The EU is the cause of the roaming charges, not the white knight removing them

Niklas Agevik
Jul 2, 2017 · 5 min read

With EU putting pressure on the mobile operators to remove roaming fees, I have seen a number of people thanking the EU for its work and using it as a sign of the importance of the EU. Instead of endlessly debating this on Twitter and Facebook I thought I’d write this to capture my thoughts in more than 160 chars.

Why do we have roaming charges? Because the different nation states of Europe have taken it upon themselves to say they own the radio waves (spectrum) and by the grace of their good will they have handed it down to companies under licenses that dictate how the different parts of the radio spectrum can be used. I never remember giving away the spectrum to the nation states in the first place, but hey, let’s ignore that for now.

Since the nation states are run by bureaucrats with limited time they decided to hand the spectrum to 3–4 different companies in each region which are permitted to use the spectrum only if they use it to build a 4G network. In some countries, it has been given to whoever can pay the most, in other its been given out in “beauty contests” where each mobile operator submits a proposal for how it will build the network and a panel of government bureaucrats decide which proposal is best (never involving any form of bribe, I’m sure).

This has happened a few times recently, first with GSM, then with 3G and eventually with 4G.

Not a Problem In the First Place

After receiving a license, each mobile operator has been free to sign whatever agreements they want to build their network and maximize the end user value, including agreements with other operators which created the market for roaming. A lucrative market, it turned out.

Now — the first thing I’ll say here is that this situation is not a problem in itself. If we are allowing mobile operators to exist, it’s up to them how they operate their business. If they manage to have low prices in their home country by having high prices for rich business(wo)men flying around Europe— I personally don’t mind.

If there had been consumer pressure for an EU-wide subscription for people who travel around in Europe, I’m pretty sure such an offer would existe. Actually, this did appear a few times with the multi-national telecom companies such as Vodafone and Telenor opening up a subscription that worked in multiple countries at a bit higher monthly subscription fee. The only problem is no-one wanted that. Most people spend all their time in their home country and couldn’t care less for cheap data that one weekend they travel to Germany.

Where we ended up now, because of the EU, is raised subscription costs in operators home markets (which already happened here in Sweden) since the frequent travelers are no longer subsidizing it.

The root of the problem

But the root of the problem is still that we allow the nation states to own the spectrum. There is no point in that. Why not just leave the spectrum free and allow companies to use it as they will, across borders? This could accurately reflect how people travel and live. Having one mobile operator that covered the south of Sweden and Denmark and another one that covered central and northern Sweden would have made much sense than the arbitrary borders put up by nation states.

People will be quick to point out problems with this since spectrum is a limited resource and needs to be managed somehow. But the only reason they see problems, is because they never spent time thinking about alternate ways of achieving the same goal. None of these problems are unsolvable, actually most of them are trivial. If we had allowed entrepreneurs to operate freely, we would have had numerous ingenuous solutions instead of the one sub-optimal solution dictated by the nation state.

How it could have worked

I can see multiple ways how the spectrum issue could have been handled, but let me paint just one picture for you to give you an idea of how things could have turned out.

Imagine — an alternate version of 1995, the bureaucrats in charge of the ITU (the UN organ dishing out spectrum) said “Hey, maybe we are actually NOT the most qualified persons to make important decisions around radio spectrum (editor’s note: damn right you aren’t!), let’s instead let people choose for themselves how the spectrum can be used”. (Let’s all take a second here, take a deep breath, close our eyes and enjoy thinking about a world where governments actually thought like this).

Spectrum would be free for all. Hundreds of small scale mobile operators would pop up. Since multiple companies would build their own networks there would be fighting over frequencies with sometimes many companies broadcasting at the same frequency, creating noise in the radio waves. This would be bad for all companies and eventually they’d have to find a way to share radio spectrum, or new inventions would be made that let companies easily share spectrum (there’s lots of research going on in this area, see Google’s Spectrum Database for example).

The hundreds of operators, ranging from maybe a non-profit covering one small village in the countryside, another focusing on covering highways and roads and a third focused on indoor coverage in cities. Eventually, an aggregator would appear that signed an agreement with the hundreds of different types of telecom companies with different coverage around Europe. Maybe one would focus on a subscription for people living in the west of Sweden but working in Norway. Another would focus on a super low subscription price for city dwellers who don’t own a car and spend most of their time in the city.

In Conclusion

I hope this gives you some perspective on the roaming laws. The current way of doing affairs is nothing given by god. It’s a by-product of the EU and the nation states taking something that belongs to us, the people, and trying to enforce a way to use it. That it took 20 years for the EU to fix a problem that was never a problem to begin with is nothing to be celebrated, but something that should be mourned.

Niklas Agevik

Written by

Runs startups, long distances. PM & CEO at @Instabridge.

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