Regulating Over-the-Top Services:
Towards a Level Playing Field?
One of the most controversial topics in the current regulatory debate regarding the telecommunications sector in the European Union is whether or not so-called Over-the-Top or "OTT services" should be regulated in the same manner as "traditional" electronic communications services.
Types of OTT services
At the EU level, the Body of European Regulators for Electronic Communications (BEREC) defined, in a recent report an OTT service as “content, a service or an application that is provided to the end user over the open Internet.” This broad definition means that virtually "anything provided over the open Internet" can constitute an OTT service, including e.g., voice over IP (VoIP) services, video streaming platforms, messenger platforms and services, e-commerce platforms, search engines, music streaming platforms, cloud services, and social networks.
BEREC further differentiated between three types of OTT services, namely (i) "OTT-0" which include OTT services that qualify as electronic communications services, (ii) "OTT-1" which are OTT services that do not qualify as electronic communications services (based on the current definition in the EU regulatory framework) but potentially compete with such services, and (ii) "OTT-2" which include all other OTT services.
Based on their characteristics and function, OTT-0 and OTT-1 services can be further classified as OTT communications services while OTT-2 services constitute OTT content services.
Status quo of regulatory debate
Both within certain EU Member States (e.g., Germany and France) and at the EU level, the regulatory treatment of OTT services with respect to the framework for electronic communications services is currently being discussed and re-evaluated.
Established telecoms providers (and in particular the operators of telecommunications networks) are strongly lobbying for a "level playing field" between providers of OTT communications services and providers of "traditional" telecoms services. They argue that existing regulation causes competitive disadvantages for telecoms providers who are subject to sector-specific regulation (in particular regarding customer protection, data protection, emergency calling obligations) while providers of OTT communications services (which are increasingly replacing "traditional" telecommunications services) are free from comparable "regulatory burdens".
There is disagreement however, whether a "level playing field" should be established by regulating providers of OTT communications services or by de-regulating providers of "classic" telecommunications services.
EU Commission's current plans
Currently, the EU Commission is conducting its periodic review of the EU regulatory framework for electronic communications which sets out the legal framework for telecoms regulation in all of the EU Member States.
From an internal briefing paper that has recently been leaked, it appears that the EU Commission does not intend to fully de-regulate the telecoms sector but rather aims to achieve a "level playing field and focused end-user protection […] by a targeted mix of deregulation and application of a limited set of sector-specific rules to OTT services […]".
The EU Commission intends to revise the definition of communications services to "cover any functionally substitutable services used for inter-personal communication, in other words services that enable direct interactive communications between two or a determined number of natural persons […] irrespective of the technology used for their provision". Based on this definition, the scope of OTT services subject to some degree of sector-specific telecoms regulation would be significantly wider than under the current framework. According to the briefing paper, in particular messenger services and webmail services would be covered, while, among other things, content or web-hosting would not fall under the definition.
As to the "limited set" of obligations possibly applicable to all providers of (newly defined) "communications services" (or certain types of such services) the internal briefing paper lists in particular the following areas: (i) confidentiality of communication, (ii) consumer protection, (iii) emergency services, (iv) number portability and interoperability of services, and (v) security.
A common understanding of what constitutes electronic communications services is an essential pre-condition for the adaption of existing regulatory regimes to the quickly changing technological environment. On the basis of a (new) common understanding and definition, electronic communications services with similar functionalities would be subject to broadly the same regulatory obligations. Those must be proportionate to the public interest objectives pursued (e. g., public safety) and the economic burdens imposed on providers.
Baker McKenzie, Frankfurt