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European Commissioner Calls for Eliminating Roaming Fees European Commissioner Calls for Eliminating Roaming Fees
(about 1 hour later)
A top European Union commissioner urged lawmakers on Thursday to abolish cellphone roaming charges and guarantee equal access to the Internet, as part of an effort to reinvigorate the telecommunications market. BERLIN — A top European Union commissioner urged lawmakers on Thursday to abolish cellphone roaming charges as part of an effort to reinvigorate the telecommunications market.
Neelie Kroes, the European commissioner for digital policies, issued the appeal during a speech to members of the European Parliament’s Industry, Research and Energy Committee in Brussels. Parliament will be up for re-election next year, which means a compressed timetable for accomplishing her agenda.Neelie Kroes, the European commissioner for digital policies, issued the appeal during a speech to members of the European Parliament’s Industry, Research and Energy Committee in Brussels. Parliament will be up for re-election next year, which means a compressed timetable for accomplishing her agenda.
Mrs. Kroes also called for a renewed commitment to “network neutrality'’ – the concept that telecommunications carriers should give equal treatment to all types of content, whether voice, video or data, that travels over their networks.
“I want you to be able to go back to your constituents and say that you were able to end mobile roaming costs,” Ms. Kroes said. “I want you to be able to say that you saved their right to access the open Internet, by guaranteeing net neutrality.”“I want you to be able to go back to your constituents and say that you were able to end mobile roaming costs,” Ms. Kroes said. “I want you to be able to say that you saved their right to access the open Internet, by guaranteeing net neutrality.”
Her speech was yet another move by Ms. Kroes, a former European Union antitrust chief who is a Dutch free-market economist, to fundamentally redefine the rules of the union’s telecommunications market. In theory, the market is a single economic zone. But in reality, it is a fractured patchwork of 27 national markets where operators charge consumers heavy fees whenever they cross a border with their smartphones. The speech was yet another move by Ms. Kroes, a former European Union antitrust chief who is a Dutch free-market economist, to fundamentally redefine the rules of the Union’s telecommunications market. In theory, the market is a single economic zone. But in reality, it is a patchwork of 27 national markets where operators charge people heavy fees whenever they cross a border with their smartphones.
Mobile roaming fees are charged when a consumer in Europe makes or receives calls and text messages, or surfs the Internet, while in another country. Since 2007, the retail and wholesale level of the fees has been limited by law. Because competition has made basic mobile phone service in Europe relatively inexpensive, compared with other developed countries, the roaming fees are a crucial part of network operators’ businesses. And so, even if Parliament is willing to go along with Ms. Kroes’s plan, lobbying from the telecommunications industry could be intense.
The association representing Europe’s largest phone operators, the European Telecommunications Network Operators’ Association, said that lawmakers should further deregulate the telecommunications market before considering an end to roaming fees.
The group said in a statement Thursday that the industry needed “a much less intrusive and a simplified regulatory framework which will facilitate new investments and pave the way towards a digital single market.”
Smaller operators fear that Ms. Kroes’s single-market proposal could extend the dominant influence of the big operator groups — Vodafone, Telefónica, Deutsche Telekom and France Télécom — from isolated national markets to wide swaths of Europe.
Mobile roaming fees are charged when a person makes or receives calls and text messages, or surfs the Internet, while outside their home country. Since 2007, the retail and wholesale level of the fees has been limited by law.
Carriers in the European Union can now charge up to 35 euro cents (46 United States cents) per minute for a roaming call within the bloc, and up to 79 euro cents for every downloaded megabyte of data.Carriers in the European Union can now charge up to 35 euro cents (46 United States cents) per minute for a roaming call within the bloc, and up to 79 euro cents for every downloaded megabyte of data.
A United States-based customer of AT&T would pay $1.50 a minute to make a call to the United States from most countries in Europe, according to the company’s latest published figures. If customers buy a special monthly roaming package at prices from $30 to $120, that effectively reduces the per-minute charges to as low as 60 United States cents. Deutsche Telekom, the big German carrier, issued a statement opposing Ms. Kroes’s proposal. “The telecommunications sector stands to lose millions of euros under such a proposal,'’ the company said. “At the same time it is expected in the European Union that telecom companies are going to invest sizable sums in the construction of modern broadband networks. The political decision makers are the ones who must resolve this apparent contradiction.'’
Last year, at the urging of Ms. Kroes, European Union lawmakers extended and lowered the price caps on roaming fees through July 2017. And starting July 2014, operators are required to sell roaming services separately from regular local and long-distance domestic service. Simon Gordon, a spokesman for Vodafone, the largest mobile operator in Europe, declined to comment on the plan. But he said Vodafone already sold a special roaming package called Vodafone Red for 3 euros per day that gives customers the ability to make and receive unlimited texts and voice calls while roaming in 14 European countries. The package also allows a Vodafone customer to download as much data while traveling as they would at home each day under their existing plans, Mr. Gordon said.
When Parliament wrote “network neutrality” into the main telecommunications law in 2009, the endorsement was legally vague and operators were largely left alone to manage data on their networks. Ms. Kroes earned the nickname “Steely Neelie” for her hard-charging approach to regulation during her previous job in Brussels. As the bloc’s competition commissioner, she imposed a $1 billion penalty on Microsoft in 2008 as part of a decade-long battle over the way the software giant used its Windows computer operating system to curtail competition. By contrast, her successor, Joaquín Almunia, has gained a reputation for seeking settlements with companies where possible, rather than trying to win scalps. Yet Ms. Kroes has a friendly and informal manner, and she prides herself on real-world business experience, having sat on numerous corporate boards before joining the European Commission.
Last year, at the urging of Ms. Kroes, European Union lawmakers extended and lowered the price caps on roaming fees through July 2017. And starting in July of next year, under the current rules, consumers are supposed to get the right to buy roaming packages from other operators, a change intended to introduce competition in the roaming market and bring down prices. If Ms. Kroes’s new plan were to take effect, it would override the changes set to take place in July 2014.
Malcolm Harbour, the chairman of the panel that heard the speech, said in an interview that Ms. Kroes would find support in Parliament. He said her push to abolish roaming fees would be part of a broader package she is expected to announce in October to enhance the operation and efficiency of a single European digital communications market.Malcolm Harbour, the chairman of the panel that heard the speech, said in an interview that Ms. Kroes would find support in Parliament. He said her push to abolish roaming fees would be part of a broader package she is expected to announce in October to enhance the operation and efficiency of a single European digital communications market.
“I think the push to abolish roaming stands a good chance of becoming law over the next year if Mrs. Kroes presents a well-calibrated package that frees industry from some of the current regulatory constraints on investment,” Mr. Harbour said.“I think the push to abolish roaming stands a good chance of becoming law over the next year if Mrs. Kroes presents a well-calibrated package that frees industry from some of the current regulatory constraints on investment,” Mr. Harbour said.
In her speech, Ms. Kroes did not detail how she planned to guarantee network neutrality or abolish roaming fees, which industry analysts say generate about 5 percent of an operator’s revenue. But her package to enhance a single European market will probably include operator-supported proposals to ease cross-border mergers and to let carriers more quickly recoup their investments in new networks. As for “network neutrality,'’ when Parliament wrote that term into the main telecommunications law in 2009, the endorsement was legally vague and operators were largely left alone to manage data on their networks.
In her speech Thursday, Ms. Kroes did not detail how she planned to guarantee network neutrality or abolish roaming fees, which industry analysts say generate about 5 percent of an operator’s revenue. But her package to enhance a single European market will probably include operator-supported proposals to ease cross-border mergers and to let carriers more quickly recoup their investments in new networks.
Jens Rohde, a Danish lawmaker who is a vice chairman of the committee, said the proposed ban on roaming fees was intended to pressure operators to support her package.Jens Rohde, a Danish lawmaker who is a vice chairman of the committee, said the proposed ban on roaming fees was intended to pressure operators to support her package.
“She is simply trying to raise pressure on operators to come to the bargaining table,” said Mr. Rohde, who supports her push to end the charges. “There is a cartellike situation when it comes to roaming charges in Europe, and this must stop.” “She is simply trying to raise pressure on operators to come to the bargaining table,” said Mr. Rohde, who supports her push to end the charges. “There is a cartel-like situation when it comes to roaming charges in Europe, and this must stop.”
Both Mr. Harbour and Mr. Rohde said a roaming ban had more political support than a new attempt to enforce network neutrality, a more complex subject where the technical realities of managing overloaded telecom networks can conflict with free-speech guarantees.Both Mr. Harbour and Mr. Rohde said a roaming ban had more political support than a new attempt to enforce network neutrality, a more complex subject where the technical realities of managing overloaded telecom networks can conflict with free-speech guarantees.
Industry groups reacted cautiously to Ms. Kroes’s remarks. A European consumer group welcomed plans to abolish roaming fees but warned lawmakers against passing a ban that could be easily circumvented by operators, which could simply raise domestic fees across Europe to compensate for the loss of roaming revenue.
The association representing Europe’s largest phone operators, the European Telecommunications Network Operators’ Association, warned that lawmakers must first remove internal structural barriers to a single market before considering an end to roaming fees.
The group said in a statement said that the industry needed “a much less intrusive and a simplified regulatory framework which will facilitate new investments and pave the way towards a digital single market.”
Smaller operators fear that Ms. Kroes’s single-market initiative could extend the dominant influence of the big operator groups — Vodafone, Telefónica, Deutsche Telekom and France Télécom — from isolated national markets to wide swaths of Europe.
A European consumer group welcomed plans to abolish roaming fees but warned lawmakers against passing a ban that could be easily circumvented by operators, who could simply raise domestic fees across Europe to compensate for the loss of roaming revenue.
“The European Union wants to make roaming history, as bill shocks have bitten hard and it contradicts a single-market ethos,” the European Consumers’ Organization said in Brussels. “But the future shouldn’t be a lava lamp effect of costs rising elsewhere and national calls or texts becoming more expensive.”“The European Union wants to make roaming history, as bill shocks have bitten hard and it contradicts a single-market ethos,” the European Consumers’ Organization said in Brussels. “But the future shouldn’t be a lava lamp effect of costs rising elsewhere and national calls or texts becoming more expensive.”
Should Ms. Kroes persuade the European Parliament to support her plans, she must get them through the Council of Ministers, where former telecom monopolies, as large employers, have more influence with national governments.Should Ms. Kroes persuade the European Parliament to support her plans, she must get them through the Council of Ministers, where former telecom monopolies, as large employers, have more influence with national governments.
“That is the big question, whether any of this can get through the council,” Mr. Rohde, the Danish lawmaker said. But if Parliament overwhelmingly supports a series of consumer-friendly changes such as the end to roaming fees and a legal guarantee on net neutrality, national officials will have a hard time opposing it, he said. “That is the big question, whether any of this can get through the council,” Mr. Rohde, the Danish lawmaker, said. But if Parliament overwhelmingly supports a series of consumer-friendly changes, including the end to roaming fees and a legal guarantee on net neutrality, national officials will have a hard time opposing it, he said.
“It would be very difficult I imagine for national telecom ministers to explain to their constituents why they don’t want to abolish roaming fees or protect network neutrality,” Mr. Rohde said. “It would be very difficult, I imagine, for national telecom ministers to explain to their constituents why they don’t want to abolish roaming fees or protect network neutrality,” Mr. Rohde said.

James Kanter contributed reporting from Brussels.