The EU Proposal to End Roaming Charges - Pros, Cons and Concerns

The European Union Planning Commission is seeking to streamline its telecommunication industry and standardize the cost of making phone calls across the EU through Regulation (EU) No 531/2012.

The European Union rules ended roaming charges on incoming calls in July 2014. By 2016, all roaming charges will be abolished. However, the plan faces a number of hurdles before it could become law. It must be passed by all 28 EU members as well as the EU Parliament.

Consumers would pay the same rate for text messages, phone calls and internet connections within countries as they would when traveling to other EU member states. British on holiday in France would pay the same rate to call London as Paris. One of the promised benefits of the deal is that holiday travelers wouldn't be hit with sky high bills for calling home.

The EU Planning Commission says standardization of the telecommunication market would improve the EU gross domestic product by $146 billion dollars, 110 billion Euros. Employers like call centers would no longer have a reason to relocate facilities to the cheapest market, while a lower cost for international calls within the EU may facilitate business. Consumers may see lower prices as new wireless providers come online; new firms will only need one authorization to operate from the EU instead of seeking permission in 28 separate countries.

Consumers would gain the right to break contracts if they don't see the internet speeds promised by their contracts. Contracts would also be limited to 12 month terms. In contrast, contracts today can last two or three years.

Telecommunication companies like Vodafone and Telefonica said this proposal, if it becomes law, will cost them over seven billion Euros a year when consumers will pay the same rate for calls made at home and abroad. Hutchison Whampoa Ltd. warns that the proposal will hurt small telecommunication companies who would have trouble competing with large firms that permit customers to use domestic minutes abroad. This could drive small service providers out of the market, eventually leading to higher prices.

Telecom companies challenge the law because it treats major telecommunication companies like Telecom Italia and Telefonica SA differently than next generation internet companies like Google, Amazon and Apple. For example, rising Internet content providers like Amazon instant videos and Apple iTunes are not regulated by this bill, though they make money on the infrastructure the telecommunication firms built. Telecom companies raise concerns that further cutting into their profits will hurt the EU in the long run, limiting their ability to raise revenue to revitalize Europe's broadband infrastructure.

Several EU members may refuse to ratify the law simply because it would give up control of national telecommunication policies to the EU. Conversely, the EU Parliament objects to the bill because it doesn't have stronger consumer protections. So there are concerns on both sides that could kill the bill, either because it takes away national rights or fails to protect consumers enough.

In July 2014, consumers were able to switch to mobile phone plans with the same rates across the EU, or consumers will be permitted by law to select roaming service providers that offer the low rates set by the EU Planning Commission.

While the end of roaming charges in the EU receives the most attention, the bill would also limit the price of calls between EU members to the price of long distance calls within that nation. The bill sets flat rates for text messaging and internet connections. Long distance land line phone calls would also become cheaper, with the price capped to the cost of a long distance domestic call.

One provision that has been mostly overlooked is the net neutrality rules in the bill. Telecommunication firms cannot block heavy data users or slow the flow of internet traffic. However, telecom providers could charge more for those watching television online as a premium service. La Quadrature du Net opposes this portion of the bill due to the fears that heavy data users could be charged far more than they are today because their service would be classified as a "premium" option.