The Digital Single Market is still a step behind on telecoms

The EU’s fixed telephone market is diverging. The number of fixed telephone subscriptions is rapidly declining in some EU countries, including in my country, Finland, where there were less than 600,000 fixed telephone lines at the end of last June. That number means an 80% fall in 15 years, leaving less than 1% of modern households only using a fixed telephone in the country. Some telecoms operators don’t even sell fixed telephony subscriptions to households any longer, since everyone has a mobile phone. In France, though, the situation is completely different. The number of fixed telephone subscriptions continues to increase, and is now at almost 39m lines. Such significant differences in the telecommunications market structure add to the challenge of finding a common view for our future regulatory framework.

The decline of fixed telephones in Finland explains why the Finnish regulator FICORA is not interested in regulating voice call termination in the fixed network today. A year ago, FICROA proposed lifting the regulation in the fixed termination market, but the draft decision was opposed by the European Commission and the Body of European Regulators in Electronic Communications (BEREC). For most European regulators, it still makes sense to them to regulate fixed telephone operators. The fixed-line service is indeed still important for instance in France, Germany and the UK.

The European Commission has now launched its strategy for the Digital Single Market. The objective being to modernise the rules so as to make the EU’s single market fit for the digital age. Next year, the Commission will propose new directives regulating telecommunications markets in the EU. One of the key questions is whether Europe should have harmonised rules for the fixed telephone market. The existing regulatory framework has detailed rules on fixed telephony, and the directive on universal service and users’ rights targets fixed telephone operators in several articles. But is there any point in continuing such harmonisation efforts if national markets are already as divergent as they have grown today?

Recently, BEREC gave answers to the Commission on a wide range of regulatory questions. The common position that emerged did not propose any deletion of sector-specific regulations. I would argue, however, that regulation of an old technology such as the fixed telephone service is not necessary. The rules for the Digital Single Market will probably come into force in 2020, and they should stay up-to-date for around 10 years. It at the very least seems pointless to regulate the provision of public pay phones and printed telephone directories. Hopefully, the new regulatory framework for the EU will instead be truly forward-looking and technology neutral.