A new bill aims for a modernisation of telecommunications legislation through the promotion of investment incentives, harmonised administration and higher protection of consumers as well as the deployment of fibre and 5G networks. This to ensure better competitive terms on the telecommunications market and increase the establishment of new and modern telecommunications infrastructures.
Recently, the Danish Ministry of Climate, Energy and Utilities put a new bill in the telecommunications area out to consultation. The bill was drafted on the basis of the telecommunications compromise reached in May 2018 and implements parts of the European Electronic Communications Code, "EECC", the aim of which is to promote the EU's vision of a European "gigabit society" in 2025.
The overall aim of the new bill is to promote investment incentives and the deployment of high-speed broadband all over Denmark and to ensure that Denmark is at the forefront of the development of a 5G network.
Main points of the new bill
The bill includes four main points:
- Stimulating incentives to invest in digital infrastructure with a view to deploying modern telecommunications networks and services all over Denmark.
- More harmonised administration of radio frequencies and more predictability regarding the awarding of licenses
- More consumer protection, ensuring transparency and underpinning consumers' freedom to choose
- Promoting the roll-out of new digital infrastructure with particular view to deploying, for instance, the 5G network.
Stimulating investment incentives
The bill aims to make it easier for players in the industry, including owners of telecommunications networks and service providers, to plan and make long-term investments. This is done through a number of proposals that increase predictability and promote transparent procedures, particularly in relation to regulation of competition.
As part of the aim to increase the incentive to make new and more investments in the establishment of new infrastructure, focus has been aimed on a higher degree of regulatory predictability, based on the EECC. For this reason the bill includes a minimum period of 20 years for licenses to use radio frequencies that have been harmonised at EU level to wireless broadband. This mainly means the radio frequencies for mobile communications services awarded on the basis of frequency auctions.
Higher consumer protection
Transparency and underpinning of consumers' freedom to choose are to increase consumer protection in the telecommunications area, for instance through focusing on consumer information and the implementation of the request that a summary of agreements be prepared and handed out on conclusion of new agreements. The summary of agreements will make it easier for consumers to comprehend the agreement and compare supply options across providers and services. Further, the scope of various consumer rules is widened to include internet-based communication services that do not use telephone numbers to direct communications, i.e. mainly message services based on apps or the internet.
Promotion of the roll-out of new digital infrastructure
The new bill implements access for providers of electronic communications networks or services to establish – on reasonable request – wireless access points with limited range through public authorities and private or legal persons that control existing physical infrastructure or street furniture. This simplifies the establishment of new infrastructure to e.g. 5G networks that will have an impact on coverage and capacity challenges on numerous concurrent users.
Increased use of data during COVID-19 crisis
The new bill places particular focus on the spreading of fibre network and the coming 5G mobile network that will ensure network coverage all over the country.
The need to deploy high-speed broadband was particularly illustrated during the government's lock-down period in connection with COVID-19, where many Danes have been forced to work from home. Specifically, internet traffic increased by 40%-50% during the COVID-19 crisis.
However, the fibre network is built for much larger amounts of data and thus suited to handle the increased data consumption that is to be expected in the future.
New figures by the Danish Energy Agency show that the fibre network is one of the most popular digital infrastructures among Danes, as the increase in fibre network subscribers has set a Danish record for the third year running with 87,000 new subscribers in just one year.
Comments by Bech-Bruun
The new bill and new regulation at EU level, focusing on investment opportunities and high-speed broadband all over the EU, illustrate the impact that the telecommunications area has on the industry as well as on private persons, since improved possible coverage increases the incentive for establishment in parts of the country with less population density.
Consequently, Bech-Bruun expects continued high focus on investments and development in the telecommunications sector, creating new possibilities for growth and competition in the industry.
Of particular importance is also the extension of the scope of the so-called "number-independent interpersonal communications services", i.e. all kinds of e-mail, message services and group chats.
Traditionally, such services were seen as information and contents services, while only traditional communications services based on fixed-line and mobile telephony was considered communications services under the telecommunications legislation. Going forward, the demarcation of which service providers to be regulated by the telecommunications act will not be based on purely technical parameters but rather build on a functional approach, considering that today many end-users instead of traditional telephone services use corresponding electronic internet-based services such as internet telephony, (app-based) message services and web-based e-mail services.
This change primarily impacts the consumer rules in the telecommunications legislation, as going forward these new types of services will also need to comply with, particularly, the rules on consumer information that follow from the telecommunications legislation.
The consultation period for the new bill expires on 26 June 2020. Bech-Bruun will follow developments closely and issue updates, and we will provide specific advice on the impact.