ETNO welcomes this consultation on the universal service regime, as established by Chapter II of the ‘Universal Service Directive’ (“the Directive”), a vestige of the early days of liberalisation of the sector that we believe requires radical reform.
ETNO believes that investment, innovation and rapid technological progress in the telecommunications sector deliver unrivalled choice, quality and value for money for the consumer of electronic communications services almost everywhere in the European Union (EU). For example, for basic telephony service, there is a strong trend of substitution of fixed by mobile voice communications, which have very wide coverage and affordability. Another example is the development of the commercial directories market. Against this background, the necessity for the continuation of a universal service obligation (USO) should be critically assessed.
We thus call upon the Commission to conduct a thorough, systematic review of the universal service regime in Chapter II of the Directive on par with the review of the directives of the regulatory framework for electronic communications networks and services (“the Framework”) completed in 2009 (“the Telecoms Review”).
This ‘root-and-branch’ review of Chapter II should be based on a quantitative analysis of the costs and benefits of the existing scope of the USO and any possible expansion thereof. This should include a rigorous, quantitative impact assessment of all policy options, including removing the provision of universal service completely.
In most member states, the USO is funded by an indirect tax on the customers and shareholders of the universal service provider (USP), a single industry player. Any industry funding mechanism simply shares the tax across the larger sector. Given that the USO is intended to benefit society and the general economy, ETNO calls for a stronger or exclusive role of public funds for its financing.
Without prejudice to the view that the provision of universal service could be withdrawn completely, ETNO believes that radical revision of the Directive is required to improve the regime’s financing mechanism and make it ‘fit for purpose’ for effective and efficient delivery of any USO.
We do not believe that the universal service regime should play a role in meeting the “broadband for all” objective which is a widely-stated public policy objective at both national and European levels. Where broadband coverage cannot be achieved on a commercial basis, EU and national policy instruments and public financing, as listed in Annex 3 of the consultation document, should be utilised.