EU Looks to Regulate Cell Phone Roaming Charges

Source: EU backs mobile roaming fee cut - BBC.com

The EU has scrutinized roaming charges imposed by cell phone operators in Europe since 2000 but is now finally taking action. The European Commission proposed a reduction by as much as 70%. A committee vote in the European Parliament this week bolstered the proposal. The full Parliament will vote on the issue in the coming weeks, and the European Commission wants the reduction to go into effect by summer.

Cell phone companies justify the roaming charges as a recovery of the costs of routing calls through rival networks. European officials counter that the companies make an annual profit of $11 billion from roaming charges and cite examples where companies charge sixty times more per-minute for a cross-boarder roaming call than for a domestic call. Lobbyists for the cell phone companies insist that the legislation is unnecessary because of a competition-driven decrease in roaming charges, and they warn that price caps will cause the companies to lose money in some areas.

Questions:

Should roaming charges be left to market forces rather than government regulation? If regulation is desirable, are there alternatives to price caps that would be less intrusive?