Original URL: http://www.theregister.co.uk/2010/06/08/eu_caps/

Operators' EU roaming challenge sent home

Caps on roaming are legal and proportionate. Sorry

By Bill Ray

Posted in Mobile, 8th June 2010 12:21 GMT

A legal challenge to the EU's capping of roaming rates, brought by the UK's four biggest networks, has failed at the European Court of Justice.

Strictly speaking the case was against the UK's implementation of the rules, and thus was launched at the High Court of England and Wales in 2007 when the new rules were passed by the EU. But the High Court passed the case on to decide if the EU had the legal right to impose such caps, and if they were proportionate to the problem. Turns out that it does, and it was.

The networks argued that the legal basis for the caps, that they would improve the functioning EU market as allowed by Article 95 of the EU Treaty, wasn't applicable, and that even if it was there was no reason to set retail rates when wholesale rates could have been capped instead. But the court ruled that the EU did have the right, and that retail caps were an appropriate measure.

The EU could have imposed a wholesale cap: limiting the amount that operators were allowed to charge each other for roaming, then relying on that to reduce retail prices. It might have worked too, but it would not have provided the PR coup for which then-Information-Commissionaire Viviane Reding was looking - reinventing the EU as fighting for the rights of consumers against the spectre of profiteering multinationals.

Key to the EU's victory were the repeated calls made by Ms Reding and asking the industry to cut prices voluntarily before she felt obliged to impose caps. Those caps arrived in 2007 with an implementation schedule that requires calls made during roaming (within Europe) to cost only €0.39 a minute by 1 July 2010, with received calls costing only €0.15 and an EU study of how effective the caps have been so far due at the end of June.

When the caps were introduced there was much talk of similar limits being imposed on data roaming, but other than requiring additional authorisation when the data bill hits €50 that hasn't happened. The EU got occupied with the international financial collapse, and Viviane Reding moved on, but data caps will no doubt rise again next time the EU is looking for some good PR. ®