COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposals for a Directive of the European Parliament and of the Council establishing the European Electronic Communications Code (Recast) and a Regulation of the European Parliament and of the Council establishing the Body of European Regulators for Electronic Communications
Date: 2016-09-14
Institutions: Directorate-General for Communications Networks, Content and Technology, European Commission
Subjects: EU office or agency, consumer protection, information technology, operation of the Institutions, provision of services, regulation of telecommunications, trans-European network, transmission network, universal service

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   EN 

   EUROPEAN COMMISSION  Brussels, 14.9.2016  SWD(2016) 304 final   COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT  Accompanying the document Proposals for  a Directive of the European Parliament and of the Council establishing the European Electronic Communications Code (Recast) and  a Regulation of the European Parliament and of the Council establishing the Body of European Regulators for Electronic Communications {COM(2016) 590} {COM(2016) 591} {SWD(2016) 303}  
 
 
Executive Summary Sheet 

Impact assessment on the review of the regulatory framework for electronic communications   

Why? What is the problem? 

A. Need for action 

Over the past few years, the role of the electronic communications sector as an enabler of the online economy 
has  significantly  increased.  Consumers  and  businesses  are  increasingly  relying  on  data  and  internet  access 
services  instead  of  traditional  telephone  services.  This  means  that  the  sector  needs  to  contribute  to  meeting 
increasing user demand and socio-economic needs and to react to new internet-based competitors. The review of 
the regulatory framework can help address these issues. The public consultation, the impact assessment support 
study, the evaluation of the current regulatory framework and the continuous dialogue with stakeholders, helped 
identify  three  sets  of  problems.  They  are  (i)  the  obstacles  to  unconstrained  connectivity  by  means  of 
ubiquitous, very-high-capacity (VHC) fixed and mobile infrastructures for a digital single market, (ii) the fitness of 
the  framework  to  deal  with  rapid  market  and  technological  changes  and  (iii)  regulatory  redundancies 
and inefficiencies and a lack of coherence, resulting in unnecessary administrative burdens. 

What is the review expected to achieve? 

The  general  objective  of  the  review  is  to  ensure  that  the  pro-competitive  framework  leads  to  ubiquitous 
unconstrained connectivity as the basis for a digital single market. This means introducing a new VHC connectivity 
objective in addition to the existing ones relating to competition, the internal market and end-user interests. The 
analysis carried out identified three specific objectives for the review that are related to the general one. The 
first is to contribute to ubiquitous connectivity in the internal market. The second is to promote competition and 
user  choice  in  the  internal  market.  The  third  is  to  simplify  the  regulatory  intervention  and  to  achieve  internal 
market coherence.  The internal market remains an objective of the  framework and  underpins  each objective of 
the review. A number of potential synergies and trade-offs between objectives have also been identified. 

What is the added value of EU action? 

Developing  common  and  consistent  regulatory  approaches  and  sharing  regulatory  knowledge  and 
resources can achieve better regulatory results at a lower cost for the whole EU, especially in areas of regulation 
with  a  cross-border  dimension.  Improvements  to  the  framework  to  respond  to  today’s  challenges  and  future 
market  developments  can  benefit  Member  States,  as  VHC  connectivity  networks  become  available  in  the  EU. 
While there must be some flexibility to adapt to local circumstances, national regulators will only best be able to 
achieve  their  expanded  objectives  by  cooperating  with  each  other  and  with  the  Commission  to  devise  the  best 
solutions to similar problems.  

B. Solutions 

What  legislative  and  non-legislative  policy  options  have  been  considered?  Is  there  a  preferred 
option or not? Why? 

All areas considered have a preferred option. The preferred option for access to networks is the roll-out of VHC 
networks while preserving access regulation of dominant market players to ensure competitive markets and end-
user  take-up.  The  preferred  option  for  spectrum  involves  binding  and  enforceable  enhanced  coordination  of 
spectrum management to adapt to 5G needs in the EU. The preferred option for universal service brings it into 
line with market trends and broadband affordability. The preferred option for services streamlines sector-specific 
regulatory  needs,  taking  into  account  developments  in  horizontal  consumer  protection  legislation.  It  also  links 
regulation mainly to the provision of internet access service and communications  services relying on  the use  of 
public  numbering  resources,  with  a  targeted  extension  of  specific  regulatory  obligations  to  all  internet-based 
communications services on the grounds of end-user protection and public policy interests. The preferred option 
for  must-carry  rules  and  obligations  for  electronic  programme  guides  (EPG)  is  to  leave  matters  as  they  are, 
with only some slight changes. The preferred option for numbering is to modify the EU framework in order to 
address  harmonisation  and  competition  issues  on  the  machine-to-machine  market.  The  preferred  option  for 
governance is to amend the competences of independent regulators and change the current structure of BEREC 
to  make  it  a  fully-fledged  agency  with  more  tasks,  including  the  exercise  of  certain  powers  and  better  market 
review, numbering and spectrum assignment processes. The Radio Spectrum Policy Group (RSPG) will continue to 
be an EC Expert Group advisory body articulating and coordinating national administrations’ views on high-level 
strategy issues in spectrum policy and related developments.  
Who supports which option? 

For each policy area, the impacts on the following are assessed: telecoms operators (incumbents, alternative and 
local  providers),  OTT  providers,  business  users,  SMEs,  consumers,  Member  State  authorities  and  NRAs,  taking 
into  account  their  answers  to  the  public  consultation.  The  report  reflects  their  different  views,  including  critical 
ones.  While  incumbent  operators  and  OTTs  tend  to  favour  options  resulting  in  less  burdensome  regulatory 
arrangements, consumers, alternative operators and NRAs tend to support solutions that involve more regulation. 
Member States and NRAs are in general weary of radical pan-European governance solutions. 

 
 
What are the benefits of the preferred options? 

C. Impacts of the preferred options 

The preferred option(s) will contribute to connectivity through VHC networks, faster time-to-market for spectrum 
resources  and  timely  5G  deployment,  alongside  the  take-up  of  ‘Internet  of  Things’  applications  and  innovative 
services. This will boost EU global competitiveness as the benefits from connectivity and 5G spill over into other 
industries,  such  as  the  automotive  industry  and  agriculture,  health  and  transport.  They  will  strengthen  the 
internal market, by creating a standard EU access product space to ensure that every operator can compete in 
the EU, lifting barriers to entry. They will ensure that connectivity for EU citizens and businesses is at affordable 
prices,  through  sustainable  competition  and  universal  service  when  needed.  They  will  provide  better  protection 
for  end-users,  addressing  new  and  emerging  rights  issues  based  on  market  developments.  They  will  simplify 
regulatory intervention and adapt the governance structure to ensure greater consistency in spectrum assignment 
and a harmonised minimum set of competences for independent NRAs, in line with BEREC’s tasks. The benefits 
and costs of the preferred options were assessed, but for some areas (universal service, numbering, must-carry 
and  to  an  extent  services and  governance)  it  was  not  possible  to  quantify  the  impacts.  The  model  run  for  this 
impact assessment predicts — with qualifications — that if all the preferred options are jointly put into practice, 
investment  and  consumption  will  increase  and  there  will  be  a  cumulative  effect  on  growth  of  1.45 %  and  on 
employment  of  0.18 %  by  2025,  assuming  the  reforms  are  implemented  by  2020.  Labour  productivity  is  also 
expected to increase by 0.8 % during the period 2020-2025. 
What are the costs of the preferred options  

The main institutional cost is likely to be the additional resources required by BEREC in order to fulfil its expanded 
remit and for the NRAs to contribute to BEREC activities. Costs under intermediate assumptions concerning 
efficiencies would result in total costs of €208.5 m. Access provision related to mapping may  give rise to new 
costs  for  those NRAs who  do  not  already carry out  surveys.  Introducing  symmetrical access provision may also 
give  rise  to  some  costs  in  countries  without  experience  of  doing  so.  More  consistent  spectrum  assignment  will 
enable  timely  and  adequate  availability  of  spectrum  for  the  introduction  of  5G  across  the  EU, 
generating total benefits of €146.5 bn a year. Most of the benefits will be distributed across four strategic sectors 
that rely on 5G capabilities — the automotive sector, healthcare, transport and utilities. The preferred option for 
services might give a significant boost to the ‘Internet of Things’ and the digitalisation of industry, contributing to 
cost savings in the telecoms and many other industries. The only foreseeable additional costs are associated with 
the number-related obligations imposed on providers of OTT communication services and those related to access 
to emergency services when a standardised technical solution is available. Confidentiality and privacy obligations 
are assumed to be the same as the numbering-related costs. They may also make it necessary for some of the 
current OTT business models to evolve. 

How will businesses, SMEs and micro-enterprises be affected? 

Micro-enterprises  and  smaller  enterprises  outside  central  business  districts  (including  SMEs  in  rural  areas)  are 
likely to benefit from strategies that boost availability of VHC connectivity. That is because today these businesses 
may be under-served compared to larger corporations that may already have VHC connectivity installed on their 
premises. By focusing more on the general authorisation of spectrum than individual licensing and accelerating 4G 
and 5G coverage across the digital single market, the preferred spectrum option will also facilitate innovation and 
entrepreneurship. This benefits primarily (but not only) start-ups and smaller companies.  

Will there be significant impacts on national budgets and administrations? 

Already existing structures will enforce the planned measures. It is not planned to set up any new body, but some 
of  the  competences  of  the  existing  bodies  may  change.  No  significant  impact  on  national  budgets  or 
administrations is expected in addition to the cost items mentioned above. 

Will there be other significant impacts? 

No, the telecoms regulatory framework for electronic communications will continue to be based on the principles 
of access arrangements based on competition principles. It is not expected to have any effect on third countries. 

When will the policy be reviewed? 

D. Follow-up 

A  comprehensive review of the telecoms regulatory framework  for electronic communications  should take place 
seven years after its entry into force.