A new EECC coming into play: Key points for electronic communications service providers

openlaptop

Telecommunications Alert

Technology Sector Alert

By:

The new European Electronic Communications Code (EECC) is set to take effect in European Union member states by December 21, 2020.  The new code is expected to harmonize the existing legal framework for electronic communications across the EU.

Of particular interest, the EECC broadly expands the definition of Electronic Communications Service (ECS).  As a result, many over-the-top (OTT) providers that did not previously fall within the definition of ECS may be brought within the sweep of the EECC, along with various other telecommunications services. For the first time, these Internet-based services may need to register their offerings in many of the EU countries in which they operate.

Among these newly regulated services are email, connected wearable devices, and an array of other OTT applications, such as audio, video, and other streaming media content delivered over the Internet.

This regulatory change means that OTT service providers will need to understand how their applications fit into the new code and how to comply with the associated regulatory obligations throughout the EU.

Background: new framework sweeps all services into one regime

In December 2018, the EECC was finalized by lawmakers and published in the official journal of the EU, providing member states two years to adapt their existing telecommunications regulations in accordance with the framework. The EECC introduces an expansive new definition of ECS, which includes three sub-categories of services: (a) Internet access services; (b) conveyance of signals; and (c) interpersonal communications.  Interpersonal communications are further subdivided into number-based and number-independent services, depending on whether the service "connects with" and/or "enables communications with" publicly assigned numbering resources.

This new framework effectively sweeps all traditional telephony, short message service (SMS), multimedia messaging service (MMS), transmission services, machine-to-machine communications, broadcasting, voice over Internet Protocol (VoIP), and over-the-top (OTT) services into the ECS regime.  Those services may be subject to data processing, notification, and other requirements under the EECC.

Evolving scope of the EECC

The European Court of Justice (ECJ) has provided several helpful analyses of ECS classification under the existing Framework Directive that point the way to possible future interpretations under the EECC.  In interpreting the Framework Directive, the ECJ in its SkypeOut decision (C 142/18) determined that the interconnected VoIP service met the definition of ECS primarily because it has the ability to connect with standard telephone numbers and involves the "conveyance of signals" by Skype as part of the offering. In contrast, in its Gmail decision (C 193/18), the ECJ found that Gmail is not an ECS because the service does not provide for the "conveyance of signals"; rather, users bring their own connectivity.

The expanded scope of the EECC covers Internet-based services that did not previously fall within the definition of ECS under EU law.  In particular, the definition of ECS now includes Internet-based services that do not connect with publicly assigned numbering resources.  As noted above, the EECC calls these services "number-independent interpersonal communications services" as opposed to "number-based interpersonal communications services."  Therefore, under the revised definition contained in the EECC, Gmail (and similar services) would likely meet the definition of an ECS within the "number-independent interpersonal communications" classification. 

Number-based OTT applications and services pose additional challenges.  As the name implies, number-based interpersonal communications interact with the public telephone network.  SkypeOut would be a classic service type number-based OTT application, as would messaging services that engage with standard telephone numbers. 

While the EECC is meant to harmonize matters across the EU, individual member states will continue to have authority over the use of telephone numbers, including who can access telephone numbers for what purposes.  And for OTT applications, the means by which a provider may further assign telephone numbers to its customers (and potentially its customer’s customers) will likely present challenges in the immediate term, particularly in EU member states that highly regulate telephone number access and use.

Future application to OTT services

Internet-based services, including OTT services, will need to understand and comply with these new rules throughout the EU.  Depending on how each member state adopts the framework, any entity providing an ECS service may need to register as an ECS provider in relevant EU nations.  Under the EECC, the "notification" process is designed to be straightforward and result in a "general authorization" upon filing.  Companies need only register with the relevant regulatory entity in each EU member state in which they are providing one or more ECS offerings.  Accordingly, OTT operators should consider engaging in an assessment of whether their OTT services fall within the definition of ECS and adapt their practices accordingly as the December 2020 deadline approaches.

Learn more

For more information on next-generation OTT regulation and how to protect your OTT business and mitigate risks with using numbers, please contact either of the authors, and please register here to join us for a webinar conversation with Access Partnership on October 1, 2020.