In September 2021, the EC published a legislative proposal for a Decision of the European Parliament and of the Council establishing the 2030 Policy Programme ‘Path to the Digital Decade’. The proposal sets ambitious targets to be met by Member States by 2030 on the following four key pillars: a digitally skilled population and highly skilled digital professionals; secure and sustainable digital infrastructures (target is to have all European households connected to gigabit speeds and all populated areas covered by 5G); digital transformation of businesses; and digitisation of public services. The European Parliament and Council will need to endorse the targets through the regular EU legislative procedure. Furthermore, in February 2022 the EC proposed European digital rights and principles, covering issues including inclusion, freedom of choice online, online safety and security, and sustainable digitisation.
Addressing the challenges posed by the COVID-19 pandemic, the Next Generation EU package is the Union’s means to support the recovery processes in EU Member States. The bulk of the proposed recovery measures are funded by a new temporary recovery instrument, the EU Recovery and Resilience Facility (‘RRF’), worth nearly €750 billion, which was adopted in December 2020. A significant amount is allocated towards digital and green initiatives, with a minimum threshold of 20% of the RRF to be allocated to digital and 37% to green initiatives. As of 31 March 2022, the EC had approved the national plans under the RRF for 24 EU Member States, of which Czech Republic, Germany, Greece, Ireland, Italy, Portugal, Romania and Spain are within Vodafone’s footprint.
In March 2022, the European Body of Regulators (‘BEREC’) published a draft update to the BEREC Guidelines on Net Neutrality, in response to the recent CJEU rulings on zero-rating practices. BEREC interprets the rulings to prohibit all price-differentiation practices that are not application agnostic. This would include Vodafone Pass tariff, which is currently offered in eight EU markets. Stakeholders had until 14 April 2022 to provide feedback, and BEREC intends to publish the final Guidelines in June 2022.
In October 2021, the national regulatory authority (‘BNetzA’) published its draft regulation regarding the wholesale access markets (so-called Market 3a). In the draft, BNetzA proposes no significant changes in relation to the regulation of the copper network access but has suggested a light touch regulation of fibre access (‘FTTH’).
For the first time in Germany, an access regime based on full equivalence of input (‘EoI’) is intended to enforce the equal treatment of wholesale demand and Deutsche Telekom’s (‘DT’) retail arm. In addition, BNetzA proposes improved access to DT’s passive infrastructure (ducts, masts) with significant market power (‘SMP’) obligations to open DT’s passive network, including regulated prices for the first time. This would ensure Vodafone Germany’s wholesale-based very high-speed digital subscriber line (‘VDSL’) business in the future, improve cost effective build out of Vodafone Germany’s own networks using ducts, and eliminate the risk of complete deregulation of DT’s fibre networks. The final regulation for the wholesale access markets is expected by the end of the second quarter of 2022.
Licences for frequency allocations at 800MHz, parts of 1800MHz, and 2600MHz will expire at the end of 2025. Vodafone Germany currently holds allocations at 800MHz and 2600MHz. BNetzA is therefore assessing its options on how to proceed on the reallocation of this spectrum. It may either re-auction the spectrum, or prolong the existing licences, or a combination of these. BNetzA is currently consulting with stakeholders on approach and is expected to make a final decision on next steps by the end of 2023 at the latest.
In response to a preliminary reference from the National Court in Germany, on 2 September 2021, the CJEU issued three judgments related to zero-rated commercial offers of Vodafone Germany and DT. The judgements concluded that the specific zero-rated offers that were the subject of the judgments, and which included an exclusion of roaming or tethering, or a limitation on the bandwidth for certain categories of application respectively, were not compliant with the Open Internet Regulation (‘OIR’). On 27 April 2022, BNetzA consequently issued an order, announcing that Vodafone Pass is not compliant with OIR, and that Vodafone Germany must, firstly, stop marketing Pass from 1 July 2022 and must migrate existing Pass customers to alternative tariffs by 31 March 2023.
The IT Security Draft Law (‘IT SiG 2.0’), which lays down rules for using vendors of critical components in critical infrastructure, was adopted in May 2021. IT SiG 2.0 envisages two pillars to ensure network security based on, firstly, mandatory certification of critical components and, secondly, establishing the trustworthiness of the vendors of such critical components following clearly defined criteria and processes. To the extent these are not met, there will be the possibility of removing components from untrustworthy vendors. Components are deemed critical when they are used for ‘critical functions’, which are defined by BNetzA in agreement with the Federal Office for Information Security (‘BSI’).