On 25 August 2020, the European Commission proposed a regulation to set Europe-wide (lower) voice termination rates of 0.2 euro cents per minute for mobile voice and 0.07 euro cents per minute for fixed voice.
The introduction of these new termination rate ceilings are subject to: a three year ‘glide path’ (to 1 Jan 2024) from current termination rates for mobile voice termination, and a number of national derogations.
The definitions of mobile and fixed voice termination are resolutely technology neutral – the regulation will apply to all calls which terminate on a mobile or fixed number in the national numbering plan regardless of the underlying delivery technology. The termination rates apply to both intra-EU calls and calls from outside the EU with equivalent voice termination costs and/or cost regulation.
The proposal for voice termination rates accompanies an updated draft recommendation on markets for ex-ante regulation under the new European Electronic Communications Code due to be implemented across Europe by 21 December 2020. In addition to the fixed and mobile voice termination markets, in which rates are to be set Europe wide, the updated recommendation requires national regulatory authorities to review only two markets at a national level:
- Market 1: Wholesale local access provided at a fixed location
- Market 2: Wholesale dedicated capacity
UK’s (post-Brexit) approach
Our earlier post described the UK’s general approach to implementation of the European Electronic Communications Code in light of Brexit. The UK has decided not to implement the Europe-wide voice termination caps described above. The wholesale voice markets consultation started by Ofcom on 13 August 2020 sets out the proposed approach in the UK to voice termination. In summary, Ofcom’s current proposals for regulating wholesale call termination markets in the UK are:
- To deregulate the wholesale market for landline call origination
- To continue to set mobile and landline termination caps: for mobile call termination in 2021-22 between 0.257 and 0.485 pence per minute and for landline termination 0.0292 pence per minute
- For calls originated from abroad, to require UK providers to charge no more than the equivalent rates charged by their international counterparties where those are higher than the UK regulated cap.
- To require BT to interconnect on fair, reasonable and non-discriminatory terms, including on prices, but not to set more specific charge controls on BT for IP interconnection
- To require BT to offer interconnection with its IP network for all landline calls at the regulated landline termination rate from April 2025 onwards
- To continue to impose mobile termination rates on calls to 070 numbers
- To remove the charge control for conveyance of calls to ported mobile numbers
Other commentators (thank you Mike Conradi!), have already flagged the cross-over between trade policy and voice termination implicit in both the UK and European proposals to only allow international calls originating from jurisdictions with equivalent approaches to call termination to take advantage of their respective termination caps. Whilst it is impossible to predict how this will play out, it is a perfectly plausible scenario that, once the current emotional heat and fury from Brexit has dissipated, the UK would rationally choose to adopt the EU fixed and mobile voice termination caps in the UK to enable the EU to recognise the UK as having equivalent voice termination regulation, which in turn would allow UK based operators to be able to terminate calls in the EU for the EU regulated voice termination rates.
So far as the ex-ante market recommendation is concerned, in June 2019 Ofcom published its statement on the Physical Infrastructure Market Review, the Business Connectivity Market Review and the Leased Lines Charge Control. The remedies imposed following these reviews run until April 2021, with that date being in large part set to enable Ofcom to complete its ongoing overarching review of the regulation of UK’s wholesale fixed telecoms market 2021-2016 – a topic for future blog posts.