ARTICLE
23 March 2023

The European Commission's "Connectivity Package" Set To Reshuffle The Telecom Sector

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The European Commission has presented three initiatives to transform the connectivity sector on 23 February 2023 (the "Connectivity Package").
European Union Media, Telecoms, IT, Entertainment
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In Short

The Situation: The European Commission has presented three initiatives to transform the connectivity sector on 23 February 2023 (the "Connectivity Package").

The State of Play: The European Commission has proposed a draft Gigabit Infrastructure Act ("GIA") proposal that would come as an EU regulation, including a set of measures to fast-track the deployment of very high-capacity fixed and mobile connectivity, including 5G. It would replace the "Broadband Cost Reduction Directive." In parallel, the Commission has also launched a public consultation that addresses the infrastructure type and the amount of investments required to drive digital transition; and issues a recommended proposal regarding access conditions to electronic communications networks by operators with significant market power.

Looking Ahead: It is now up to the European Parliament and Council to examine and amend the GIA proposal. Regulations are legislative acts that are directly applicable and binding in all Member States, unlike directives which must be transposed into national law. However, we anticipate that certain rules will require a certain level of implementation. Whether the exploratory consultation will lead to further legislative or regulatory proposal remains open at this stage. The consultation will close on 19 May 2023.

The European Commission unveiled three initiatives to transform the connectivity sector on 23 February 2023.

GIA in Sight

The GIA proposal would replace the Broadband Cost Reduction Directive 2014/61/EU on measures to reduce the cost of deploying high-speed electronic communications networks ("BCRD"). The proposal coexists with other legal instruments supporting the EU "connectivity goals," including the 2018 European Electronic Communications Code ("EECC") Directive and Recommendation 2020/2245 on relevant product and service markets within the electronic communications sector susceptible to ex ante regulation.

The main changes introduced by the GIA with respect to the BCRD are the following:

  • The definition of network operator has been extended to include providers of physical wireless infrastructure like tower companies. The GIA will apply to undertakings providing "associated facilities," as defined in the EECC. As a result, tower companies will become subject to certain obligations and rights provided by the proposed GIA.
  • The GIA introduces an access obligation to the physical infrastructure that is not part of a network but is "owned or controlled" by public sector bodies. The notion of "owning or controlling" will constitute the demarcation criteria for the entities that are subject to access rights.
  • The GIA generalizes the obligation to set up a single point of information ("SIP") for obtaining information about existing physical infrastructure, civil works, and permits. The SIPs are digital access points allowing the exercising of rights online. Several points of contacts could be established, but they should be consolidated in one national SIP.
  • The GIA simplifies the licensing/authorization procedures by requiring Member States to provide consistent rules governing the conditions and procedures applicable for granting permits, including rights of way. This includes the ability to make requests directly via the SIP. The GIA also introduces a tacit authorization deemed to be granted in the absence of a response from the competent authority within the four-month period required to issue the license/authorization, unless this period is extended. Tacit approval for permit granting could thus be directly invoked against the administration before the competent jurisdiction.
  • The GIA introduces the obligation for newly constructed or undergoing major renovation works in-building physical infrastructure to be equipped with a fiber-ready connection.

Exploratory Consultation

The accompanying consultation opened on 23 February 2023 and will close on 19 May 2023. Part of the exploratory consultation deals with the issue of a fair contribution by all digital players to the funding of very high-connectivity infrastructures. Based on the European Declaration on Digital Rights and Principles, a nonbinding communication by the Commission, the exploratory consultation asks stakeholders about the opportunity to introduce a mechanism consisting of a European or Member State digital contribution or fund to finance such infrastructures.

The "Gigabit" Recommendation Proposal

The objective of this proposal is to provide guidance to national regulatory authorities on access conditions to electronic communications networks by operators with significant market power. It has been transmitted to the Body of European Regulators for Electronic Communications ("BEREC") for a two-month consultation. The proposal will replace the 2010 Recommendation on regulated access to Next Generation Access Networks and the 2013 Recommendation on consistent nondiscrimination obligations and costing methodologies to promote competition and enhance the broadband investment environment.

New Directly Applicable Rules

It is now up to the European Parliament and Council to examine and amend the GIA proposal through successive readings. This may also lead to the so-called trilogue procedure to agree on a consolidated text.

Although regulations are directly applicable and binding in all Member States, we anticipate that certain rules, in particular those related to access to public buildings, coordination of civil works, simplified permit procedures, and single information points, may require implementation at the national level.

Furthermore, Member States will have to ensure that their transposition of the BCRD is updated or removed so that there is no conflict between such existing national measures and the new regulation proposal.

The timing for the Gigabit proposal is likely to be much shorter, since the Commission could adopt it alone at the end of the BEREC consultation phase. Whether the exploratory consultation will lead to further legislative or regulatory proposal remains open at this stage.

Five Key Takeaways

  1. The definition of network operator has been extended to include undertakings providing "associated facilities," as defined in the EECC. As a result, tower companies will become subject to certain obligations and rights provided by the proposed GIA.
  2. The notion of "owning or controlling" a physical infrastructure will constitute the demarcation criteria for the entities that are subject to access rights.
  3. The GIA simplifies the licensing and authorization procedures and generalizes the obligation to set up a SIP for obtaining information about existing physical infrastructure, civil works, and permits. It also introduces a tacit authorization deemed to be granted in the absence of a response from the competent authority.
  4. For in-building physical infrastructure, the GIA introduces the obligation of a fiber-ready connection for newly constructed sites or those undergoing major renovation.
  5. Although regulations are directly applicable and binding, we anticipate that rules related to access to public buildings, coordination of civil works, simplified permit procedures, and SIPs will require some implementation at the national level. Member States will have to ensure that their transposition of the BCRD is updated or removed so that there is no conflict between such existing national measures and the new regulation proposal.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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