January 15, 2021

In Europe, a Push for Higher Phone Fees

BERLIN — When the authorities have tinkered with European telecommunications rules, it has usually been to lower prices for consumers, whether through retail price controls on mobile roaming fees or mandatory cuts in regulated interconnection charges.

But this year, to encourage more investment in high-speed broadband networks, regulators are considering helping the biggest operators increase a main source of income: the rent they receive from rivals that lease their landline grids.

The architect of the plan, Neelie Kroes, the European Union’s digital agenda commissioner, has pitched the increases as part of a broader package to stimulate spending while preserving competition and consumer choice.

The plan, however, has alarmed operators that would have to pay the higher charges, like the British mobile operator Vodafone. Vittorio Colao, chief executive of Vodafone, said that the plan to increase the fees collected by former monopolies, including BT, Deutsche Telekom, France Télécom, KPN, Telecom Italia and Telefónica, could lead to a “re-monopolization” of the business.

Mr. Colao said he was worried that landline operators would use the additional revenue to lower their own prices and try to squeeze competitors like Vodafone.

“Increasing the incentive to invest is a good thing,” Mr. Colao said. But now Ms. Kroes must “demonstrate that these new criteria won’t contaminate the competitive arena in Europe,” he said.

Under the plan, the European Commission, the executive arm of the European Union, would begin regulating the fees that mobile operators routinely pay to lease the grids of landline operators.

In much of the world, running telecommunications lines to homes and businesses has traditionally been the domain of a local monopoly, or sometimes a duopoly in the case of telephones and cable television in the United States. Until 1998, countries in the European Union were allowed to maintain national monopolies for this “local loop” to the consumer.

With deregulation, however, the former monopolies were required to unbundle the cost of the local loop and offer it to competitors, thus allowing companies like Vodafone to enter the market.

Despite 14 years of deregulation, and the addition of more than 100 mobile operators in Europe, the former monopolies still supply the majority of fixed-line services in their home countries. In Spain, Telefónica has more than 70 percent of this business.

Until now, these unbundling rates have been set by national regulators, and the average monthly cost per customer in the European Union stands at €8.62, or $11.35. The fee typically makes up a third or more of monthly landline phone bills in Europe and also influences wireless prices because it affects mobile operator costs. The fee ranges from €4.20 in Slovakia to €12.41 in Ireland.

Mrs. Kroes proposed to lower, not raise, unbundling fees in September 2011, to make the old landline networks less profitable for big operators and to encourage them to invest in new networks. But the former monopolies protested, and after personal appeals from executives at big operators, in some cases accompanied by their investors, she reversed course.

Ms. Kroes is proposing that each country within the European Union be required to set its fee within the range of €8 to €10 per month, according to a copy of her proposal obtained by the International Herald Tribune. The new range would most likely require 10 E.U. countries where the fee is currently below this range to raise it, in some cases only slightly, and in others, sharply.

The increases would in all likelihood be passed on to consumers. The rise in fees could be greatest in Eastern Europe, where regulators have been most aggressive in setting low leasing rates to encourage competition. The level of leasing charges could double in Estonia, Latvia, Poland and Slovakia.

Mr. Colao, the Vodafone chief executive, said Ms. Kroes needed to tighten the legal safeguards in her plan to prevent big operators from exploiting access to landline networks.

Article source: http://www.nytimes.com/2012/12/17/technology/eu-plan-could-raise-phone-rates.html?partner=rss&emc=rss

E.U. to Review Mobile Operators’ Policies on Web Access

BERLIN — The European Commission is planning to investigate whether European mobile operators are managing wireless Internet traffic to discriminate against competitors or consumers who use data-intensive services.

Neelie Kroes, the European Union’s telecommunications commissioner, on Tuesday will ask an advisory panel of national regulators to examine whether mobile operators are upholding the principle of network neutrality, which calls for all data traffic to be treated equally.

In a 10-page summary of remarks she intends to present in Brussels, which was obtained by the International Herald Tribune, Ms. Kroes said she was so far unconvinced that a serious problem existed or that new legal consumer safeguards were needed.

Referring to consumer complaints over blocking or throttling of certain types of mobile Internet use, Ms. Kroes, in her prepared remarks, said, “The commission does not have evidence to conclude that these concerns are justified at this stage but should be borne in mind in a more exhaustive, fact-finding exercise.”

Advocates of network neutrality criticized the inquiry as insufficient, saying that the fact-finding mission was superfluous and ignored obvious, continuing problems with the mobile Internet. Operators, for example, do not connect Skype calls over their networks because the Internet calling company’s services would siphon revenue from their own businesses.

“The European Union appears to be alone in the developed world in tolerating on such a wide scale these types of arbitrary restrictions on Internet use,” said Jean-Jacques Sahel, the director of government and regulatory affairs for Skype in London. “It has to cease and we look to European authorities to unambiguously protect consumers.”

The review will ask regulators from E.U. member states to examine whether a European telecommunications law that takes effect on May 25 is sufficient to ensure an open Internet. The law requires operators to disclose traffic management practices to consumers, gives consumers the right to switch operators in a single day and gives national regulators the power to set minimum levels of service for mobile Internet operators.

Lawmakers in Europe, unlike those in the United States, have taken a relatively hands-off approach to network neutrality, allowing the Continent’s mobile operators, which are typically former national monopolies, to manage and prioritize data to ensure smooth flowing traffic.

In the United States, the Federal Communications Commission last year adopted network neutrality rules that forbid operators to block content on their networks. But the commission’s legal authority has been questioned, and the U.S. House of Representatives voted on April 8 to restrict the F.C.C.’s ability to manage operator practices.

In Europe, the European Parliament and the Council of Ministers debated network neutrality in 2009 and amended telecommunications laws to enshrine the concept as a fundamental right, but imposed only weak restrictions on operators. The Body of European Regulators for Electronic Communications, an advisory panel of 27 E.U. national regulators, will examine whether the new law safeguards consumers.

Luigi Gambardella, the chairman of the European Network Operators’ Association, which is based in Brussels and represents mobile operators, said his group supported Mrs. Kroes’s view that “any additional regulation should avoid deterring investment, or innovative business models, leading to a more efficient use of the networks and creating new business opportunities.”

John Phelan, a spokesman for the European Consumers’ Organization, a Brussels group, said Mrs. Kroes’s fact-finding mission overlooked a wealth of evidence that European operators were discriminating against rival services and high-volume mobile users.

Mr. Phelan pointed to a new network neutrality law adopted this year in Norway, a country that is not a member of the European Union, which was supposed to protect consumers from discriminatory treatment by mobile operators. The new rules have had no effect on the market leader, Telenor, and other operators, which continue to downgrade or block traffic from commercial rivals, he said.

“We think the approach Ms. Kroes is choosing is a missed opportunity,” Mr. Phelan said. “There is plenty of evidence that a problem exists and that we need strong action. This soft approach to the issue is not producing the necessary result.”

The panel of regulators, Berec, will not complete its work until the end of the year. Ms. Kroes would not propose new regulations, if any, until 2012.

Copies of her prepared remarks were circulated over the weekend.

“Judging from what we’ve seen of her report so far, it appears that Mrs. Kroes is not even convinced there is a problem,” said Jérémie Zimmermann, a spokesman for La Quadrature du Net, a French group that opposes restrictions to the Internet.

Last week in Paris, a bipartisan, 86-page report by three members of the French Parliament criticized the data traffic management practices of Frence mobile operators and recommended new consumer safeguards be adopted.

Mr. Zimmermann said all three French mobile operators, Orange, SFR and Bouyges Telecom, continued to ban competing Internet voice services like Skype.

But even in France, which was the first European country last year to systematically police and fine Internet users for illegal downloads of copyrighted films, music and other forms of entertainment, new pro-consumer legislation is not guaranteed.

“I am not certain that the French report will lead to any concrete action to protect consumers,” Mr. Zimmermann said.

Article source: http://www.nytimes.com/2011/04/19/technology/19data.html?partner=rss&emc=rss

Spoiled by the All-in-One Gadget

Some consumer advocates and politicians will decry this as Big Mobile enriching itself on the backs of the American consumer. And while that may be true, we will nevertheless continue paying, because the mobile operators well know, and we know too, that for many of us, our smartphones have become invaluable.

It is little wonder why: The smartphone contains massive computing power in a hand-held package. It is connected to a global data network that moves words, sounds and images from one end of the earth to another at the speed of light. It is changing the worlds of communication, commerce, politics, entertainment and countless others.

A rise in rates would bring the United States in line with many other countries. Currently, the United States enjoys one of the more affordable mobile marketplaces in the world. Over the past five years, per-minute costs have gone down in the United States by 50 percent, according to Chetan Sharma, a mobile analyst. In countries like France and Italy, the decline has been only 20 percent.

Roger Entner, an analyst who follows the cellphone market, said: “Americans are enjoying the lowest cost in the industrialized world. Right now, we don’t know how good we have it.”

Consider what a smartphone can do, and the devices it replaces, and its value increases. A refurbished iPhone 3GS is currently on sale by ATT for $19. With the least-expensive data and voice plans and a two-year contract, a customer would pay around $1,800 over 24 months, including taxes and fees.

But to do all the things a smartphone can do without buying one, that same consumer would need to buy the following:

A cellphone (at least $800 over 24 months: $20 for a device, plus $25 or more per month on a prepaid plan, plus taxes and fees).

A mobile e-mail reader ($430: the Peek 9, an e-mail reader, is $70; two years of service costs $360).

A music player (an iPod Nano is $149).

A point-and-shoot camera (around $200).

A camcorder (around $200).

A GPS unit (they start at $80).

A portable DVD player (they start at $60).

A voice recorder (around $40).

A watch (around $30).

A calculator (around $10).

Total cost: $1,999

In a smartphone, all those devices are reduced to software. They are a tap away, and new functions or services can be downloaded in seconds.

One of the side effects of this is that it becomes hard to appreciate the value of things. We become complacent because we now have tremendous capabilities that we can access with ease (even those of us who are technophobes). Louis C. K., the comedian, made this point when he appeared on “Late Night With Conan O’Brien” in the fall of 2008. “Everything’s amazing and no one is happy,” he ranted about the spoiled nature of the American consumer.

Consider what used to be required to buy a camera, or a GPS unit, or any other kind of gadget: You had to research which model to buy. Time was invested in either going to the store or waiting for the device to arrive in the mail. There was hardware — packaging and a piece of equipment — inside, all cues that it took someone’s labor to make it. And because of those cues, we ascribed value to the object, and were willing to pay for it, sometimes handsomely.

Compare that with the smartphone experience. A camera or GPS unit is probably already included in the device. Adding new things, like a special alarm clock app, is a 20-second process of searching and downloading. Many of the cues of the physical world — time, mass, tactility — are absent. Without them, our sense of value is knocked off its moorings.

The pricing of apps reflects this new territory. Zagat’s restaurant guide app, for example, includes one year of access to every guide the company publishes for a year.

Added features include a searchable database, the ability to find restaurants near you using GPS, images of restaurants’ dishes and the ability to make reservations online, directly from the app. It costs $10. The printed 2011 Zagat guide to New York restaurants, which is limited to the five boroughs and has none of those features, costs $16.

And so mobile plans will become more expensive. And because complaining about the phone company predates the arrival of the smartphone (and because mobile operators continue to give us so many reasons to complain), there will be a lot of grousing and grumbling — but people will continue to pay. In a few short years, too many people have taken to the smartphone wholly and completely to turn back. And in the greater context of what the smartphone can do, it still looks like a bargain.

Article source: http://feeds.nytimes.com/click.phdo?i=54f709c08704bc9c5161f4fda3b5936a