Last September, the EU fleshed out its plans for a major telecom regulatory overhaul. The package of proposals, championed by EU Digital Agenda commissioner Neelie Kroes, included the very significant declaration of an EU dedication to protecting net neutrality . From a digital social justice standpoint, net neutrality is a critical right  so the EU’s announced reform package was, in many ways, some very good news :
Europe Lays Out Its Most Ambitious Reform Plan Yet: No More Roaming Premiums, Enforced Net Neutrality, And More
Posted Sep 11, 2013 by Ingrid Lunden
The European Commission  has over the years been chipping away at how big carriers have milked European consumers in areas like international calling charges and broadband usage for certain content. Now, in a spirit of getting the region of 28 disparate nations to behave as one, the regulators have taken their biggest swing of the bat yet: a new legislative package that proposes to cut out international calling premiums and services that offer different broadband speeds depending on the content broadcast; and on the carrier side new rules that would effectively cut down red take to make Europe into a single market.
The Commission, which formally laid out its intentions today but has been working on them for a while , is calling the plan its most ambitious in 26 years. If it gets approved, it could have huge implications not just for consumers and their big carrier overlords, but also on newer players like OTT video providers and startups offering networked services.
But whether the EC will ever manage to get big carriers and countries to agree to it will be another story. We’ve already seen lobbyists making pre-emptive attempts to scupper  the proposals, with Europe forging ahead anyway . If approved, the first changes could start to take effect by July 2014.
“Further substantial progress towards a European single market for telecoms is essential for Europe’s strategic interests and economic progress,” EC president Jose Manuel Barroso said in a speech today in Brussels, “for the telecoms sector itself and for citizens who are frustrated that they do not have full and fair access to internet and mobile services.”
VP Neelie Kroes, the Digital Agenda commissioner who has long been arguing for these changes, was behind this new package. “The legislation proposed today is great news for the future of mobile and internet in Europe,” she said in a statement. “The European Commission says no to roaming premiums, yes to net neutrality, yes to investment, yes to new jobs. Fixing the telecoms sector is no longer about this one sector but about supporting the sustainable development of all sectors.”
Right now, the EC estimates that telecoms services account for 9% of Europe’s digital economy “because all sectors increasingly depend on connectivity to be globally competitive and deliver services.” The idea is that by bringing down some of these existing barriers, that percentage — and the economy — will grow. Despite many years of incremental reforms, “there is no telecoms company that operates across the whole EU, and both operators and customers face differing prices and rules,” the Commission noted in a statement today.
Here’s the run-down of some of the highlights of the new proposals, with the latest draft of the proposals, and a summary, embedded below that.
Single set of rules for carriers to follow: Those who are rolling out services across all 28 markets in Europe would need only a single authorization rather than 28.
No more roaming premiums on inbound calls: From July 2014, no more incoming call charges across the EU. Also carriers will either offer single European price plans or the ability to let consumers easily select carriers that offer calling plans outside a user’s home market. (Since 2012, carriers already have been forced to offer cheaper prices for mobile data; this builds on that.)
No more roaming call charges outbound: This applies to both mobile and fixed calls and would make the price of a call within the EU the same price as a call in your home country. (Long distance becomes the same price as local.)
Net neutrality: Making sure broadband carriers are not short-changing consumers over certain content by throttling speeds has been a long-argued issue in Europe and other parts of the world. This is the EC’s attempt to right the issue once and for all here. Carriers will not be allowed to block or slow down delivery of certain content; they will however be allowed to offer different kinds of services that allow for some streaming (such as data-intensive video) and not others. Users who feel they are getting shortchanged can walk away with no penalties, or as the EC puts it, “the obligation on providers to provide unhindered connection to all content, applications or services being accessed by end-users – also referred to as Net Neutrality – while regulating the use of traffic management measures by operators in respect of general internet access.”
The EU’s declared dedication to net neutrality was great news back in September, but after the recent US appeals court ruling striking down net neutrality in the US , a dedication to net neutrality also becomes a business opportunity because if the US wants to turn itself into the land of internet inequality there’s nothing stopping the EU from loudly pointing this out. Of course, it helps if the EU’s version of net neutrality actually results in net neutrality :
Can Europe really offer startups a better deal on net neutrality?
By David Meyer
Jan. 15, 2014 — 7:15 AM PST
Europe’s digital chief is already claiming that “newly disadvantaged U.S. startups” should move across the Atlantic — but a similar net neutrality disaster could still happen in the EU, if key proposals aren’t tightened up.
As net neutrality goes down in flames  stateside…
Neelie Kroes @NeelieKroesEU
Watching US #netneutrality news . Maybe I shd invite newly disadvantaged US startups to EU, so they have a fair chance http://online.wsj.com/news/articles/... 
5:35 AM — 15 Jan 2014 
Appeals court strikes down FCC’s net neutrality rules 
A federal appeals court on Tuesday struck down the Federal Communications Commission’s open Internet rules on Tuesday, in a ruling that could give broadband providers more room to charge content... 
Wall Street Journal @WSJ 
156 Retweets 54 favorites 
Kroes, the European Commissioner in charge of the digital economy, has a point. The potential end of net neutrality rules is going to be really bad for U.S. consumers and startups  alike (as my colleague Stacey Higginbotham has noted , the likes of Google and Netflix are actually winners in this scenario, as they have deep pockets).
However, some may dispute Kroes’s characterization of Europe as a safe haven. The Commission recently adopted proposals  (that need to be ratified this year) that many see  as falling short of promising true net neutrality.
“Providers of content, applications and services and providers of electronic communications to the public should therefore be free to conclude specialised services agreements on defined levels of quality of service as long as such agreements do not substantially impair the general quality of internet access services.”
In other words, ISPs should be able to charge content providers — offering, say, IPTV or videoconferencing services — for joining a new fast lane, as long as the regular internet doesn’t suffer. As network investment would probably gravitate towards that fast lane, good luck with maintaining the quality of all the other traffic over time.
One major point in Kroes’s favor is this: the European broadband scene is for the most part much more competitive than that in the U.S. – there are simply more players in most areas, making lock-in less of an issue. On top of that, another part of her telecoms reforms would ensure that people can switch provider at no penalty if they think they’re not getting a good-enough service, so there would arguably be a good incentive to keep everything running smoothly.
But that’s about consumption. On the supply side, there’s still a good deal of scope in there for replication of the scenario the U.S. now faces, with big players able to outspend the minnows and their pesky innovation, and buy their way into “free with the package” prominence. The devil is in the details, and fans of competition will be hoping for the language of the EU proposals to be tightened up before they hit the European Parliament for a vote.
So it appears that the EU’s telecom overhaul might actually protect net neutrality. But it also might just end up incentivizing telecoms to no longer upgrade their lower-cost data-infrastructure since the proposed rules would only prevent companies from offering service packages that would “substantially impair the general quality of internet access services”. Upgrading and maintaining the “general quality of internet access services” doesn’t appear to be a focus of the proposed legislation.
Net Neutrality or Business as Usual?
Still, as the above article points out, due to the highly fragmented EU telecom market — where no EU-wide oligopoly exists — market competition alone might enforce some degree of net neutrality even if the troubling loopholes persist. Hope springs eternal! Unfortunately, large players in the EU telecom market are already lobbying for exactly that kind of large scale consolidation. Large players with hopes and dreams of their own. Large players like Deutsche Telekom :
Europe’s Tech Lag and A Leg Up From Snowden
By Diane Brady January 20, 2014
Deutsche Telekom’s new CEO and the man behind Angry Birds seem to agree on one thing: the scandal over U.S. spying on allies could come at a cost to U.S. companies. At the opening session of Munich’s DLD Conference on Jan. 19, Rovio chief Peter Vesterbacka called it “the best marketing campaign for European companies ever,” forcing business leaders to think twice about storing sensitive data in the U.S. For Timotheus Höttges, who took over the top job at Deutsche Telekom a few weeks ago, the key is how they rebuild trust.
The depth of feeling around the issue signals that President Obama’s promise to rein in the National Security Agency’s reach  may not be sufficient to address allies’ concerns. As Paul-Bernhard Kallen, a fellow panelist and CEO of Hubert Burda Media, put it: “Everybody has been blaming China. What is now apparent is that it’s not the old friends who are the real friends.” Kallen, whose media company hosts the pre-Davos gathering, was also joined onstage by Lutz Schüler of German cable operator Unitymedia Kabel.
Together, the four men debated what it would take to accelerate competition in the fragmented and highly regulated European market. Telecom chief Höttges argued the first step is to ease up on rules, arguing that “we’re regulated on whatever we do.” Second, he wants an environment that allows him to charge sufficient revenues to make a profit. While U.S. and European data traffic have both jumped 900 percent over the past five years, he said, that’s enabled U.S. telecoms to grow annual revenues by roughly 35 percent while European carriers’ have seen sales drop. The comparison with Asia is similar. “There seems to be a digital divide between Europe and the rest of the world,” said Höttges. With more than 200 carriers in Europe, vs. four in markets like the U.S. or China, that may not be a surprise.
One of the biggest issues for the European leaders was preferential treatment of foreign players. Unitymedia’s Schüler complained that Germany gave Netflix access but struck down efforts to create a homegrown version through a partnership with ProSieben and RTL. “The change which has to happen is deregulation,” he said. “There’s no digital brand coming out of Germany …To the Googles of this world, Deutsche Telekom is a dwarf. We all need scale.”
Kallen agreed, talking about the need for a level playing field. A website that operates out of Luxembourg, for example, can sell e‑books into Germany at a negligible rate while a local producer has to charge a 19 percent sales tax. “My biggest concern is that the regulatory environment isn’t fair to all the competitors,” he said.
Note that when Deutsche Telekom’s CEO says he wants “an environment that allows him to charge sufficient revenues to make a profit,” what he’s saying is “I want to  get rid of  net neutrality ”.
Also note that when Deutsche Telekom’s CEO declares, “to the Googles of this world, Deutsche Telekom is a dwarf. We all need scale,” what he’s saying is the EU’s telecom market needs to consolidate into an oligopoly  with Deutsche Telekom near the top . And based on current industry trends, massive consolidation of the EU telecom sector into an oligopoly is probably what we should expect :
The Wall Street Journal
Europe Awaits Wave of Telecom Consolidation
Companies, Bankers Eye Takeover Targets; Telefónica-KPN Deal a Litmus Test for EU
By Sam Schechner and Eyk Henning
July 28, 2013 9:37 p.m. ET
A rising tide of deal making in Europe’s troubled telecom sector is spurring more companies to dip their toes in the water, raising hopes for a long-awaited wave of consolidation.
With Telefónica SA’s agreement last week to buy the German mobile-phone unit of Dutch telecom company Royal KPN NV in a deal worth €8.1 billion ($10.6 billion), the value of European mergers and acquisitions in the telecom sector has hit a more than decadelong high. This comes on the back of cheap financing, possible regulatory changes and executives’ fear of being left behind.
Now, with the German mobile deal representing a key test of European Union willingness to green light deals that reduce the number of players in a given country, bankers and telecommunications executives say they are already looking at other possible takeover targets.
“I think we are in the beginning of this process, of this cycle,” said Stéphane Richard, chief executive of France’s Orange, on a conference call to discuss the company’s first-half results. “As far as Orange is concerned, we are prepared to play the maximum role in this consolidation move if it really happens.”
The fallout could eventually be a deep—and executives say overdue—shakeout in Europe’s patchwork telecom industry. Across the EU, well over a hundred mobile and fixed operators in 28 countries are owned by over 40 major groups. That compares with just four big mobile operators, and an increasingly consolidated cable business in the U.S.
Market conditions are making consolidation easier. Fragmentation and competition have pushed down profits and share prices. Shares in European telecom companies in the Stoxx 600 index have fallen by more than 74% since February 2000. In that time the broader Stoxx 600 index has declined by only 22%.
Antitrust policy at the EU’s executive arm, the European Commission, and within some European countries has been an obstacle to in-country consolidation. In France, for instance, a fourth mobile operator launched just last year, and the head of the country’s antitrust watchdog made clear in March that he would block any deal that reduced the number of actors.
But that may be starting to change elsewhere. Last year, Brussels approved the takeover of an operator in Austria, bringing the market from four operators to three—albeit with hefty conditions.
Now another EU commissioner, Neelie Kroes, is proposing new continentwide rules for the telecom sector that are aimed in part at encouraging cross-border competition. The proposal, which is still being discussed, “should support the case for consolidation,” analysts from HSBC said in a recent note.
Telefónica’s German deal would provide perhaps the biggest test yet of the new wave. “If this deal goes ahead and gets validated by Brussels, you give the green light to four-to-three deals in other countries,” said Frederic Boulan, a telecommunications analyst at Nomura International PLC.
“We have too many players in Europe,” Telefónica Chief Operating Officer José María Alvarez-Pallete said last week on a conference call to discuss results. “Consolidation is going to happen.”
Snowden Affair or Business As Usual?
We’ll clearly have to wait and see  how much consolidation is in store for the EU telecom, but it’s obvious that the EU telecom market is facing some major changes in coming years. Some of those changes will no doubt have been catalyzed by the Snowden affair. But, business being what it is, a lot of those changes will also be driven by business as usual :
NSA Scandal May Help Build Cyber-Barriers
By Susan Crawford Dec 27, 2013 8:00 AM CT
The smooth flow of online communication and commerce between Europe and the U.S. is at risk of interruption, thanks in part to naked opportunism on the part of European telecommunications giants. If the governments involved fail to keep online barriers between the continents low, the Internet’s potential to be an engine of global economic growth will be constrained.
Take Deutsche Telekom AG (DTE) (DTE), the largest provider of high-speed Internet access and wireless services in Germany and the largest telecommunications organization in the European Union. To expand, the company will have to acquire  additional communications companies; in order to do so, it hopes to free itself from the German government’s 32 percent ownership  in the company. It has also expressed a desire to diversify into non-telecommunications lines of business, such as technical-services delivery.
The snooping scandal at the U.S. National Security Agency may help Deutsche Telekom achieve both these goals. T‑Systems International GmbH, the company’s 29,000-employee-strong distribution arm for information-technology solutions, has been losing money selling systems-integration and data-processing services. Now, in response to customers’ loss of trust in American services, Reinhard Clemens, T‑Systems’ chief executive officer, says he wants to refocus  the company on providing cloud services.
Deutsche Telekom has also proposed to help Europe avoid NSA surveillance by creating “Schengen area routing,” a network for the 26 European countries that have agreed to remove passport controls at their borders. This network would supposedly allow these nations to securely exchange data among themselves. Conveniently, the Schengen area does not include the U.K., which is now known to be closely cooperating with the NSA.
Deutsche Telekom undoubtedly thinks that it will be able to collect fees from network operators in other countries that want their customers’ data to reach Deutsche Telekom’s customers — and that the company has the market power to raise those tolls ever higher. As things stand, networks already try to avoid Deutsche Telekom’s wires when routing Internet traffic to German customers because the company refuses to swap traffic on a no-payment basis — the common practice  of competitive carriers around the world.
With hundreds of lobbyists in Berlin, Deutsche Telekom can see to it that if any German legislator is asked what to do about the NSA problem, he or she will respond with “Secure routing of traffic.” Surely this secure Schengen area routing would be even smoother if Deutsche Telekom owned more of the telecommunications operators involved.
Meanwhile, European telecom regulators, anxious to help European companies avoid the risk of being bought up by Verizon Communications Inc., AT&T Inc. or Carlos Slim, the Mexican wireless monopolist, are encouraging consolidation  — with Deutsche Telekom’s full support. “Now is the right time” for consolidation, Deutsche Telekom Chief Executive Officer Rene Obermann said in November.
Regulators are being told by the telecommunications incumbents that European communications will be more secure when fewer operators can work together to raise electronic barriers at the borders.
The more things change the more they stay the same  it seems. Still, changes of some sort  appear to be on the way for the internet as we know it and it remains  very unclear what shape the telecom overhaul will finally take this year . So stay tuned EU internet users! Although it might take years of industry consolidation  to discover the real fate of net neutrality in the EU so you may not want to stayed tuned via online streaming services. That  could  get expensive .