The combination of wider access to mobile broadband, greater usage of smartphones and the evolution of Internet technology has fostered new mobile and communication services often delivered by powerful Internet players through digital platforms. This new competition for telecoms operators has made some of today’s regulation redundant, according to a new report published by the GSMA.
The NERA Economic Consulting report, A New Regulatory Framework for the Digital Ecosystem, also found that digitisation has fundamentally altered the competitive dynamics and accelerated the pace of innovation. Although new Internet-based services compete directly with traditional communications services, including those offered by mobile operators, they are seldom subject to the same rules, including those focusing on the collection and use of customer data.
The study is designed to contribute to the discussion on the reform of the European telecoms framework. The European Union can take the lead, in regulatory modernisation, by adopting new rules that promote sustainable competition, innovation and consumers’ long-term interests.
The best way to account for today’s dynamic, competitive markets is to establish a principles-based, flexible regulatory framework that promotes consumers’ long-term interests across all services and platforms through consistent consumer protection rules, while removing barriers to investments and innovation.
In the report, NERA Economic Consulting recommends that policymakers incorporate three key principles as they work to modernise regulatory frameworks. Firstly, regulations should be based on functionality, not the type of company or technology that delivers them. Secondly, measurable, performance-based approaches should be favoured over prescriptive regulations, promoting market dynamism and delivering increasing benefits to consumers. Finally, policymakers should take a fresh look at legacy rules and discard those that are no longer relevant, applying a consistent set of criteria throughout the ecosystem.
A regulatory framework based on these principles will provide more consistent protection to consumers, fostering usage and adoption through increased trust, while promoting investments and innovation that lower costs.
The debate on regulatory modernisation is well under way in Europe, and other countries around the world will look closely at how Europe reforms its telecom rules. The new report, which lays out a clear, future-proof, set of principles, can make an important contribution towards identifying a dynamic and durable European regulatory framework.