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Cellcos move to 'dilute' roaming laws

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There appears to be political machinations afoot, with the powerful European cellco lobby gunning for EU media commissioner Viviane Reding, trying to kill her attempts to regulate mobile roaming charges within the European Union.

UK newspapers were rife this week with self-congratulatory comments about Reding having already agreed a compromise for fear of losing a key European Commission vote on the subject this week.

The GSM Association in March showed how opposed it was to Reding's proposals issuing a formal response claiming that mobile operators offer roaming services as part of a package of interrelated services, which it says offer very good value for consumers.

But the EC had found instances of roaming charges as high as $15 a minute, and Reding suggested that at some point in the future roaming charges should be abolished all together.

The commission website showed that for a four minute call, roaming prices still vary from as little as €0.20 for a Finnish consumer calling home from Sweden, to €13.05 for a four-minute call by a Maltese consumer in Latvia.

In some cases, roaming prices have even increased over the past six months and one UK operator has just increased the price for roaming by around 33 per cent. Already, most frequent travelers buy a separate pre-pay SIM card for their phones from territories where they travel frequently, and avoid roaming charges completely.

The aim behind Reding's legislation was to reduce roaming charges to a maximum of 30 per cent of the price of each call, and commit to moving gradually to a point where they are not charged. After all, these calls are just IP traffic across international fiber for the most part.

Last minute re-drafts of the legislation are said to be continuing through the week to bring powerful competing commissioners, such as those in trade and enterprise, onside in the case of a vote. It is the eventual ban that may have to go and the ceiling which may have to be lifted, in order to get the legislation passed, as well as a six month moratorium until the regulations come into effect.

Onc source told the UK Financial Times that Reding has already agreed to back down and give the industry six months to establish maximum roaming charges under their own steam.

Cellular operators are utterly cynical on the subject of roaming and use the setting of roaming prices as a way of beating up smaller operators in the entire European region. After repeated attempts to get them to clean house, Reding decided to push this legislation through rapidly.

One of the dissenting voices has been the 25 telecom regulators that operate throughout the European countries, and Reding has already issued them with a warning shot this week, pointing the way towards a single European telecom regulator that would coordinate national market watchdogs and create a level playing field for companies offering internet and phone services.

"If a national regulator in country A applies the EU rules vigorously...while the national regulator in country B adopts a more lenient policy...this gives companies in country B an unfair competitive advantage over companies in country A," she told a German delegation in Brussels this week.

So the regulators are on a warning that if they support local national interests through their approach to telecom regulation, perhaps including this subject of roaming, then they risk giving her enough excuse to bring in a central operation.

Reding has had enormous trouble bringing the regulators of new entrants to the EU to heel, with five new cases of infringement on the European Union telecoms rules announced this week, and 18 other cases only just satisfied. In almost all cases they involve decisions in favour of local incumbents to reduce competition or a lack of legislation for their regulators to have sufficient power to act against the incumbent.

The new cases range from relieving the incumbent of the need for providing services everywhere to failing to grant "rights of way", to new telecoms entrants. Many of the 18 dropped cases related to there being no central telephone directory.

Copyright © 2006, Faultline

Faultline is published by Rethink Research, a London-based publishing and consulting firm. This weekly newsletter is an assessment of the impact of the week's events in the world of digital media. Faultline is where media meets technology. Subscription details here.

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