European Parliament Passes Net Neutrality, End to Roaming

European Parliament Passes Net Neutrality, End to Roaming

The European Parliament has approved the Telecom Single Market legislation, opening the way to ending roaming charges starting in mid-2017 and protection for net neutrality across the EU. The member states approved the text without any amendments to the legislation approved by the EU Council, allowing the bill to become law after its publication in the coming days. Under the new law, mobile operators will no longer be able to charge users extra for calls, texts or data when they are roaming in the EU and European Economic Area (EEA) countries starting 15 June 2017. The concept of “roam like home” will be introduced gradually starting 30 April 2016, when customers will pay the same as for national communications when roaming, plus a small surcharge. The surcharge will be capped at 5 cents per minute for calls, 2 cents per SMS and 5 cents per MB of data. The cap on charges for incoming calls will be determined later this year and is expected to be considerably lower than for outgoing calls.

The new law also sets a common standard for net neutrality throughout the EU. Internet providers will be required to treat all traffic equally, with no blocking or slowing of any content, applications or services from selected senders or to selected receivers. The only exceptions allowed are compliance with court orders and laws, preventing network congestion and combating cyber-attacks. Operators may still offer “specialized” services, such as guaranteed speeds or quality for specific customers like businesses, as long as this does not affect the overall internet quality for all users on the network.

Tarifica’s Take

It appears that after several false starts and over-optimistic promises, roaming will really, finally come to an end in the EU. Not surprisingly, it embodies numerous compromises that reduced the original ambitions of the anti-roaming advocates, but nonetheless the Telecom Single Market legislation represents a real sea change in the way mobile service is charged for across borders. We feel that the EU’s decision, essentially taken in response to massive public dissatisfaction with the concept of roaming charges, presages similar changes in other regions across the world. In emerging and less-prosperous markets, at the present time, operators in general can ill afford to change the structure of termination fees, but we believe that in time, as these markets develop, it will become more feasible. And with market development will come greater impatience on the part of consumers at having to pay roaming charges.

In some ways, the EU Council’s agreement can be seen as a victory for operators. The original proposal in April 2014 had called for an end to roaming in December 2015 and much stricter net neutrality rules. Pressure from operators scuttled that effort and led to another year of negotiations before the current formulation was approved. As far as net neutrality is concerned, the operators’ association ETNO issued a statement after the vote, saying it supports of uniform rules across the EU rather than a patchwork of national regulations, as has been the case with net neutrality to date. However, it said that enforcement was necessary for the legislation to be successful. In particular, the operators are concerned about the extent to which it will be possible to develop new, differentiated services, such as connected driving, e-health and innovative content distribution models, while abiding by the net neutrality rules.