Ms Katherine Licken:

I thank the Chairman and members for the invitation to talk through the implications of the proposed regulation from the European Commission on a connected continent. The Commission and member states have been working for a number of years to achieve a digital single market, reducing barriers to cross-border trade and activities and aiming to make cross-border transactions as seamless as possible. A number of regulatory packages have been agreed as part of this ambition, including the most recent regulatory reform measures which were transposed into Irish law in 2011. It is also in this context that the digital agenda for Europe, DAE, is framed. This is one of the flagship initiatives under Europe 2020.

The Commission's connected continent initiative has been proposed as a further measure to achieve a move towards a single market for electronic communications. The ambition of this measure, as with other initiatives, is to achieve a market in which citizens and businesses can access electronic communications services wherever they are provided in the European Union without cross-border restrictions or unjustified additional costs and a market in which companies can provide electronic communications networks and services wherever they are established and wherever their customers are situated in the Union. The aim of the proposed regulation is to complete the single telecommunications market through action on a number of fronts. We have identified three aspects of the regulation: first, to enable operators to provide services across borders using networks in other member states through a single authorisation regime - this measure aims to ensure greater consistency and predictability in the content and implementation of the regulatory regime across the European Union; second, to co-ordinate the use of radio spectrum in the European Union, with a view to enabling better cross-border provision of wireless broadband communications; and, third, to harmonise rules on consumer protection. These include rules on non-discrimination, contractual conditions, switching and number portability, access to online content and traffic management, which is net neutrality. In addition, the proposal provides for further reforms on roaming charges.

The proposal has provoked a widespread and strong reaction across the full range of players in the EU telecommunications market. There appears to be a common consensus on the Commission's diagnosis of the challenges facing us in implementing the digital single market and the debate this has provoked is helpful. The policy, regulatory and technical issues that need to be addressed to achieve a seamless European market for digital products and services are, however, complex and challenging. For this reason, we need to proceed carefully with any new initiative and Ireland will press the Commission and the Council for detailed consideration and debate on the Commission's proposals. The Commission has acknowledged that this proposal represents "the most ambitious legislative measure in the sector for the past 26 years". We concur with this view and feel such a proposal requires a thorough and comprehensive analysis of all its various elements before the European Council and the Parliament can sign off on its various component parts.

In the past few weeks, since the Commission’s proposal was published in September, officials in the Department have met a number of stakeholders, including ComReg which is represented at this meeting and a number of telecommunications operators in the Irish market. We have also facilitated a meeting between the European Commission, the Department, ComReg, the Telecommunications Industry Federation and ALTO, the alternative operators in the communications market. A number of concerns have been raised by operators and regulators about the proposals. They include the appropriateness or need for some of the measures, their impact on the current regulatory framework and the implications, intended or otherwise, of implementing them. Ireland, in common with most other member states, will press for significant time to be given to this dossier to facilitate a more thorough scrutiny of the detail of the proposed regulation.

I refer to some of the more specific issues from Ireland’s perspective. With regard to spectrum, the Commission’s objective regarding this element of the proposal is to ensure co-ordinated and timely availability of new wireless technologies, to boost interoperability and to ensure economies of scale across Europe. To achieve this, the Commission proposes common principles for rights of use of harmonised spectrum for wireless broadband, synchronisation of spectrum availability, timing and duration of rights of use and new Commission powers to adopt implementing Acts setting criteria such as expiry, renewal, timing of assignments, duration and fees. It is, therefore, a one-size-fits-all approach.

Ireland, together with most other member states, sees the merit in closer harmonisation and we have experienced how harmonisation has been effective in the market, but we have expressed caution about the significant shift proposed in the balance of power between the Commission and national regulatory authorities and governments. The Commission has assured member states that the principle of subsidiarity is respected as EU intervention will be limited to the extent necessary to remove specified internal market barriers. However, there are provisions for increased powers for the Commission in matters which have up to this point been the responsibility of the national regulator. This is a significant change in the management of an area which is a valuable national strategic asset and, like other member states, Ireland feels the full implications of this proposal must be critically examined before proceeding further.

On the issue of net neutrality, the Commission’s proposal aims to ensure open access to the Internet for end-users. This is to be achieved by banning any blocking or throttling of services and-or applications, except in limited, objectively justified circumstances. It sets out clear rules for traffic management which has to be non-discriminatory, proportionate and transparent. Supervision will be by national regulators which may impose minimum quality requirements, under Commission co-ordination. Reaction from industry has been negative thus far and ComReg has also expressed concerns. From a Government viewpoint, we need to consider this matter in more detail. The provisions of the current regulatory framework provide a flexible and workable means of dealing with this matter and we need to ensure new measures are proportionate and workable, while respecting the fundamental principle of net neutrality.

Roaming is an issue of interest to all citizens and we can all identify with it. The draft regulation contains radical proposals in terms of abolishing roaming charges. These charges have been one of the more visible manifestations of a fragmented European market and the European Union has made much progress to reduce them. The Commission wants to accelerate this process with a view to abolishing roaming altogether. We can all support this initiative, but we do need to exercise caution in implementing new measures. Specifically, we have asked the Commission to consider a potential conflict between the proposed new measure and the existing roaming regulation which requires industry to reduce roaming charges further by next July. That regulation requires industry to make significant investments to meet the decoupling obligations by next July. At the same time, the new draft proposal may make these investments redundant.

At a time when we are pushing operators to invest in improved connectivity, we need to be careful about conflicting investment signals. The Commission’s proposals on consumer protection are designed to ensure the right to plain-language contracts and greater rights to switch provider, among other measures. We believe that these proposals are welcome, although national regulators may question the proportionality of some proposals. It will be important to clarify the relationship between some of the measures proposed and existing measures applicable to universal service providers.

The Commission is proposing to upgrade the minimum harmonisation provisions adopted in 2009, which were implemented by Ireland in 2011, to a “fully harmonised” mandatory framework. This will, in effect, prohibit national governments and national regulatory authorities, NRAs, from maintaining or introducing any additional consumer protection provisions beyond what is in this proposal. While there are obvious merits to the one-size-fits-all approach, we need to be careful that member states and NRAs are not deprived of the ability to respond to the changing needs of their respective markets and national consumers. Importantly, we may need to avoid having to step back from measures already in force, thereby reducing rather than enhancing consumer protection.

On the single authorisation mechanism, the Commission is proposing that service providers operating in more than one member state will benefit from a single EU authorisation requiring only one notification - that would be in its home member state. The Commission argues that this will simplify regulation and improve convergence of regulatory conditions. It introduces the concepts of home and host member states. It is unclear precisely what problem the Commission is seeking to address here. The industry is lukewarm on the proposal and national regulators, including the European regulatory umbrella body, BEREC - Body of European Regulators of Electronic Communications - are very strongly opposed. ComReg can perhaps provide more detail about its concerns for the Irish market.

Ireland remains strongly supportive of the principle and objective of a digital single market. While radical, the proposal up for discussion this morning is only a small part of the overall Single Market objective. Issues such as cyber-security, electronic signatures and trust services, copyright and data protection are still being negotiated at Council. Ireland continues to play a constructive role in helping progress these important files. While we welcome the longer-term vision that the single telecommunications market, STM, regulation seeks to achieve, we will be seeking to ensure that this radical proposal is afforded the requisite time to allow for a detailed and comprehensive analysis of the consequences and impacts of its implementation. It is a regulation which of course means direct applicability and also contains provisions for the Commission to adopt implementing Acts. This will allow it to introduce legally enforceable measures in the future in areas that were heretofore within our national competence. There is therefore a very significant shift in power in some policy areas from member states' NRAs to the Commission, and we need to examine this carefully.

We are also concerned about ensuring that the proposal does not lead to unnecessary regulatory uncertainty. We share the Commission’s view that lack of investment is a key challenge facing Europe’s telecommunications market, but we need to ensure that any new measures boost investment and provide the requisite regulatory certainty for market operators.

Finally, we will be asking our Commission and member state colleagues to consider the market implications of this proposal. Member states have expressed some concern that the proposed legislation will lead to market consolidation, with a small number of powerful players dominating the European market. While this undoubtedly has some benefits, we need to ensure that small peripheral countries such as Ireland are not disadvantaged as a consequence. It is often the case that the smaller players provide niche services in markets that are not served by bigger players, and bring important competitive tension into the market. The long-term interest of consumers continues to be the development of cost-effective, transparent and high-quality services. In our negotiations on this proposal we will continue to stress this important goal, with a view to ensuring a balanced and progressive outcome. We would be happy to deal with any questions.