U.S. can learn from EU telecom reforms

BY KONSTANTINOS STYLIANOU

This winter, the global telecommunications sector is active as never before. On November 24, Europe voted on its new Telecoms Package, a set of Directives that will serve as Europe’s future network policy. The U.S. is revising its own broadband policy at the same time, commissioning Harvard’s Berkman Center for Internet and Society to compile a study on the current global broadband trends. This fortunate conjuncture of regulatory overhauls both provides a clear vista of where we are heading to in terms of telecommunications, and highlights important differences between the U.S. and Europe, offering lessons, examples and alternatives to both sides of the Atlantic.

The EU’s approach is clearly consumer driven, and reasonably so. European countries strove hard to instill competition in the telecommunications sector over the past 20 years, and, having succeeded, they can now shift their attention to enhancing the consumer experience. This did not stop the EU from taking further action to increase competition, facilitating functional separation of national telecoms, requiring more independent national authorities, overseeing national regulatory remedies proposed by national regulators and reallocating spectrum. To achieve uniform application of these rules, the EU?will establish a new oversight authority, the Body of European Regulators for Electronic Communications?(BEREC).

But the new directives will also gravely change the lives of millions of network users directly. The EU will officially embrace a form of network neutrality: national telecom authorities will set a minimum quality level for all services, while network management allows more demanding types of applications to take up the necessary bandwidth. Customers will also receive  transparency in the form of better information on what services they subscribe to and what they can or cannot do with those communications services. A requirement that obliges all website operators to ask permission before installing almost any kind of cookie on the user’s computer is another step towards consumer protection, but this privacy provision is so strict that has attracted negative criticism. Finally, European consumers will also be able to change their fixed or mobile phone operator in one working day while keeping their old phone number (it currently takes, on average, nine).

Most importantly, though, the EU has declared that Internet access is a fundamental right and no disconnection from the internet can take place absent a prior fair and impartial procedure, including the right to be heard, and the right to an effective and timely judicial review. The provision came as a response to the opposition against France’s infamous three strikes law. EU Telecoms Commissioner Viviane Reding said that “the new internet freedom provision represents a great victory for the rights and freedoms of European citizens…. ‘Three-strikes-laws’ could cut off Internet access without a prior fair and impartial procedure or without effective and timely judicial review, will certainly not become part of European law.” The UK is  considering a similar law, but both countries recognize that their version of the three-strike law is not inconsistent with the new EU requirements.

Some of the issues the EU’s Telecoms Package aims to tackle are common to the U.S. The FCC National Broadband Plan taskforce has also identified a “consumer information gap” and a “data privacy gap,” while the management of the frequency spectrum is also a priority there, especially given the tremendous growth in the smart phone and netbook market. But because American telecommuications companies lack an obligation to share infrastructure, entry barriers for new competitors remain very high, and lack of coordination between firms when laying infrastructure dramatically increases costs. The problems of low rural penetration and digital divide are more acute in the U.S. than in Europe, and the FCC’s efforts are more likely to focus thereon. In that direction a reorganization of the Federal Universal Service Fund, to subsidize the broadband sector more effectively, is under examination.

The following months are critical. The FCC must deliver its plan to Congress by February 17, 2010, BEREC is expected to be formed by mid 2010 and the rest of the European directives must be transposed into national law by 2011. The synchronized mobility in the telecoms sector comes in a time where both the US and Europe need to catch up with more technologically advanced countries, like Japan and South Korea, which show the way towards the future: a fast, ubiquitous, integrated network to cover people’s information needs.

Konstantinos Stylianou is an LL.M. student from Greece.

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