“Connected Continent” – Telecoms Single Market regulation – Chapters IV and V
User Rights and Changing Providers
Views of BT Group plc
Introduction The chapters on rights of end-users and changing of providers are proposed by the European Commission as a package of ‘new consumer rights, with all rights harmonized across Europe’, part of a wider context of removing barriers to cross-border activities both for consumers and businesses. While many of the proposed articles appear to align with these objectives, they contain elements of detail which need further clarification (particularly important as the chosen legal instrument is a Regulation), better targeting of the actual problem identified (and evidence – often lacking in the Impact Assessment), or amendment to deliver more practical value for consumers. As currently worded, the proposals risk reducing incentives for competition and innovation, without securing workable or effective protection for end-users. Differentiating consumer and business customers’ needs Although the Commission’s proposals are intended to protect consumer rights, many of the articles confuse the different needs of consumers and business customers (of potentially any type or size), and the absence of a clear and practical definition of ‘micro enterprises’ would mean applying most of the provisions to all business users, regardless of their size or actual requirements. Business customers typically negotiate contracts to meet specific needs (such as high quality of service, quick repair times) so it is not appropriate to apply the same procedures or rules as suit consumers, and to do so would impose costs (eg for new ystems development) for undefined customer benefits. Similar issues arise with switching. The relevant articles [all articles in Chapters IV & V except Arts. 22, 29] should be amended to explicitly distinguish consumer needs from those of different categories of business users. Open Internet We agree with the principles of an open internet proposed by the Commission, preventing anti-competitive blocking and providing transparency, but allowing reasonable traffic management and innovation. We believe, though, that national authorities should have greater flexibility [Arts 23.1, 25.1, 25.2, 25.4] to maintain self-regulatory mechanisms where these already meet the policy objectives and to avoid overly prescriptive detail which, being based on the internet of today, risks inadvertently restricting the innovations and consumer benefits of tomorrow. Transparency and Provision of Information The need to provide full information to end-users is self-evident but the articles need changing to ensure the information provided is:
useful and meaningful (ie actually informing user choice);
correctly targeted (consumers have different needs to business users);
addresses an actual problem (Recital 56 identifies discrepancies of advertised and actual speeds but the implementing articles are far more sweeping in their scope);
actually workable (the definition of ‘actually available data speed’[Art 25.1], which in the proposal is impracticable, and aspects of the ‘consumption control’ provisions [Arts 27.1, 27.2]);
appropriate (eg ‘bill-shock’ does not appear to be an issue for fixed providers but they are subject to the same proposals [Art 21.3]).
Contract Termination The contract termination provisions appear to be based on consumer needs but again have impacts on business customers which are not appropriate. The proposal for a six-month break point [Art 28.2] without compensation is a significant departure from the careful balance of consumer and supplier interests in commonly accepted contractual practice. Customers typically benefit from lower prices when committing to longer terms, as companies can recover costs over a correspondingly longer timeframe. Allowing early termination without compensation will remove business incentives to offer reduced prices, to consumers’ detriment. Innovation, Choice, Competition and Flexibility Overall, the use of a Regulation as the legal instrument (rather than a Directive or Recommendation) risks impeding innovation in some cases, by restricting providers’ ability to make different offers available (for example in the case of contract specifications). By imposing extra obligations on providers, but without the upporting evidence of current problems and/or anticipated end-user benefit, the Regulation will reduce competitive differentiation while at the same time potentially increasing prices. The use of a Regulation also actually increases uncertainty in some of the areas already mentioned, and we therefore propose that ome points of detail are explicitly left to national authorities to interpret, within a strongly articulated set of policy objectives, to allow correct alignment with national markets.
BT Group plc 21/10/2013
BT is one of the world’s leading communications services companies, serving the needs of customers in the UK and in more than 170 countries worldwide.