Last September, the European Commission issued its proposal for a Directive establishing the European Electronic Communications Code(“ECC”). The ECC aims at updating EU’s regulatory framework for electronic communications (“EC Regulatory Framework”) by responding to the evolution and changes that have taken place in technology, market structures and communication networks, as well as in consumers’/businesses’ usage and demands. When finally adopted, the ECC shall replace and consolidate the four key EU telecom directives (i.e. the Access, Authorization, Framework and Universal Service Directives) into a single piece of legislation.
One of the most interesting aspects dealt by the ECC refers to the regulatory treatment of over-the-top (“OTT”) services. Simply put, OTT services are content, services or applications provided to the end user over the public Internet. As they are offered through the public network, OTT services can be (and are generally) rendered by parties other than the internet access provider to which the end user is connected. Examples of OTT services include voice and video calling (e.g. Skype, FaceTime or Viber), text messaging (e.g. iMessage or WhatsApp), email (e.g. Gmail), video content delivery (e.g. YouTube or Netflix) and social networking (e.g. Facebook).
When it comes to voice and messaging applications in particular, OTT services have been subject to the question of whether they should be regulated in the same manner as traditional “electronic communications services” (“ECS”). Telecommunications companies, which provide ECS, generally argue in favor of an equal treatment, for the contrary creates an uneven playing field in which OTT services compete with traditional phone calling or SMS messaging from a more favorable position, free from the sector-specific regulatory burdens applicable to telecommunications companies. Across Member States, the current blurred definition of ECS has encouraged different views, with recent cases in which the German (regarding Gmail) and Belgian (with respect to Skype) regulatory authorities showed their tendency towards an equal regulatory treatment.
In the middle of the discussion, the ECC touches upon the subject and clarifies that OTT communications services shall be considered ECS and, therefore, be subject to the EC Regulatory Framework. The ECC makes this by amending the definition of ECS to include “interpersonal communications services” (“ICS”). ICS will encompass most of OTT communications applications, for ICS are defined as those services (i) that enable interpersonal and interactive exchange of information via electronic communications networks (i.e. voice calls, but also all types of emails, messaging services, or group chats); (ii) between a finite number of natural persons determined by the sender of the communication (what excludes linear broadcasting, video on demand, websites, social networks, blogs or exchange of information between machines); and (iii) in which the interpersonal and interactive communication facility is not a purely ancillary feature to another service (e.g. a communication channel in online games).
In addition, the draft ECC makes a distinction between two types of ICS, imposing a different level of regulatory requirements to each of them:
- Number-based ICS – those which connect with the public switched telephone network – shall be largely subject to the same level of regulation as traditional telecom services. Rules that would apply to number-based ICS cover inter alia contract duration, transparency, information on quality of service, number portability led by the receiving provider, consumption monitoring tools, comparison tools for both prices and quality of service or switching rules for bundles to avoid lock-in effects.
- Number-independent ICS – those which do not connect with the public switched telephone network – shall observe a much lower level of regulation. In this sense, the draft ECC establishes that they should only be subject to obligations where public interests require applying specific regulatory obligations to all types of ICS, regardless of whether they use numbers. This relates in particular to security provisions and, in the event of an actual threat to end-to-end connectivity or to effective access to emergency services, measures to ensure interoperability (e.g. through standardization processes).
Whilst the new regime might not achieve the full level playing field that traditional telecoms were lobbying for, it brings OTT players and telecommunication companies closer. An approach that is reinforced by the recently issued Commission’s proposal for an ePrivacy Regulation which, among other topics, seeks to ensure that OTT services guarantee the same level of confidentiality of communications as traditional telecoms operators.
The two referred pieces of legislation are drafts and might still suffer substantial changes. But whatever happens, they are proof that when it comes to electronic communications, telecommunications companies are not any more the sole main actors. OTT players also have a major role.