Substantive issues for review in the areas of market entry, management of scarce resources and general end-user issues : executive summary.
Date: 2017-09-05
Institutions: Directorate-General for Communications Networks, Content and Technology
Subjects: communications systems, data collection, data protection, disclosure of information, information technology, market, regulation of telecommunications, technology, telecommunications policy, waveband

FR 

Substantive issues for 
review in the areas of 
market entry, 
management of scarce 
resources and general 
end-user issues 

EXECUTIVE SUMMARY 

A study prepared for the European Commission  

DG Communications Networks, Content & Technology by: 

Digital Single Market 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
This study was carried out for the European Commission by 

Authors:    
J. Scott Marcus, Ulrich Stumpf (WIK), 
Peter Kroon, Stefano Lucidi, Lorenz Nett (WIK),  
Veronica Bocarova, Philippe Defraigne, Peter Dunn (Cullen International),  
Christian Hocepied, Hervé Jacquemin, Robert Queck (CRIDS) 

Contributors: Rolf Schwab (WIK) 

Internal identification 
Contract number: 30-CE-0741515/00-77 
SMART 2015/0003 

DISCLAIMER 

By the European Commission, Directorate-General for Communications Networks, Content & Technology.  

The  information  and  views  set  out  in  this  publication  are  those  of  the  author(s)  and  do  not  necessarily 
reflect  the  official  opinion  of  the  Commission.  The  Commission  does  not  guarantee  the  accuracy  of  the 
data  included  in  this  study.  Neither  the  Commission  nor  any  person  acting  on  the  Commission’s  behalf 
may be held responsible for the use which may be made of the information contained therein. 

ISBN 978-92-79-62308-0 

doi:10.2759/77539  

© European Union, 2016. All rights reserved. Certain parts are licensed under conditions to the EU.  

Reproduction is authorised provided the source is acknowledged.  

  
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
Executive Summary 

This  study  seeks  to  support  the  Commission's  policy  development  towards  the  next 
review  of  the  EU  regulatory  framework  for  electronic  communications  (RFEC)1  as 
regards  three  substantive  domains:  (1)  market  entry,  (2) the  management  of  scarce 
resources  such  as  spectrum,  numbers  and  access  to  land,  and  (3)  the  protection  of 
end-users, including ‘must carry’ rules and rules on electronic programme guides. 

Within the  scope of those substantive  domains,  the  study  is  to  provide  (1)  a thorough 
retrospective  evaluation  of  the  framework's  functioning  to  date  together  with  related 
implementation  practices  as  well  as  market  developments,  and  (2)  a  forward-looking 
analysis of ongoing and foreseeable developments in the marketplace and technology. 

Our  assessment  of the framework  in regard to  the  three  substantive domains  that  are 
the  subject  of  the  present  study  is  based  on  relevant  provisions  in  the  directives  that 
comprise  the  RFEC.  Numerous  legislative  instruments  interact  with  the  RFEC  and 
influence how it is implemented in the Member States. 

  1   The  Regulatory  Framework  for  Electronic  Communications  (RFEC)  is  identified  in  Recital  5  of 
Directive  2002/21/EC  (the  Framework  Directive)  as  consisting  of  the  Framework  Directive  itself  and 
the four Specific Directives. Article 3(l) of the Framework Directive defines the Specific Directives as 
“Directive  2002/20/EC  (Authorisation  Directive),  Directive  2002/19/EC  (Access  Directive),  Directive 
2002/22/EC (Universal Service Directive) and Directive  2002/58/EC of the European Parliament and 
of  the  Council  of  12  July  2002  concerning  the  processing  of  personal  data  and  the  protection  of 
(Directive  on  privacy  and  electronic 
privacy 
communications).” The Directive on privacy and electronic communications has not been considered 
in this study. 

the  electronic  communications  sector 

in 

 
 
 
 
                                                
Executive Summary: SMART 2015/0003 

I 

1 

Methodology  

Our assessment followed the following steps:  

(1)  Collection  of  the  data  necessary  to  drive  the  analysis.  Data  was  collected 
through  (a) careful  review  of  the  RFEC,  together  with  relevant  EU  documents 
and  primary  legislation  at  Member  State  level;  (b)  an  extensive  compilation  of 
data  based  on  a  network  of  correspondents  at  Member  State  level;  (c)  an 
examination  of  the  responses  to  the  European  Commission’s  (henceforth:  the 
Commission)  public  consultation  on  the  review  of  the  RFEC  corresponding  to 
the  subject  matter  domains  dealt  with;  (d)  in-depth  interviews  with  commercial 
stakeholders,  consumer  advocates,  regulatory  bodies  and  other  interested 
parties; and (e) a public workshop on interim results. 

(2)  Identification  of  the  framework  for  analysis,  including  relevant  indicators  and 

performance metrics, for each of the substantive domains.  

(3)  Analysis  of the functioning  of  the relevant  provisions  of the  RFEC  to  date  (see 
Section 2 of the report). This includes: (a) an analysis of the implementation of 
to 
key  provisions;  (b)  an  assessment  of  outcomes  and 
implementation of the provisions, and identification of problem areas; and (c) an 
assessment  of  the  performance  of  key  provisions  in  terms  of  effectiveness, 
efficiency,  coherence,  relevance,  and  European  added  value,  in  line  with  the 
Commission’s  Better  Regulation  principles.2  The  analysis  was  backward-
looking, assessing performance and identifying problems. 

their  relation 

(4)  Based  on  this  retrospective  assessment,  delineation  of  Options  to  improve  the 
performance  of  the  RFEC  going  forward  (see  Section  3  of  the  report).  The 
analysis  was  forward-looking,  assessing  possible  developments  and identifying 
possible solutions. 

  2   European  Commission  (2015),  Better  Regulation  Guidelines,  Commission  Staff  Working  Document, 

SWD (2015) 111, 19.5.2015.   
(http://ec.europa.eu/smart-regulation/guidelines/docs/swd_br_guidelines_en.pdf) 

 
 
                                                
II 

 Executive Summary: SMART 2015/0003 

The interrelation among these steps is illustrated in the following figure. 

Sequence and structure of work in the project 

Source: WIK Consult 

The  study  has  elements  of  both  an  ex-post  evaluation  and  an  ex-ante  impact 
assessment,  and  has  been  conducted  in  broad  consonance  with  the  Commission’s 
Better  Regulation  Guidelines.  A  key  bridge  between  the  backward-looking  evaluation 
and the forward-looking delineation of Options is a series of SWOT analyses (covering 
Strengths, Weaknesses, Opportunities and Threats, respectively) for each of the RFEC 
substantive domains that are covered by this study. The identification of Opportunities 
and  Threats  reflected  not  only  predictable  developments  (as  discussed  in  the  next 
section of this Executive Summary), but also a range of more disruptive possible future 
developments. 

The SWOT analysis then drove the definition of the Problem. 

Framework for assessing market entry dynamicsFramework for assessing availability, renewal and pricing of scarce resourcesFramework for assessing position of end-users relative to EC providersEx post overall performance assessment of the implementation of relevant aspects of the RFEC and extrapolation forward=====Analysis of key provisions of the RFECEx ante appraisal of possible future developments, delineation of Options(2) Identify the framework for analysis:(3) Conduct the analysis:(4) Delineate future scenarios, identify OptionsData gathering(1) Collect the necessary data: 
 
 
 
Executive Summary: SMART 2015/0003 

III 

We  then  proceeded  to  delineate  Options,  each  of  which  reflected  a  broad  overall 
approach to addressing the Problem by mitigating the Weaknesses and Threats, while 
drawing on the Strengths and realising the Opportunities. 

In  this  study,  in  light  of  the  presence  of  multiple  substantive  domains  with  complex 
interrelationships, we have chosen to provide a more granular approach to the Options 
than  is  customary  by  developing  candidate  Action  Lines.  Each  of  these  seeks  to 
address  one  or  more  aspects  of  the  Problem  (and  thus  to  mitigate  one  or  more 
Weaknesses  or  Threats).  These  candidate  Action  Lines  were  then  grouped  together 
into Options, bearing in mind that some appear in more than one Option. 

The  Action  Lines  were  crafted  in  view  of  the  most  likely  scenarios  for  market  and 
technological  evolution.  For  each  substantive  domain,  we  also  discussed  possible 
responses  to  more  disruptive  but  less  likely  scenarios  such  as  faster-than-expected 
shifts  from  fixed  to  mobile  networks  (see  Section  3.2.2  of  the  report),  or  gains  in  the 
effectiveness of dynamic spectrum management (see Section 3.2.3 of the report). 

2 

An assessment of the RFEC as enacted and as implemented in 
the Member States 

The analysis shows the RFEC to be functioning reasonably well in regard to the three 
substantive domains that we have been called on to study; nonetheless, there is room 
for improvement. 

A  number  of  over-arching  themes  are  visible.  In  all  three  substantive  domains,  the 
Framework  provides  for  a  degree  of  harmonisation,  but  not  for  uniformity.  The  RFEC 
establishes  broadly  consistent  rules  across  the  Member  States,  but  does  not  ensure 
identical outcomes. 

The  need  to  promote  connectivity  at  high  and  very  high  speeds  is  widely  recognised 
today,  but  was  less  visible  when  the  RFEC  was  last  amended  in  2009,  and  was  not 
explicitly recognised as a regulatory objective. We have taken this need into account in 
the Options that we delineate, while noting that the link with the substantive domain of 
access regulation has been addressed in a separate study undertaken on behalf of the 
Commission.3 

in  particular  access, 

  3   Ilsa Godlovitch, Wolter Lemstra, Christoph Pennings, Karl-Heinz Neumann, Alexandre de Streel et al., 
in  Europe”, 

“Regulatory, 
September 2016,  
(http://bookshop.europa.eu/en/regulatory-in-particular-access-regimes-for-network-investment-
models-in-europe-pbKK0216677/downloads/KK-02-16-677-EN-
N/KK0216677ENN_002.pdf?FileName=KK0216677ENN_002.pdf&SKU=KK0216677ENN_PDF&Catal
ogueNumber=KK-02-16-677-EN-N) 

investment  models 

for  network 

regimes 

 
 
                                                
IV 

 Executive Summary: SMART 2015/0003 

Rapid  improvements  in  technology,  including  the  availability  of  fixed  and  mobile 
broadband at progressively higher speeds,4 generate benefits for European consumers 
and  firms,  and  mitigate  numerous  current  policy  concerns,  but  also  create  new  ones. 
Improved technology (1) has increased the demand for high speed mobile broadband, 
thus  also  putting  demands  on  spectrum  management;  (2)  has  enabled  fibre-based 
broadband, thus also putting demands on access to land (since new fibre needed to be 
deployed  to  replace  existing  copper);  (3)  has  made  it  possible  for  largely  unregulated 
Over-the-Top  (OTT)  services  that  compete  with  regulated  electronic  communications 
services  (ECS)  to  enter  the  market,  raising  concerns  about  possible  competitive  and 
regulatory asymmetries; (4) has enabled Machine-to-Machine communications and the 
Internet of Things (IoT), thus putting pressure on existing numbering arrangements; and 
(5) has enabled existing cable and satellite infrastructure to carry more channels, thus 
mitigating  some  of  the  concerns  over  scarcity  and  over  competitive  issues  that  had 
contributed to the need for ‘must carry’ rules, but at the same time creating demand for 
higher  bandwidth  channels  by  potentially  a  greater  number  of  users  with  the  risk  that 
scarcity might possibly re-emerge. 

2.1  Market entry 

Established  market  players  report  that  the  authorisation  regime  is  not  a  problem  for 
them;  moreover,  administrative  burdens  appear  to  be  low  (see  Section  2.1.6.1  of  the 
report). For smaller firms seeking entry, however, detailed procedures that vary greatly 
among  the  Member  States  (together  with  widely  varying  administrative  charges  for 
authorisation) may possibly present a barrier to entry. 

Access  to  scarce  resources,  especially  access  to  suitable  spectrum  for  network 
operators that require it, can pose far greater challenges to market entry than does the 
notification and authorisation regime itself. 

2.2  Scarce resources 

We have been called on to study three thematic areas within the substantive domain of 
scarce resources: (1) spectrum management, (2) access to numbers, and (3) access to 
land.  A  common  concern  across  these  three  thematic  areas  is  that  defects  in  the 
assignment  of  the  scarce  resource  can  slow  or  hinder  market  entry  or  network 
deployment. 

A  second  commonality  is  that  in  each  of  these  thematic  areas,  arrangements  vary 
substantially  among  the  Member  States;  however,  the  impacts  of  that  fragmentation 
also vary among them. 

  4   See Ilsa Godlovitch et al., “Regulatory, in particular access, regimes for network investment models in 

Europe”, September 2016, op. cit. 

 
 
                                                
Executive Summary: SMART 2015/0003 

V 

Finally,  we  note  that  all  three  thematic  areas  affect  and  are  affected  by  technological 
evolution,  notably  including  (1)  the  growing  deployment  and  adoption  of  high  speed 
broadband; (2) the emergence of OTT services; and (3) the emergence of Machine-to-
Machine (M2M) communications and the Internet of Things (IoT). 

2.2.1   Spectrum management 

There are many strengths in European spectrum management practices, but also some 
pronounced weaknesses (see Sections 2.2.5 and 2.2.6 of the report): 

  Delays in assignment of 800 MHz and 2.6 GHz spectrum caused a clear loss of 

macroeconomic efficiency. 

  Our evidence base has identified isolated instances of apparently poor practice 
in  spectrum  assignment 
for  Electronic 
Communications  Services  (WAPECS)  bands  that  are  used  for  ECS,  including 
setting reserve prices too high in order to fill budget gaps in the Member State in 
question, or auction designs that had obvious defects. 

the  Wireless  Access  Policy 

in 

  The  RFEC  does  not  provide  a  clear  boundary  between  the  roles  of  politics 

versus that of regulation in spectrum management. 

  Overall,  there  is  no  meaningful  review  of  Member  State  practices  by  any 

independent party. 

2.2.2  Access to numbers 

Existing  arrangements  deal  well  with  the  issues  that  were  of  interest  in  the  past,  but 
fundamental changes in the nature of the use of numbers are introducing new, but not 
entirely predictable strains on existing arrangements. Voice over IP (VoIP), Machine-to-
Machine  (M2M)  communications,  and  the  Internet  of  Things  (IoT)  raise  challenges  to 
traditional  arrangements,  and  may  in  particular  require  the  ability  to  use  telephone 
numbers  outside  of  the  country  that  issued  them  (i.e.  extra-territorial  use)  on  an 
indefinite basis (see Section 2.3.1 of the report). 

The European Telephony Numbering Space (ETNS) is now inoperative; however, there 
continues to be interest in establishing a European identity in terms of numbers. 

2.2.3  Access to land 

The migration to fibre-based fast broadband and mobile broadband is putting stress on 
existing  arrangements.  There  is  an  urgent  need  to  find  good  solutions,  particularly  in 
light of the widely recognised need to promote high speed connectivity going forward. 

Because  granting  rights  for  access  to  land  and  rights  of  way  is  highly  decentralised, 
procedures  are  extremely  diverse,  and  harmonisation  at  EU 
level  extremely 
challenging.  

 
 
VI 

 Executive Summary: SMART 2015/0003 

The time to obtain access to land and building permits needed for network deployment 
is  substantial  and  not  fully  predictable.  In  regard  to  the  rules  implemented  among  the 
Member States as regards access to rights of way, there is substantial variability in (1) 
the  time  period  between  application  and  granting  of  rights  of  way;  (2)  the  duration  for 
which rights of way are granted; and (3) the fees and charges associated with rights of 
way (see Section 2.4.3 of the report). 

Additionally,  rules  regarding  Electromagnetic  Fields  (EMF)  in  some  Member  States  or 
municipalities  are  far  more  stringent  than  EU  recommendations  (see  Section  2.4.4  of 
the report). This poses challenges for construction of wireless infrastructure. 

2.3  End-user rights 

The  substantive  domain  of  end-user  rights  entails  both  provisions  of  a  contractual 
nature and other provisions serving end-user interests by enabling measures on issues 
such  as  service  quality,  content  carriage  (‘must  carry’)  and  access  conditions 
(Electronic Programme Guide). 

2.3.1 End-user protection 

We  have  found  a  relatively  high  level  of  consumer  satisfaction  with  regard  to  the 
existing contract information and ease of comparability in surveys, and also a relevant 
amount  of  switching  in  the  past.  This  suggests  that  many  of  the  end-user  protection 
provisions of the RFEC have worked well. 

Fragmentation  poses a challenge,  both  (1)  among  the  Member  States  due  to  minimal 
harmonisation,  and  (2)  between  sector-specific  end-user  protection  measures  versus 
horizontal consumer protection measures.  

Our  assessment  of  sector-specific  and  horizontal  consumer  protection  measures  has 
led  us  to  conclude,  however,  that  the  overlap  between  them  is  not  a  serious  concern 
(see  Section  2.5.5  of  the  report).  Moreover,  sector-specific  end-user  protection  rules 
have distinct value to the extent that they (1) address needs such as quality of service 
and number portability that are specific to the sector and benefit from the competence 
of  sector  regulators,  and  (2) protect  end-users,  which  include  small  and  medium 
business  customers,  while  horizontal  measures  are  limited  to  the  protection  of 
consumers.  

A  number  of  specific  issues  need  attention  (see  Section  2.5.7.1.1  of  the  report).  The 
growing  relevance  of  OTT  services  raises  numerous  questions  as  to  which  end-user 
obligations should be applicable to which services. The treatment of bundled services is 
not always clear  with regard to contract duration and termination, for example when a 
component  of  a  bundle is  cancelled.  Furthermore,  rules on  early  termination  have  not 
been universally imposed and would merit further precision. 

 
 
Executive Summary: SMART 2015/0003 

VII 

2.3.2  ‘Must carry’ and Electronic Programme Guide (EPG) rules 

‘Must  carry’  rules  exist  to  address  two  distinct  needs:  (1)  protection  of  providers  of 
content  that  consumers  value  from  possible  anti-competitive  acts  on  the  part  of 
transmission  platforms;  and  (2)  protection  of  media  pluralism  and  freedom  of 
expression. 

Over the past decade, technological improvements have largely eliminated scarcity on 
most  broadcast  media,  which  has  had  the  effect  of  mitigating  concerns  over  possible 
anti-competitive  acts.  This  is  a  profound  change  in  the  landscape,  but  it  does  not 
necessarily mean that the need for ‘must carry’ has gone away (see Sections 2.6.4 and 
2.6.6.1 of the report). 

EPG  rules  enable  Member  States  to  impose  obligations  on  operators  regarding 
application  program  interfaces,  EPG  and  similar  listing  and  navigation  facilities  with 
regard  to  the  presentational  aspect;  however,  only  a  minority  of  Member  States  have 
imposed  such  obligations.  Findability  of  radio  and  television  channels  might  however 
become an issue as technology evolves (see Section 2.6.1.2.3 of the report). 

 3 

Options going forward 

The Options that we have identified, from smallest to greatest intervention, are: 

  Baseline  scenario:  In  keeping  with  the  Commission’s  Better  Regulation 
Guidelines,  the  baseline  scenario  provides  a  projected  development  against 
which all other Options are measured. By definition, this is the Option where no 
new policy initiatives are undertaken. 

  Modest, incremental improvements: A second Option groups together Action 
Lines  that  go  beyond  current  practice,  but  without  necessitating  a  substantial, 
potentially disruptive overhaul of any existing arrangements. 
Intensive improvements:   A  third  Option  groups  together  Action  Lines  that 
promise greater  improvement  than  in  the  second  Option,  even  at  some  risk  of 
disruption. 

 

  Elimination of certain provisions to promote simplification: A fourth Option 
places  primary  emphasis  on  elimination  of  certain  existing  elements  of  the 
RFEC,  even  at  some  risk  that  certain  existing  protections  might  be  sacrificed. 
The  goal  is  regulatory  simplification,  consistent  with  the  Better  Regulation 
principles  put  forward  by  the  Commission.  Elimination  of  regulations,  where 
feasible,  may  reduce  the  risk  of  asymmetries  between  traditional  services  and 
newer,  internet-based  services.  The  essential  elements  of  this  Option  include 
(1) elimination  of  sector-specific  rules  in  support  of  the  rights  of  end-users 
(placing reliance instead on horizontal instruments such as the Consumer Rights 
Directive); and (2) a phasing out of ‘must carry’ regulation. 

 
 
 
VIII 

 Executive Summary: SMART 2015/0003 

  Centralisation  to  achieve  consistency:  A  fifth Option  puts  primary  emphasis 
on  centralisation  of  authority,  seeking 
to  achieve  maximum  regulatory 
consistency  across  the  Member  States,  but  at  some  risk  to  the  principle  of 
subsidiarity.  Consistency 
full 
centralisation  might  be  provided  by  means  of  either  tighter  specification  in 
regulations  rather  than  directives,  or  by  means  of  harmonising  decisions  or 
recommendations.  This  can  be  viewed  as  the  most  radical  of  the  Options  put 
forward. 

in  areas  where  we  have  not  proposed 

In  our  view,  a  judicious  selection  of  Action  Lines  from  the  “intensive  improvements” 
Option is likely to produce better results than remaining with the baseline scenario, and 
also better results than any of the other Options. The measures put forward are likely to 
be  effective  and  efficient,  and  they  are  consistent  with  the  principles  of  proportionality 
and  subsidiarity.  Their  superiority  appears  to  hold  both  under  the  most  likely  and  the 
various disruptive scenarios of future evolution that we consider. Other Options promise 
more radical benefits on individual Action Lines, which may enjoy considerable support 
among  certain  stakeholders,  but  compare  less  favourably  on  balance  in  terms  of 
effectiveness, proportionality and/or subsidiarity. 

 
 
 
 
European Commission 

Substantive  issues  for  review  in  the  areas  of  market  entry, 
management  of  scarce  resources  and  general  end-user  – 
Executive Summary 
Luxembourg, Publications Office of the European Union 

2016 – 14  

ISBN 978-92-79-62308-0 
doi:10.2759/77539 

 
 
 
 
 
 
 
 
 
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doi:10.2759/77539            ISBN 978-92-79-62308-0