EU telecoms reforms

Have you ever returned from a holiday abroad to find your phone company has clobbered you with additional costs for calls made and received while poolside?

If you live in Europe, chances are that you've had to cough up serious cash for one of the local telecommunications operators' most lucrative charges: roaming fees.

And here's another question: have you ever been blocked or "throttled" while online? If you live in Europe, you might not know it but you probably have.

According to statistics collated by the European Commission, Internet Service Providers (ISPs) regularly slow down their services to discourage or prevent users from using certain services - a practice called "throttling" or "blocking."

Well, the European Commission has had enough.

Commission President Jose Manuel Barroso has used a "State of the Union" speech in Strasbourg on Wednesday to announce an overhaul of Europe's telecommunications industry.

And key parts of the Commission's agenda involve curtailing the ability of European companies to pick winners by deciding which technologies their customers can use, while also taking on their roaming-fee cash cow.

"We have brought prices down and down [for roaming]," Barroso told the European Parliament. "But isn't it a paradox that we have an internal market for goods, but when it comes to digital we still have 28 national markets?"

Staying in neutral

The fine print of the European Commission's telecoms overhaul - to be released on Thursday - will examine the long-term economic implications of throttling.

Some 76 million Internet users in EU countries face restrictions on peer-to-peer communications on mobile phones; 44 million users are limited in their use of VoIP - programs like Skype. Messenger software, such as WhatsApp, can also be targeted.

The ISPs justify throttling by saying they need to regulate traffic and avoid bandwidth congestion.

But the Commission - the European Union's executive - argues the practice is uncompetitive and can often be used to steer users toward an ISP's own services.

But there's an even greater concern: that Europe's startup companies are being stifled by large ISPs picking winners with new technologies.

The only remedy, according to the Commission, is "net neutrality" - a level playing field in which all technologies can compete, free of interference.

"Only the Netherlands and Slovenia have [net neutrality] legislation in place," a senior Commission official told DW. "Everyone else is at risk of the telecom companies saying 'You know what? We don't want to do it that way any more.'"

If EU member states and the European Parliament agree to the Commission's proposals, throttling in Europe will be banned.

Companies providing access to the Web will have to allow customers to use of all legal apps and websites, regardless of commercial or technical considerations.

However, in what appears to be a concession to the industry, the Commission has agreed to allow ISPs to "differentiate" their offers to consumers.

This means that users who don't want high speeds or enhanced quality services can choose smaller - and cheaper - plans.

Such a move would fall short of the demands of some net neutrality proponents, who argue that different deals for different consumers could lead to ISPs discriminating against services which require greater speeds, such as videoconferencing and e-health.

Roam if you want to

Europe's proposed stride towards net neutrality and a single telecoms market - free of roaming charges - will be monitored by a new EU regulator.

However, Commissioner Neelie Kroes - who has been driving the reforms - is at pains to reassure member states that their national regulators won't be scrapped.

In fact, while the phase-out of roaming charges (starting in July 2014) is being promoted as a move towards a single European telecoms market, in reality it's merely an attempt to foster a cross-border harmonization of European standards.

The changes will allow mobile phone users to buy a mobile phone plan (including data) and then travel throughout the EU without incurring unexpected additional "roaming" fees.

Telecommunications companies in Europe will be obliged to form partnerships with other national telcos throughout the EU to enable customers to roam freely. These alliances will have to cover at least 85 per cent of the European population, and 21 out of the 28 European member states.

It's a move which is likely to be resisted by the industry, with Europe's largest networks - in particular France Telecom - claiming the end of roaming will cost them €7 billion.

Spectrum control

The Commission's reforms may also face resistance from some EU member countries, who are keen to maintain control over the allocation of spectrum for data transmission.

Until now, national governments have allocated the 4G spectrum in what the Commission refers to as a "spaghetti" of rules, prices and timetables.

Many EU governments, says the Commission, have allocated the new spectrum on the basis of an often poorly defined "national interest."

The Commission's regulator will now have the power to veto decisions made by national governments on spectrum allocation - which is something that members states are unlikely to welcome.

Regulating the move towards a single telecommunications market may yet prove to be too politically hot to handle.