QUESTIONNAIRE
FOR THE PUBLIC CONSULTATION ON UNIVERSAL SERVICE PRINCIPLES IN E-COMMUNICATIONS
Response from PhoneAbility
PhoneAbility welcomes the opportunity to comment on the Commission’s document, and our responses to the specific questions are as follows.
Question 1: In today's competitive environment, can the market be relied on to meet demand for basic e-communications services from all sections of society, thereby ensuring social inclusiveness?
Response: No, it can not. A free market is not likely to address in an adequate fashion the needs of those consumers whose requirements fall outside the mainstream, unless they are prepared to pay a premium for bespoke types of service.
Question 2: If not, what is the best policy to allow disabled consumers, those on low incomes and those living in geographically remote or isolated areas to access and use basic e-communications services?
Response: Intervention in the workings of the free market with a mixture of regulatory requirements and financial support would provide the best incentive for service providers to bring their offerings to consumers in these categories. The intervention package should be so designed that these consumers are able to benefit from services of the same quality as mainstream users, within the spread of basic e-communications provision that the package is designed to cover. Financial support could consist either of direct reimbursement to service providers, or empowerment payments to eligible users, or a combination of these approaches.
Question 3: Broadband for all is a widely-stated policy objective at national and European level. What role if any should universal service play in meeting this objective?
Response: The principle of universal service is well-established in the European telecommunications arena. Its present limitation effectively to fixed line service provision is a source of great irritation to users and is no longer consistent with the reality of telecommunications services as enjoyed by the great majority of European citizens. Extension of the scope of universal service to cover mobile services and broadband is overdue and this move would fit very well indeed with the objective of ‘broadband for all’.
Question 4: What impacts could an extension of the role of universal service to advance broadband development have in relation to other EU and national policies and measures to achieve full broadband coverage in the EU? What other impacts would be likely to arise regarding competition, the single market, competitiveness, investment, innovation, employment and the environment?
Response: If the well-proven principles of universal service in telecommunications were simply extended to include broadband, the impacts on achievement of full broadband coverage would be entirely positive. Universal service as a safety net to ensure that provision was available and affordable to everyone would mean that ‘hard to reach’ consumers would be brought into the broadband community, where they could add to the totality of broadband contacts across the EU. (This would be the case whether they were ‘hard to reach’ for geographical or economic reasons). By setting the level of ‘basic e-communications services’ – as at Question 1 – at an appropriate point and ensuring that it was subject to regular review, there would be no interference with the workings of the single market in respect of investment, forward development, innovation and competitiveness. Consumers who would have been left out will be added to the user base; creation and marketing of more advanced services will continue in a fully competitive commercial scenario and the choice of whether or not to make use of these advanced services will continue to be a matter for personal inclinations and circumstances.
Question 5: If universal service obligations should prove necessary to achieve the policy objective of broadband for all, at what level (EU or national) should such obligations be defined, taking into account the different levels of market development across the current Union of 27 Member States?
Response: Universal service obligations should be defined at national level, with some light touch guidelines from bodies such as COCOM or the remodelled Regulators Group. This would allow not only for different levels of market development across the EU, but also for adjustments to take account of national priorities and cultural environments. Experience has shown that significant developments tend to be pioneered in particular Member States with special expertise or interest – not always the same ones – and then taken up by others. This seems to be an excellent model, as it allows for expeditious roll-out of innovative concepts coupled with the opportunity for other Member States to view them and, also very important, it allows of a right to fail. If EU harmonized obligations are thought to be necessary, these should not be considered until a majority (perhaps 20) of Member States have taken up the practice.
Question 6: If a common harmonised universal service needs to be defined at EU level, should a mechanism be put in place to balance the need for national flexibility and a coherent and coordinated approach in the EU?
Response: If an approach based upon our response to Question 5 is adopted, there would be no need of any mechanism beyond those currently available.
Question 7: Irrespective of the scope of universal service, are mechanisms whereby funding is provided by the sector appropriate in the context of a regulatory environment that seeks to eliminate distortions of competition and promote market entry?
Response: The answer to that question must depend upon whether the sector is seen as being confined to the e-communications market players. Anyone who uses e-communications, who promotes or sells goods and services through its networks – including local and national governments - is a potential beneficiary of universal service and should be viewed as a possible contributor. The notion that the network operators, ie the telcos, alone should fund universal service costs stems from a view of communications that has ceased to be valid. Funding will need to come from a multiplicity of sources and probably through a variety of mechanisms. It may be that many types of universal service obligation can be funded by telcos without an independent fund, through conditions of licence that oblige each company to provide and pay for certain services for its own customers. 112 services, operator assistance and relay services for deaf people might fall within this category and would be seen as a social obligation for the businesses concerned, reinforced by legislation such as the Equal Treatment Directive. Independent funding would be needed for other instances, such as providing service to a geographically ‘hard to reach’ customer, and mechanisms such as a tax upon e-communications users might be used for this. A hypothecated tax with a wide user base seems to be a fair approach, provided that it is widely based and not aimed at those who would gain least benefit from the measure.
Question 8: In the context of the roll-out of broadband in Europe, is it still appropriate to limit the financial arrangements of universal service to market players in the e-communications sector, while this provision would have wide-ranging benefits outside the sector, for instance, the delivery of information society services and digital content? Are other means of financing more appropriate?
Response: We have dealt with this point in our response to Question 7. Any business that deals with its customers through e-communications will benefit from a more extensive and inclusive user base, and is therefore an appropriate candidate for the contributor’s list. The question then becomes deflected by considerations of cost-effective methods of collection, with the risk that funds may be raised from those parties who are the easiest to identify. We take the view that universal service should be confined to the role of a safety-net, and that investment in the roll-out of advanced broadband should be kept quite separate. Suppliers and users of services that require advanced broadband should expect to pay the real costs, which should be shown transparently. If Member State Governments choose to invest in the growth of infrastructure to support advanced broadband, they may do so in accordance with the existing rules of the European Community. We would not expect to see universal service funds playing a part in this, except in those few marginal cases where basic broadband can only be delivered to individual customers by providing an advanced broadband feed (for example where other technologies will not reach). This does not warrant, in our view, the use of universal service mechanisms to support the general roll-out of advanced broadband.
Final 7.5.2010