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The EU has regulated mobile roaming charges–here’s why OTT services should be next

(Image credit: Image Credit: Varnish Software)

Through the Digital Single Market, the EU has standardised mobile tariffs in the EU, allowing users to “roam like at home.” It’s great news for European travellers who can use their domestic plans or rates while visiting member states. As for those who’ve been turning to OTT (over the top) apps like WhatsApp and Messenger to avoid charges abroad, there may be changes coming your way, too.   

In September of 2016 the European Commission proposed a European Electronic Communications Code (EEC), which aims to establish a new regulatory framework for electronic communications. It’s a meaty piece of legislation that is expected to be ratified and transposed into national law in Spring 2017. Among other effects, it could mean big changes for web-based communications made within the EU.

Up until now, many telecoms and OTT communication providers such as WhatsApp, Google Hangouts and Skype have awaited the EEC with bated breath. Fundamental wholesale regulatory changes like these only happen every 10-15 years, which represents an eternity in a fast-moving industry like telecoms. Lawmakers now have the gargantuan task of protecting the old guard, managing the new kids on the block, and pre-empting future innovations that will be coming down the track. 

EU nations urge restraint

Last year several EU countries, understanding the repercussions of imposing unnecessary burdens on a disruptive industry, penned a joint letter to EU commissioners Andrus Ansip and Günther Oettinger, warning against increased regulation for OTT providers. They called for a concurrent reduction in regulatory burdens for traditional telecoms operators facing competition from the OTT providers, pointing out that many consumers now lump OTT communications services into the same category as more traditional telecoms providers. 

OTT services certainly help consumers and businesses achieve the same communications goals, but their methods are quite different. They don’t purport to offer a telephony service; instead, they only claim the data that crosses their network. The fact that these bits and bytes are often voice and video packages is apparently beside the point.

Is this all just semantics? Should OTTs be able to sidestep the rules with clever loopholes? If OTTs represent the Wild West of the telecoms industry, then shouldn’t outliers be brought to heel, to be civilised and forced to mingle with the rest? 

Preparing the ground for an innovation rush

Perhaps the very emergence of OTT services (and that they’ve been able to subvert a few rules along the way) is a sign that the regulations themselves need updating. If this is the new direction where things are heading, surely it would be nonsensical to try and impose outdated, ill-fitting regulations on a niche group of very popular service pioneers, right? With Ovum’s estimates that the monthly active users for chat apps will exceed 2.3 billion in 2017 worldwide, it’s time to change the conversation and to look at OTT communications in a new light.

Consider the biblical metaphor of pouring new wine into old wineskins. Doing so would cause the skins to burst, the wine to spill and the wineskins to be ruined. National governments have intervened because they see that simply extending old-world regulations on new disruptive services could stifle innovation and have a negative impact on the very people the EU has a mandate to protect, the public. A revamped framework could very well create the environment the market needs to thrive. Regulatory forces could institute positive change if they reflect present and future market dynamics.

For instance, wouldn’t it be useful if messaging services (both SMS and OTT) could provide access to emergency services? Current emergency services cannot support this, however, the technology available today could. Some countries are taking the initiative on their own, as with the UK where the emergency SMS service lets deaf, hard-of-hearing and speech-impaired people in the UK send an SMS text message to the UK 999 service to be passed to the police, ambulance, fire rescue or coastguard.

Another example of OTT’s potential use is that of geographic telephone numbers, tied to distinct geographic zones or even countries. These were structured long ago as a response to limitations on the technology at the time, as well as in-country regulations. A new European framework could, if worded carefully, do away with the need to prove a user’s physical location. With this potential in mind, the right regulation can lift the lid on innovation and open new doors. 

Of course, changes in geographical zones can have a direct impact on number portability. At present, it’s not possible for a company with both a global presence and a local flavour to reuse a number within national borders (i.e., from Paris to Lyon), or port numbers across country boundaries (i.e., Paris to Brussels). Consider, however, the commercial opportunities of enabling fixed number portability as part of the Digital Single Market for voice services across Europe. A telecoms company could increase their customer base from a few million to 500+ million by enabling backwards compatibility.

Now, regulation is not all doom and gloom. It protects end-user interests, ensures a level playing field within the industry, and it guarantees a high quality of service. We’re all familiar with starting an OTT VoIP call with: “Hi, can you hear me?” Regulations (and higher standards of service that go with them) could take the uncertainty of using these services to make voice calls and put them on par with their more traditional and regulated telephony counterpart. 

A glass half full

A regulatory review doesn’t need to be foreboding, but instead quite the opposite. If companies want to innovate by integrating communication capabilities into their services, the onus will be on telecoms providers to comply with legislation, or miss out. It’s similar to the choice mobile carriers now have to make within the EU: comply with the flat roaming tariffs or update their roaming policies within the EU.

For OTT services, it’s a delicate balancing act with a lot to gain and even more to lose. It’s not uncommon for a local telecom company to spend more than one year realigning processes and systems to comply with legislative changes. Consider the blood, sweat and tears it would take for a global player to realign an entire business model that has been built on circumventing regulation across all the countries they operate in.

What we’ll likely see with the EEC, similar to what we expect from the new “roam like at home” tariffs, is that customers will reap the benefits of compliance as default. Providers, on the other hand, would need to make plans and select telecoms partners to help manage and navigate the new changes in OTT regulations for them. By working within an EU regulations framework, communication services could transform their businesses, and even the industry, for the better. 

Johan Peetermans, Head of Carrier Relations, Voxbone (opens in new tab)
Image Credit: Varnish Software

Johan Peetermans is Head of Carrier Relations at the global communications API provider Voxbone. His 10 years of telecom experience ranges from working with growing B2B companies to major global service providers.