The Position of the UKE on the Proposal for a Roaming Regulation - UKE

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The Position of the UKE on the Proposal for a Roaming Regulation

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2007-01-12

  

The Position of the Office of Electronic Communications on the Proposal for a Roaming Regulation

  

The Office of Electronic Communications welcomes the initiative of the European Commission to introduce a roaming regulation within the Community. This regulation may bring about substantial reductions in the level of wholesale and retail prices. A mechanism chosen, i.e. the form of a regulation as a Community law instrument binding in its entirety on the addressees and directly applicable in the Member States, is also justified.

The European Commission has proposed maximum price limits for the provision of roaming services for voice calls only at the retail and wholesale levels. The maximum wholesale charge for roaming calls depends on a category of the call. The basis for calculating the maximum wholesale charge is a mobile termination rate. The maximum charge for calls to a third country (home country and other EU countries) will be set at the level a mobile termination rate multiplied by three. The maximum charge for calls within the visited country will be set at the level of a mobile termination rate multiplied by two.

The Commission’s proposal also provides for retail regulation to be introduced, but only six months after the entry into force of the proposed measure. The maximum retail charge was defined in the proposal at 130% of the applicable maximum wholesale charge for the roaming call (excluding VAT).

The proposal promotes transparency for retail charges by introducing an obligation on mobile providers to give information on retail roaming charges to their roaming customers on request and free of charge. In addition, mobile providers shall be obliged to give information on applicable roaming charges to their customers on a periodic basis and each time there is a substantial change in these charges.

The European Commission has proposed retail regulation only for voice calls. It did not include data transmission and SMS in the scope of its proposal. According to UKE, the proposal for a regulation the objective of which is to provide a harmonised approach to roaming at the Community level should also incorporate data transmission (including SMS) as an important market segment. The proposed regulation also addresses the retail market in which both SMS and other data transmission services are provided together with voice calls, which means that they are subject to the same competitive conditions and price constraints.  Consumers use both voice calls and data transmission, including SMS. The absence of regulation covering all roaming market segments may cause that prices remain at the same high level. According to UKE, it is necessary to incorporate provisions on data transmission and SMS in the scope of the proposal amending accordingly Article 1 with respect to the subject matter and scope of the regulation and Article 2 with respect to definitions of international roaming and of a regulated roaming call. If data transmission is included in the scope of the proposal, it will be also necessary to define data transmission and an average data transmission charge, including SMS as well as to oblige the Commission to publish the average data transmission charge and to extend all provisions of the proposal on the making and receiving of calls to data transmission.

The proposal provides for regulation both at the wholesale and retail levels. In UKE’s view wholesale regulation should be applied first, and only if it proves ineffective should retail regulation be introduced. UKE supports the sunrise clause, which means that retail regulation will be introduced after six months, if it is evident that wholesale regulation has not caused any reduction in retail prices. UKE proposes that Article 4 concerning the entry into force of retail regulation should be amended accordingly, including more detailed provisions defining conditions under which retail regulation is introduced. It is also necessary to specify the criteria for an assessment of wholesale regulation impact on the reduction in retail prices.

Article 5 of the proposal provides for vacatio legis with respect to the making of regulated roaming calls. However, the Impact Assessment does not mention the reasons for inserting this provision as well as for vacatio legis as long as six months. In principle, UKE supports the sunrise clause, according to which retail regulation is imposed after 6 months if, on the basis of an assessment, it is evident that the operators have failed to reduce retail prices within a reasonable range. However, if this proposal is not taken account of, it is proposed that the provisions of Article 4 concerning the 6-month vacatio legis should be deleted.

The mechanism for regulating the retail charges for received roaming calls as proposed in the regulation is appropriate. However, UKE thinks that the retail cap should be as low as possible. The 130% of the applicable wholesale limit as proposed for roaming calls seems relatively high. The limit should be appropriately justified and the basis for its calculation should be given.

Article 3 of the proposal provides for two different wholesale limits for roaming calls to numbers within a visited country (according to the Commission’s proposal an average mobile termination rate multiplied by two) and for roaming calls to numbers within the countries other than the visited country (according to the Commission’s proposal an average mobile termination rate multiplied by three). It seems a simpler and more transparent solution to have a single cap for both categories of calls. It is therefore proposed to apply one multiple amounting to 2 for both categories of calls.

In addition, as mentioned earlier, an average mobile termination rate will serve as a basis for calculating the price limit. The Commission in Annex II of the proposal has proposed to calculate this limit based on an average per-minute charge (including set up charges), calculated for a three-minute-call at peak rate. The calculation of an average mobile charge in this manner will bring about too insignificant price reductions. UKE proposes that average rates should be applied to calculate mobile termination rates. Taking account of charges for off-peak calls could reduce the determined average and the level of charges referred to in the proposal. Adopting maximum limits (i.e. peak rates) results in unjustified increase in retail charges for the subscribers roaming within the Community. In Poland the difference between peak (T1) and off-peak rates (T3) amounts to 70 - 80 % for F2M calls (involving TP S.A) and 100% for M2M calls.

The application of average mobile rates should cause no problems since relevant data is collected by the National Regulatory Authorities. However, in case of problems with data for the purpose of calculating the average rate, it will be possible to enforce the provision of data under Article 8 (2) of the Telecommunications Law obliging operators to provide relevant data to the National Regulatory Authorities. After the regulation enters into force there should be no problems with the availability of data for the purposes of this regulation.

According to Article 7 (5) of the proposal, operators shall inform their customers “each time there is a substantial change in the roaming charges”. UKE thinks that the obligation to inform customers should apply to all changes in the roaming charges introduced by an operator. Taking account of the consumer interest, UKE thinks that each change in the roaming charges, irrespective of its level, is substantial.

Article 10 and point 1 (b) of Annex II mention that the Per-SMP Operator MTR shall be calculated “in accordance with a methodology approved by the national regulatory authority”. UKE finds this provision imprecise. It should be amended to read “in accordance with a methodology accepted by the national regulatory authority”. The amendment of this provision should enable a formal approval of a rate by means of a decision and determining it on the basis of a benchmark or an approved calculation method.

  

Information on the Proposal for a Roaming Regulation

Work on the proposal

The problem of excessive international roaming charges has been long recognised by the European Commission (the EC), the European Parliament and the European Regulators’ Group. An important obstacle in fighting effectively unfair practices of mobile operators consisting in the application of excessive prices for international roaming is the absence of appropriate instruments in the current EU legislation. 

In this situation it is necessary to prepare a legal act amending the existing regulatory framework for electronic communications. This initiative was put forward by Mrs Viviane Reding, the Commissioner for Information Society and Media, in early 2006. The first phase of public consultation on the form of prospective regulation was held from 20 February to 22 March 2006. During the second phase lasting from 3 April to 12 May 2006, a document with the objectives and scope of the new roaming regulation was presented.

In July 2006, the European Commission presented the proposal for a roaming regulation to the Council of the European Union (full name: Proposal for a Regulation of the European Parliament and of the Council on roaming on public mobile networks within the Community and amending Directive 2002/21/EC on a common regulatory framework for electronic communications networks and services (see document COM(2006)382 final). Since 20 July 2006 the proposal has been dealt with by the EU Council Working Party on  Telecommunications and Information Society (first reading). During the last meeting of the EU Transport, Telecommunications and Energy Council on 11 December 2006, the progress of work on the proposal was discussed.

The proposal for a regulation was also submitted to the European Parliament, involving the following parliamentary committees: the Committee on Industry, Research and Energy (ITRE), the Committee on Internal Market and Consumer Protection (IMCO) and the Committee on Economic and Monetary Affairs (ECON).

Principles for the proposal

The legal basis for the regulation is Article 95 of the Treaty establishing the European Community, enabling the adoption of measures “for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market” (In accordance with Article 95 (1)).

The objective of the proposal is to provide the legal basis for effective and timely action to bring about substantial reductions in the level of mobile roaming charges across the Community in a harmonised manner. The EC has referred here to the principle of European internal market, which in this case means that the charges for making and receiving calls within the Community should not be unjustifiably higher than the charges applied in the home country.

The European Commission has proposed to apply maximum price limits for the provision of roaming services for voice calls only between Member States at retail and wholesale level.  The maximum wholesale charge for roaming calls depends on a category of the call. The basis for calculating the maximum wholesale charge is a mobile termination rate. The maximum charge for calls to a third country (home country and other EU countries) will be set at the level of a mobile termination rate multiplied by three. The maximum charge for calls within the visited country will be set at the level of a mobile termination rate multiplied by two.

The Commission’s proposal also provides for retail regulation to be introduced six months after the entry into force of the proposed measure. The maximum retail charge was defined in the proposal at 130% of the applicable maximum wholesale charge for the roaming call (excluding VAT).

The proposal promotes transparency for retail charges by introducing an obligation on mobile providers to give information on retail roaming charges to their roaming customers on request and free of charge (orally over their mobile telephone or by means of an SMS). In addition, mobile providers shall be obliged to give information on applicable roaming charges to their customers on a periodic basis and, in addition, each time there is a substantial change in these charges.

The proposal imposes monitoring obligations on national regulatory to ensure enforcement and compliance with the regulation and as well as requests Member States to define penalties applicable to infringements of the provisions of this Regulation.

  

All questions or opinions on the proposal for a regulation should be sent to uke@uke.gov.pl

 

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