Connected Research

Union policy research in the 21st century

Posts Tagged ‘EU

UN launches Broadband Commission

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The International Telecommunications Union, an arm of the UN, has set up a Broadband Commission whose aims will be to define strategies for rolling out broadband networks worldwide and to examine the applications for the improvement in the delivery of a wide range of social services.

An impressive list of global private sector business leaders, UN agencies, regulatory bodies and politicians, including the European Commissioner for the Digital Agenda, Neelie Kroes, are to sit on the Commission, which will present findings to the UN’s Millennium Development Goals review summit in September. The Commissioners are intended to provide ‘expert input’ alongside an analysis of the deployment of broadband at all stages of economic development, with the ultimate intention of providing ‘practical recommendations on the possible routes towards the goal of high-speed networks at affordable prices.’

Hamadoun Touré, Secretary-General of the ITU, commented that:

In the 21st century, affordable, ubiquitous broadband networks will be as critical to social and economic prosperity as networks like transport, water and power… Not only does broadband deliver benefits across every sector of society, but it also helps promote social and economic development, and will be key in helping us get the Millennium Development Goals back on track.

There’s nothing much wrong with that, and it helps to reinforce the notion that the developing world does – perhaps controversially – need modems and routers just as much as it needs other basic essentials as a means of delivering the social and economic benefits that will improve life expectancy and the social situation. So, the initiative is welcome, although it is important to emphasise that it needs indeed to look at the full range of ‘possible routes’. Whether decent debate about the range of ways of potentially achieving these goals is likely to ensue from the Commission’s appointments, and the short time-scale for its work to be concluded, is a moot point. Alternative visions than ones based on deregulation and the removal of barriers, and on a centre stage for competition, are both possible and need to be explored if the initiative is to achieve its aims.

Written by Calvin

13/05/2010 at 12:18 am

Monti report proposes more centralised regulation

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In an announcement somewhat overshadowed by EU finance ministers’ agreement on a €500bn package for member states with solvency problems and to provide support to the euro as a currency, as well as in the UK by the will they-won’t they tea dance going on in Whitehall as I write, former European Commissioner Mario Monti has presented a report to current EU President, Jose Manual Barroso, on a new strategy and direction for the EU’s single market.

Monti was commissioned to write the report back in October 2009, and its aim is to motivate a renewed political determination around the concepts of the EU’s single market and to provide a fresh impetus for the principles which underpin it. What seems to be high up in the Commission’s thinking is the need to assess the state of play in the single market in time for the 20th anniversary of its establishment, in 1992, while the context is also clearly rooted in fears for the direction and commercial success of the EU associated with any retreat into economic nationalism arising from national-level responses to the economic and financial crisis. The report will be the basis for a Commission initiative to relaunch the Single Market as a key strategic objective and, following internal discussion, the Commission will emerge with a ‘balanced, broad and fair’ vision of what the single market should look like in the future some time in July.

This is a hugely significant report and the timing of the announcement of the publication could not be worse (though this is unlikely to inhibit a serious discussion in time of the report’s focus). The thrust of the Monti report is that a system of national regulators sees to it that the EU ‘falls short of its commercial promise‘ in the communications and e-commerce areas, and that the response should be for the EU to have stronger powers over national regulators. Some of the conclusions – for example on an EU-wide spectrum licencing regime – look somewhat behind the play given the round of advanced spectrum auctions which have been concluded in the Netherlands and in the Nordic countries, and are currently well underway in Germany. But what looks inescapable is Monti’s views on the need for a revision of regulation in the communications sector so as to create an EU-wide market for electronic and communications and to drive the growth of Europe’s digital economy.

Given the recent conclusion (in 2009) to the last round of revision of telecoms regulation at EU level, the sigh of ‘here we go again’ is equally inescapable. Nevertheless, this is a report that will need serious consideration, both in terms of its political significance as well as in terms of the impact of the measures that it proposes will have on workers in the sector.

Written by Calvin

10/05/2010 at 5:41 pm

Posted in Telecoms regulation

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Ofcom lowers the rate

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As if needing to prove what good value for money it represents, Ofcom followed up yesterday’s announcement of its annual plan and budget with its long-awaited proposals on mobile termination rates. These will see termination rates – the costs levied on other network providers when calls made from their networks land (or ‘terminate’) on mobile networks – fall steadily over the lifetime of the next period of mobile regulation (between 2011 and 2015) from 4.3p/minute now (and 4.6p on 3’s network) to 0.5p/minute. Termination rates were 23p/minute in 1995.

Ofcom believes that this cut will lead to cheaper calls and, although it is a little shy of giving figures, partly because there is no regulatory compulsion on operators to pass on the savings, other than via other regulated products (as well as via the weight of Ofcom’s publicly-expressed expectations in this area), the newspapers (e.g. here and here) have happily done them for it (although as The Guardian‘s version suggests, this is likely somewhat to overstate the case). Nevertheless, the suggested annual costs stripped out by the move represent some six times Ofcom’s total annual budget.

In contrast to yesterday’s announcement of the outcome of its investigation into the pay TV market, there was no subsequent wailing and gnashing of teeth from those subject to the announcement (though Orange has had one or two things to say [registration required; limited viewing time]; while, in contrast, Terminate the Rate, supported by 3 and BT, amongst others, was clearly rather chuffed). Mobile operators are likely to challenge the proposals during the consultation period but, publicly, there has been little reaction from them. This could be because operators have already discounted the cuts – which have been long expected, given their origins within EU attempts to lower mobile termination rates under Viviane Reding, the previous Commissioner – or because, as Robert Peston suggests on his BBC blog, they are likely to respond by shifting their business model to accommodate them. It is also true that, as the next charge control period comes to an end, pressure on these rates is likely still to be present, as Ofcom believes that:

As the market adapts [i.e. to the current proposed reductions], we believe that further reductions in termination rates will promote competition, the development of innovative tariff packages and the growth of genuinely converged fixed and mobile services. [para 1.13]

The review of termination rates – these are proposals and, as such, are subject to consultation – will conclude with a statement later in the year.

Written by Calvin

01/04/2010 at 3:49 pm

Posted in Telecoms regulation

Tagged with , , ,

Robin Hood goes to Strasbourg

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The European Parliament yesterday debated a financial transactions tax via an oral question put up by Sharon Bowles, a Liberal Democrat MEP who chairs the Parliament’s Economic and Monetary Affairs Committee, followed by a debate on a formal motion.

The motion was, essentially, a shoo-in (the vote is scheduled for tomorrow), since it is supported by the four largest party groupings in the Parliament, including the Socialists & Democrats; the Greens – European Free Alliance; Liberals and Democrats; and the centre-right European People’s Party (which excludes those parties which are further to the right, including the UK Tories). Between them, these four party groupings control something like 80% of MEPs. Conssequently, such a wide cross-party consensus on the motion for debate adds tremendously to the power of what it calls for.

[Edit 11 March: the resolution was approved with 536 votes in favour – 87% of those voting.]

The motion recalls:

The importance of renewing the economic and social contract between financial institutions and the society they serve,

and seeks to remind G20 leaders of their:

Collective responsibility to mitigate the social impact of the crisis, both in their member states and in developing countries, which have been hard-hit by the indirect effects of the crisis.

The motion identifies the European Parliament behind the EU having its own strategy on a financial transactions tax to take to G20 summit meetings, and for the need to adopt a common position at the G20 on the issue based on:

The options as to how the financial sector should make a fair and substantial contribution towards paying for any burden which it has caused to the real economy or which is associated with government interventions to stabilise the banking system.

(Here, the motion cleverly borrows from the leaders’ declaration from the G20 meeting Pittsburgh last September – see point 16.) In moving towards the definition of such a common position, the motion urges the Commission to elaborate an impact assessment of the potential of a global financial transactions tax both to generate revenues as well as to stabilise markets (here, in particular, the oral question correctly approaches the issue from the perspective of assisting with the development of a much needed long-term orientation to the financial system); of the benefits and drawbacks of such a tax; and of the need for the tax to be sufficiently well designed to mitigate any side-effects.

The motion has been well thought-out and put together, and its powerful language belies the political disparities between the political groupings uniting behind the motion (where the product of establishing such a wide-ranging consensus is frequently anaemic language and commitments). Ultimately, it will provide a further contribution to the body of evidence, on top of that currently being put together by the G20, on what such a tax could look like, and achieve, and is to be welcomed. In this respect, it’s also a good sign of the value of MEPs and the work they do.

Clearly, it does not yet commit the EU to a policy on the tax; it simply asks the EU to investigate the case. Nevertheless, should the impact assessment come out favourably in support of a financial transactions tax, that will give greater power to the elbows of those arguing that the EU should adopt such a tax and would represent a significant, valuable and high profile breakthrough for financial transactions tax campaigners.

Written by Calvin

09/03/2010 at 4:40 pm

EU consultation on universal service

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The European Commission has announced its long-awaited consultation on universal service principles in the communications industry. Existing rules at the European level, put in place ten years ago (although regularly reviewed since), seek to ensure on the basis of social exclusion that everyone has access to the public telephone network services and basic internet access. The Commission is now seeking views on whether these should be updated for the digital age – particularly concerning whether they should be extended to cover fast broadband service.

Hat-tip: Roger Darlington’s Comms Watch blog.

This is an interesting development for us in the UK, not least in the light of the government’s intention to have a separate and distinct universal service broadband commitment, on the basis of a minimum access speed of 2 Mbps, in place by 2012; whereas the Tories want to roll this up with their other plans for fast broadband services, letting the market take charge.

This is the first consultation produced under the EU’s new Digital Agenda commission under Neelie Kroes. The Connect Sector of Prospect will be responding to the consultation, which closes on 7 May, both directly and via our partners in UNI.

There are eight major questions on which the consultation is seeking views and the main principles under which the Connect Sector will be developing its response are likely to be as follows:

– the market is an insufficient mechanism to deliver access for all on the basis of widely-accepted principles of social inclusion

– universal service principles should encompass broadband internet access, on the basis of decent minimum speeds which are regularly reviewed to ensure continuing relevancy and which encompass upload speeds as well as download ones

– the burden of providing universal service coverage needs to be met from within a specific fund levied across communications service providers more widely: increasingly, this is likely to lend itself to broader definitions of players in the industry

– there needs to be particular attention to the needs of people with disability in terms of access to communications services.

If members have any comment on these principles, we’ll ensure they’ll be taken into account when we draft our response – so, let fly with a reply!

Written by Calvin

03/03/2010 at 5:21 pm

EU private consultation on T-Orange concessions

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Mobile companies in the UK, plus BT, are reported to have received questionnaires from the European Commission concerning the concessions [registration required; limited viewing time] which Deutsche Telekom and France Telecom are (again) said to have made as a means of winning regulatory support for the merger of their UK interests.

Citing the old stand-by of ‘a person familiar with the situation’, but who appears to be a representative of the parent companies, the report states that the concessions include the sale of part of their combined radio spectrum and the provision of some network sharing guarantees to 3 UK, which has a network sharing agreement with T-Mobile. (It probably helps the spread of such rumours that more than half the mobile world is at a congress this week in Barcelona. Nevertheless, this seems to be a serious story, having also appeared in The Observer on Sunday.) The purpose of the EU questionnaires, which are due back with the Commission by the end of the week, is to assess whether the concessions on offer are sufficient to allay rivals’ concerns over the impact of the merger on competition.

Few of those involved – from the operators to the Commission – can thus far be found who will comment.

Those responsible for the appearance of the story are thought to believe that allaying the concerns of rivals might be sufficient to persuade the UK’s Office of Fair Trading to withdraw its request for the competition aspects of the joint venture to be examined in the UK – thus leading to a potentially shorter period in which the merger is officially reviewed.

Three comments, really:

1. Since when did the leading subjects of competition policy assume responsibility for determining its direction? Perhaps something of a naive question, and no doubt the questionnaires are consultative only and that the Commission will take into account the views of others, including the UK’s Office of Fair Trading, but competition policy cannot, as a matter of principle, be determined on the basis of what other companies in the industry think. Did consumer organisations receive a questionnaire? Did the Connect sector of Prospect and the CWU? (Slightly rhetorical questions, these.) Policy must be made on the basis of clear (and transparent) principles (and also in line with the principles of democratic accountability), not subject to a laissez faire carve-up between the major operators. Of course, the views of rivals are important ones, but this process is currently back to front.

2. The concessions which are reported to have been made are a matter of public concern and need to be made public. While they remain secret confidential, they have, in terms of the policy-making process, no validity. Policy is made on the basis of public consultation and that essential principle needs to be re-asserted.

3. The joint venture concerns only the UK interests of Deutsche Telekom and France Telecom. It thus concerns only the UK. The EU has clear rules of subsidiarity in terms of decision-making, with the result that the primary location for the determination of the policy issues behind whether such a joint venture should be allowed to proceed is the UK. Furthermore, where there is little or no direct interest in the outcome of decision-making, i.e. little or no stake in its outcome, how valid is that decision-making process in the first place, and how reliable are the decisions that result from it? Consequently, it is the Office of Fair Trading, not the EU, which ought to have the final authoritative say.

Perhaps it will. And perhaps the view of rival companies will be just one component in the decision-making, rather than what appears to be its sole determinant. Indeed, this may simply be another battle in Deutsche Telekom and France Telecom’s intentions to get the merger examined in Brussels – that if, by planting the story, they appear to assert the primacy of the European Commission’s role, via the apparent (though this may not be actual) by-passing of the UK authorities in this questionnaire process, the ‘logic’ of the venture being examined in Brussels will follow on.

This would, however, be a dangerous way to see both this story and the discomforting aspects of the policy-making process that it embodies.

Written by Calvin

18/02/2010 at 11:36 am

Europe’s sticky iron curtain

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The European Commission’s annual report on the social situation in the EU has just been published, revealing not only striking differences between EU member states but also divergent trends between them in the period since the EU was expanded to cover the new member states in central and eastern Europe. For the majority of them (i.e. all of them except Romania and Bulgaria), 2009 saw the fifth anniversary of their accession – time enough, you would have thought, for views to be less, not more, divergent.

The report is supported by a Eurobarometer attitude survey on the social climate, based on the views of around 1,000 adults in each of the 27 EU member states, plus in the three candidate countries of Croatia, (Former Yugoslav Republic of) Macedonia and Turkey, conducted in May/June 2009 and intended to be the first in a series of such surveys. It is striking that people in EU member states in northern and western Europe – regardless of the social measure used, be it within their personal situation, the general situation or in the area of social protection and inclusion – tend to report the highest levels of satisfaction with their current situation and prospects, while people in states to the central and eastern half of the continent (i.e. the new member states) reported the most dissatisfaction.

The reasons why the transition in former communist countries – even those untouched by war – has been so difficult are many, and the tough economic recession, with fragile economies in central and eastern Europe remaining particularly vulnerable, has clearly not helped. Social change, including large-scale population movements, has presented particular challenges. Nevertheless, it is equally true that, twenty years on from the start of the transition, with a whole generation of people not knowing what life was like in the former times, people living in those countries remain much less satisfied with their situation and prospects than is the rule across the rest of the continent. Life remains tough and the potential for disillusion is clear.

In this context, the words of Vladimír Špidla, the outgoing EU Commissioner for Employment, Social Affairs and Equal Opportunities are important:

Today’s report shows once again the importance of our efforts to promote jobs and growth in Europe so as to guarantee people’s social well-being in the future. We must continue these efforts as part of our future 2020 strategy to make the EU a smarter and greener social market economy.

Trade unionists, or European socialists more generally, are unlikely to find much to disagree with there.

What is required, however, is a greater sense of the need to do something more positive on behalf of people in countries in ‘the other half’. In this direction, it is interesting that the new Commissioner, taking the place of Vladimír Špidla, is to be László Andor, a Hungarian whose appointment, therefore, is likely to continue the perspective on the needs in this direction of what were formerly known as transition countries (and which perhaps might still need to be thought of in such a way); Špidla is Czech and, thus, also with a perspective informed by transition. Andor is an economist without much of an evident political background, although his past does appear to have some colour in it, and his appearance in the European Parliament hearings of the new Commissioners have been differently reported (see here and here). At the very least, however, he looks to be a safe pair of hands – and he does appear to be on board with issues on the EU’s social agenda. His tenure at the Commission needs to see greater, and specifically practical, attention paid to the social problems of countries from central and eastern Europe.

Written by Calvin

04/02/2010 at 1:26 pm