EU Roaming: Mother of All Battles
Two of the key players involved in the EU Roaming legislation debate were at the OFCOM Convergence Conference and made important comments on their respective positions.
The first was Arun Sarin, CEO of Vodafone, the company who stands to lose the most from the EU roaming proposals not just in terms of revenue, but more crucially in the ability to innovate around pricing and bundling.
The second was Fabio Colasanti Director General of the Information Society and Media, who is the head bureaucrat behind the EU proposals. The more familiar name associated with the EU Roaming is Vyvyan Reding, who represents the unelected political side of the debate. Amusingly, the normally faceless EU bureaucrat coined the term “Mother of All Battles” which seems to indicate the level of noise over at the EU over roaming.
Arun Sarin fired the opening shot with his announcement that he believes that not only is the legislation not necessary given the price reductions occurring in the retail market, but that it is legally unfounded given that the legislation is not in line with the framework by which the EU operates. If true, this is an extremely powerful argument and could hold up any proposals for many years. Personally, I do not think this is an idle threat given Vodafone’s history of using EU Law to prove the UK government wrong with respect to Taxation Law and the amount of money and comparative advantages at risk for Vodafone.
Fabio Colosanti disagreed with Arun Sarin’s choice of words calling the proposed legislation “exceptional”. Also, he indicated the debate would focus of whose fault the proposed legislation was: an industry fault for overcharging or a discretionary proposal thought up on a whim by the EU. Presumably, his line is that if it is an industry fault then exceptional legislation is acceptable and deserved, whereas if it was thought up on a whim then it is unacceptable.
More interestingly was Fabio Colosanti statement about where the “lines in the sand” were drawn in the “mother of all battles”:
My position is that the EU is desperate for positive publicity and wants to muscle in on the popularity of mobile phones. You only have to look at the incredible (and false) headlines written in the Newspapers whenever the EU proposes regulation of the Roaming market. I also believe that allowing the EU to determine retail prices in the mobile roaming market would set an important precedent for all sorts of other markets. In fact, the EU is already claiming responsibility for cheaper phone calls, which personally I think is a little premature. The following presentation funded by the EU gives an idea of the over inflated sense of worth they already feel for themselves.
The first was Arun Sarin, CEO of Vodafone, the company who stands to lose the most from the EU roaming proposals not just in terms of revenue, but more crucially in the ability to innovate around pricing and bundling.
The second was Fabio Colasanti Director General of the Information Society and Media, who is the head bureaucrat behind the EU proposals. The more familiar name associated with the EU Roaming is Vyvyan Reding, who represents the unelected political side of the debate. Amusingly, the normally faceless EU bureaucrat coined the term “Mother of All Battles” which seems to indicate the level of noise over at the EU over roaming.
Arun Sarin fired the opening shot with his announcement that he believes that not only is the legislation not necessary given the price reductions occurring in the retail market, but that it is legally unfounded given that the legislation is not in line with the framework by which the EU operates. If true, this is an extremely powerful argument and could hold up any proposals for many years. Personally, I do not think this is an idle threat given Vodafone’s history of using EU Law to prove the UK government wrong with respect to Taxation Law and the amount of money and comparative advantages at risk for Vodafone.
Fabio Colosanti disagreed with Arun Sarin’s choice of words calling the proposed legislation “exceptional”. Also, he indicated the debate would focus of whose fault the proposed legislation was: an industry fault for overcharging or a discretionary proposal thought up on a whim by the EU. Presumably, his line is that if it is an industry fault then exceptional legislation is acceptable and deserved, whereas if it was thought up on a whim then it is unacceptable.
More interestingly was Fabio Colosanti statement about where the “lines in the sand” were drawn in the “mother of all battles”:
- Retail regulation was mandatory. The mobile companies seem to have indicated all along that they would accept wholesale regulation of prices, but retail regulation of prices was a step too far. The only comment from Fabio Colosanti was that without retail regulation the legislation would not have teeth;
- A sunrise clause was not necessary. The UK government have proposed a compromise that a sunrise clause should be inserted in the legislation, whereby if retail prices reduce to an acceptable level within a given time period through the natural operation of market forces then retail regulation would be unnecessary. The EU bureaucrats will not accept sunrise clauses claiming they are too complex for the Ministers and Parliament to understand. Not only is this line of argument weak, but incredibly condescending to elected Members of the EU Parliament; and
- Applying cap’s at a average rate rather than for a peak rate. The example given was a holiday maker writing to The Sun complaining post-legislation that his charges whilst on holiday in Italy were still high. The only reply the EU could give was that the mobile operator was still within the legislation because a businessman who was using the phone on a far more frequent basis was paying a lot lower for the charges.
My position is that the EU is desperate for positive publicity and wants to muscle in on the popularity of mobile phones. You only have to look at the incredible (and false) headlines written in the Newspapers whenever the EU proposes regulation of the Roaming market. I also believe that allowing the EU to determine retail prices in the mobile roaming market would set an important precedent for all sorts of other markets. In fact, the EU is already claiming responsibility for cheaper phone calls, which personally I think is a little premature. The following presentation funded by the EU gives an idea of the over inflated sense of worth they already feel for themselves.
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