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The European Union’s new digital economy commissioner, Günther Oettinger, has already made the dubious claim that big telecoms providers need to make more money following his predecessor’s focus on improving things for consumers. Now we know one way he intends to make this happen.
Oettinger said in a Thursday interview with Stuttgarter Zeitung that he wants to make it harder for people to switch ISP, so as to encourage ISPs to invest more in network-building. He said this would require discussion with regulators (no kidding) but “we need to increase the profitability of such investments by prohibiting changing suppliers for a certain time.”
“I’m not talking about monopolies forever, but for several years, in which one has planning security as an investor,” he said, adding that similar rules apply in the energy industry (Oettinger was until last week the EU energy commissioner.)
Oettinger’s department has confirmed to me that the quote is contextually as it appears. However, it completely flies in the face of what the European Commission was trying to achieve under his predecessor, Neelie Kroes.
Kroes worked hard to “put people back in the driving seat” when it comes to switching ISP. In fact, the telecoms legislative package she came up with — already passed by the European Parliament and now awaiting final approval by member states – gives consumers the right to terminate their communications contracts on one month’s notice, as long as they’re already six months into the contract and are happy to buy out their subsidized equipment and other promotional perks.
The package also lets customers quit their contracts at no cost, if the provider changes their contractual conditions in any way that isn’t “exclusively to the benefit of the end user,” and limits minimum contract terms to two years at most (providers will also have to offer one-year contracts.)
Getting rid of these protections arguably removes the incentive for ISPs to invest in network upgrades, because locked-in customers can’t leave when their service gets worse. That makes Oettinger’s latest idea the most worrying EU tech policy proposal I’ve heard in, ooh, days – the last eyebrow-raiser being Oettinger’s apparent desire to extend Germany’s useless “Google tax” law across the union.
I wonder what Oettinger’s superior, the relatively savvy digital single market commissioner Andrus Ansip, will make of these proposals.
This article was updated on November 9 to note Oettinger’s department’s confirmation of the quote’s context and the fact that Ansip will have the ultimate say over such proposals.