Is regulation of fixed telephony necessary in the digital single market?

The number of fixed telephone subscriptions is rapidly declining in some EU countries. In Finland fixed telephone lines are less than 600.000 in the end of June 2015. The number of fixed telephone lines has decreased in 15 years by 80 %. Less than 1% of the households are nowadays using only fixed telephony in Finland. Some telecom operators are not selling fixed telephony subscriptions to households any longer, since everyone has a mobile phone.

The statistics show that the market of fixed telephony is diverging in the EU. In France the situation is completely different from the Finnish market. The number of fixed telephone subscriptions has still increased to almost 39 million lines. Significant differences in the telecommunications market structure puts pressure on finding common views for the future regulatory framework.

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

Regulation of the fixed telephone operators will be subject of discussion in the EU. The Commission has launched its strategy for the Digital Single Market. The objective is to modernize the rules to make the EU's single market fit for the digital age. Next year the Commission will propose new directives regulating the telecommunications markets in the EU. One of the questions is whether to harmonize the rules of the fixed telephony market. The existing EU regulatory framework has detailed rules on fixed telephony. The directive on universal service and users' rights targets fixed telephone operators in several articles. Is there any point of continuing harmonization if the national markets are divergent?

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

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Martin Andersson

Chief specialist, FICORA

Key words: Telephone , Land-line phone , Markets , Mobile phone , Networks , Subscription , Blogs

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