“O truant Muse, what shall be thy amends”*: Reding’s Roaming Regulation, amended
Posted on September 24, 2008 | Filed Under communication technologies
Yesterday, Commissioner Reding presented the key points of the Commission’s proposal to amend the Roaming Regulation; it took until today to also get a text of the proposal on the website, and it still is a “version provisoire”. But anyway, here are the links to the proposal, the accompanying staff working paper and the Communication on the outcome of the review of the functioning of the Roaming Regulation (all provisional versions).
As the explanatory memorandum says, the regulatory actions chosen are simple (”Due to the nature and the simplicity of the regulatory actions chosen in the proposal … the administrative and financial burden on the Community, national governments and authorities will be minimised.”):
- price limit (retail) for “Euro-SMS” 11 cents (4 cents wholesale for SMS-termination),
- wholesale price cap for data roaming: 1 € / MB, no price limit for retail
- automatic message for customers when they are roaming, including personalised tariff information, from 1 July 2010 additionally a “cut- off limit” (where customers can determine a “maximum financial limit” they are prepared to spend on roaming)
- the voice roaming regulation will be prolonged, with further reductions of retail and wholesale limits (retail active 0.40 € per 1 July 2010, 0.37 € per 1 July 2011, 0.34 € per 1 July 2012; retail passive 0.16€ / 0.13 € / 0.10 €; wholesale 0.23 € / 0.20 € / 0.17 €). For active calls, per-second billing will be mandatory after 30 seconds, for passive calls per-second billing is required right from the first second of the call.
The Commission backs up its proposal with a detailed staff working paper, coming up with a nice exercise in economic fortunetelling by analysing the welfare impact of the regulatory options. To sum it up: not much is known, and most of the rest is either assumed or disregarded (or “a first approximation of the virtually unknown”, here: concerning the characteristics of the functional form of the demand functions for international roaming, an example of the demand function for SMS-roaming is shown above). But still, miraculously, it all sums up nicely and the regulatory options chosen are exactly those that maximize overall welfare.
*) Shakespeare, Sonnet 101.
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