The Telecom Code, on the road to implementation in Dutch law

This blog was written by Prof. G.P. (Gera) van Duijvenvoorde in a personal capacity.

'Connected Continent'

The new Telecom Code has a long history. The first steps in revising the European telecom framework were taken as early as 2013 by Commissioner Kroes with a proposal for a Connected Continent (1), but no political compromise could be reached on this revision. However, agreement was reached on regulating two topics, namely net neutrality and roaming. With a regulation directly applicable in the member states, far-reaching harmonization in these two areas could be achieved (2). Roaming tariffs were reduced incrementally and net neutrality was firmly established, although there were still discussions about the interpretation of the regulation. For this, the guidelines of Berec (3) the joint national telecommunications regulators, are helpful. On June 11, 2020, the latest guidelines were released, providing a detailed explanation of the net neutrality regulation and thus guidance for regulators and providers.

Telecom Code

In 2016, another review of Europe's telecom rules was launched. There was ambitious talk of a European Electronic Communications Code or Telecom Code. However, the Telecom Code, as adopted on December 11, 2018, is not a regulation, but a single directive merging four of the five directives in the telecom framework. It does not include the ePrivacy Directive and is being reviewed separately. A regulation was published at the same time as the Telecom Code, expanding Berec's powers and aligning them with Berec's new tasks in the Telecom Code (4). In addition to simplifying the guidelines, the need was felt for the Telecom Code to be more supportive of the connectivity objective in the action plans for creating a European Gigabit Society (5). This program aims to ensure that all European households - including those in rural areas - have access to Internet connections with at least 100 Mb per second data speed. The regulatory framework should contribute to this objective and, for example, encourage the construction of advanced electronic communications networks, such as fiber optic networks, and the innovation of mobile networks, such as with 5G.

Mix of regulatory tools

The revision of the Telecom Code provides for the combined use of various regulatory tools to achieve its objectives (6). For example, national regulators are given more opportunities to request information from providers on the rollout of fiber, so that it can also be considered whether there are regions that may be deprived of an advanced telecommunications network. In addition, the basic principle in the Telecom Code remains that competition must be achieved in the market. If there is a threat of insufficient competition then it is possible for national regulator to intervene ex ante. This means that obligations can be imposed on providers with significant market power, for example, to open up their networks. The Telecom Code aims to create a framework to stimulate the necessary investments in networks through predictable rules, but also by giving providers more room to, for example, jointly invest in a network when imposing obligations. If framework conditions are observed in doing so, then providers can benefit from an easing of regulation. Similarly, providers, such as fiber network operators, that operate exclusively on wholesale markets(wholesale markets) may also qualify for regulatory relief. All in all, the new framework seeks to balance competition, investment and innovation, and seeks to ensure that end users, such as consumers, continue to benefit from innovations in networks, and improvements in connectivity, in the longer term. The Telecom Code further addresses specific consumer interests, such as switching to other Internet access providers, including when a bundle of services is purchased. Consumer rights are also extended to smaller businesses.

Implementation in Dutch law - first step taken

Implementation into Dutch law is in two steps.

On June 2, 2020, a bill (7) was passed by the Senate as a no-ballot item that already regulates three issues in anticipation of general implementation: the further lowering of switching thresholds, access in the case of replication barriers, and the examination of the geographical coverage of networks.

First of all, the adaptation of the insertion of 7.2c Telecommunications Act achieves that switching to another provider of an Internet access service, for example through e-mail forwarding, is promoted. At the same time, the prevention of abuse is countered by including the requirement of a written agreement in the added Article 7.2b. Micro and small businesses and non-profit enterprises also benefit from the switching rules.

Second, implementation concerns so-called replication barriers. Replication impediments refer to a situation where there are economic or physical limitations to laying cables or associated facilities, so that they are not replicable by a provider that wants to build its own network. In this situation, Autoriteit Consument & Markt ACM) can impose an access obligation to (parts of) networks. Such an obligation can in principle be imposed on any company (with the exception of small-scale local networks), so not only on providers with significant market power. This access, included in Art. 6.3 Telecommunications Act is therefore called symmetrical access.

Third, a provision will be added to Chapter 18 of the Telecommunications Act on the basis of which the Minister of the Interior and Kingdom Relations can obtain information from a provider for the purpose of conducting a geographical survey of the coverage of electronic communications networks, so that, for example, an integral map can be made of all networks, the capacity of the networks per household and mobile network coverage.

Further steps needed

However, the lion's share of the implementation will take place through a bill Implementing Telecom Code (8) that was consulted in 2019, but whose formal legislative process has not yet started. This bill will lead to an amendment of the Telecommunications Act on a large number of points. For example, the scope of the Telecommunications Act will then also be broadened, bringing not only telecommunications providers but over-the-top providers, such as Google and Skype, under the scope. It will also flesh out new obligations that can be imposed on telecommunications providers, taking into account co-investment agreements or migration of old, legacy infrastructureto new infrastructures, such as migration from copper networks to fiber optic networks.

In the coming months, the legislative process will have to be taken up energetically in order to implement the Telecom Code into the Telecommunications Act on time. It is important to also have a regulatory framework in the Netherlands that supports the connectivity objective, encourages investments in networks and promotes end-user interests. The choice to implement only a very limited number of prioritized topics has been unfortunate: not only is it unclear why the other topics in the Telecommunications Code have lower priority, but also such ad hoc initiatives disrupt regulatory consistency and put pressure on the progress of integral implementation. There is a risk that new ad hoc adjustments, such as the recent proposal for a COVID-19 amendment to the Telecommunications Act (9), on the basis of which telecommunications providers can be required to provide data to the CBS, could further slow the pace of implementation. This is unfortunate because this very crisis has demonstrated the importance of being connected online and that an adequate regulatory framework to ensure connectivity in the long term is crucial.