No more roaming in the last Kroes-ade

By April 7, 2014EU insight

By Craig Melson, Consultant, London

The European Parliament has voted overwhelmingly to scrap roaming charges by the end of 2015 and enshrine net neutrality in European law. In a packed out Plenary session, the proposed Connected Continent Regulation passed with 534 votes, with only 25 against and 58 abstentions.

For the outgoing Commissioner Neelie Kroes, the ‘Connected Continent’ has been something of a Kroes-ade and the vote has gone a long way to achieving her Single Telecoms Market dream. The vote is also a clear message to European voters. With European Parliamentary elections in May, plus a new Commission starting in the autumn, both institutions want to bring some good news to voters, especially with Eurosceptic parties expected to gain seats across the continent.

The vote came 24 hours too late for Nick Clegg though, who could have used this clear voter friendly initiative in last week’s face off with Nigel Farage.  Overall, the Deputy Prime Minister would do well to incorporate the idea of the ‘consumer friendly EU’ in his messaging in the run up to the local, European and General elections. But what do these votes mean in practice?

The roaming ban is probably the most significant for consumers. In the UK, it means no more having to be concerned about ‘bill shock’ and convenience when going on holiday, or travelling for work.  For many across Europe though, where international travel is part of everyday life, this is a big deal. With Schengen, no visible borders and seamless roads, a lot of people can’t understand why their mobile service suddenly changes and becomes more expensive when they simply travel for work, or to visit friends and family. However, for the mobile industry, the end to roaming also brings an end to a significant revenue stream. Roaming may start to cost more outside the EU as mobile providers seek to address the 2% reduction in revenue some analysts are predicting.

The other major change is to protect the principles of Net Neutrality (the idea that all types of internet traffic should be treated equally by an ISP). This has been the subject of fierce debate, most recently in the US where Netflix signed an agreement with Comcast to ensure the speedy delivery of its content. MEPs decided to put tough limits on ISPs who want to manage their networks. While they will be allowed to broker deals to offer specialised services that will speed up traffic for some services,  the reaction of access providers (particularly from the continent) suggests that large parts of the industry are not pleased.

The votes may also provide a feel for how policy-making will look like during the next parliamentary term. The Parliament has always craved the attention of its electorate, but the new Commission and Parliament are not only expected to be more political but also more friendly to consumers. The flip-side of this is that some industries are likely to get a tougher ride and the telecoms industry has already experienced this with the connected continent proposals.

However, it is not the end of the road. The Council still need to give its approval and Ministers are often less concerned about their electorate when they make decisions in Brussels away from the day to day scrapping that characterises Westminster politics.

The vote is a great example of how European legislation can affect businesses in a major way. To learn more about this change, you can contact Political Intelligence in London or Brussels here.