EC mulls equal regulation for OTT companies and network operators

Over the Top (OTT) service providers could face similar regulation to network operators under European Commission (EC) plans to update communications market rules in 2016.

Sharon White, Ofcom's new CEO

Ofcom CEO Sharon White

A draft document relating to EC goals of creating a single digital market for the region reveals that the Commission is considering beefing up telecoms regulations with rules covering OTT players and cable operators, Reuters reported.

The EC is focusing on OTT applications and services that mimic traditional telecom services, such as Skype (voice over IP) and WhatsApp (messaging), Reuters noted.

Levelling out the regulatory playing field would be an attempt to address network operators' concerns over the impact of OTT services on their earnings. Any drop in operator income could impact the rollout of new infrastructure necessary to achieving the EC's goal of a single digital market for Europe--something the Commission acknowledged in a separate document related to its draft telecoms rules, Reuters stated.

In that second document, the EC noted that operators seem to have little incentive to build new networks to replace existing copper infrastructure, Reuters reported.

Juniper Research reported in October that network operators lost $14 billion (€13 billion) in revenue to OTT players such as WhatsApp, Facebook and Skype in 2014. However, the research company noted that operators stand to gain at least $66 billion in revenues over the next five years in new revenue streams opened up by OTT services.

News of the EC review came as the new CEO of UK regulator Ofcom said she is considering a lighter touch to future regulation, to account for competition from Facebook, YouTube and other Web services.

Sharon White told the Financial Times that the Internet is set to be one of her biggest concerns during a regular 10-year review of UK media regulations, and that the regulator may take a more consumer-centric approach to future rules.

The CEOs of TalkTalk and BSkyB last month called on Ofcom to use the review to split up BT, amid concerns the former incumbent is set to hold a dominant position if a £12.5 billion (€17.3 billion/$18.6 billion) acquisition of mobile operator EE goes ahead unhindered by competition regulators.

Research company Macquarie estimated that BT would hold a 33 per cent share of the UK's consumer telecoms market if the EE acquisition is cleared, and a 70 per cent share of the UK wholesale market.

For more:
- see this Reuters report
- view this Financial Times article (reg. required)

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Ofcom must break up BT as part of review, rivals say
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Juniper Research: Operators to lose $14B in revenue to OTTs this year

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