putting smaller companies at risk by setting a cap that leaves “room for maneuver” for competitive offers and packages. At the retail level, there is a simple tariff cap and operators must inform consumers of the price structure when they go abroad.
The specter of spam barrages by mobile firms alerting customers to cross-border price changes sparked a discussion of “push” vs. “pull” schemes. Consumers want pricing information sent to them rather than having to request it, said a consumer organization representative.
Reding fears salvoes of long, incomprehensible messages
- labeled as being sent on EU orders, she said. But a representative of T-Mobile Germany said operators won’t send those. If push models are easy for consumers to understand and aren’t considered spam, “I'm waiting for proposals,” Reding said.
The rule would affect mobile virtual network operators as well, Reding said. But it wouldn’t cover data services or SMS messages. As a developing market, data shouldn’t be regulated, she said. Some MEPs and national telecom regulators want SMS messages included, but that could delay the process by requiring the EC to perform a supplemental analysis and impact assessment of SMS price structures. Is it better to do that and hold up the rule or to revisit the issue during the required 2-year review? Reding asked.
Telecom ministers discussed the draft regulation and the German proposal Thurs., an EC spokeswoman told us. Socialist MEPs urged govts. not to “water down” EC proposals. Lawmakers heard that phone calls from N.Y. to Cal. are cheaper than from Paris to Brussels; meanwhile, mobile operators say prices dropped 26% the past year, the Socialist Group said later.