Current legislation still doesn't fit the bill - Government Activity

CommunicationsWeek International, April 16, 2001 by Michelle Donegan

Operators advocate the speedy adoption of a standard billing system in the EU, but member state compliance still could be a while coming.

Europe's patchwork of tax, invoicing and data protection laws is hindering the adoption of electronic billing presentment and payment (EBPP), according to the Global Billing Association (GBA) and industry experts, preventing operators from reaping the cost savings that electronic billing systems are intended to offer.

"Although [e-billing] will be of interest to [only] 5% to 10% of users at this time, the cost savings on that 5% to 10% are enormous; but the savings would be a lot larger if the same systems could be used in each country," said Caroline Bloomer, principal at billing systems planning and consultancy company Best consulting Services Ltd., of Abbots Langley, England. "Operators want...to bill [and manage customer care] from a central site."

The GBA, based in Edinburgh, Scotland, plans to step up its lobbying efforts at the European commission, with national telecoms regulators, value-added tax (VAT) authorities and data protection organizations to increase the awareness of how inconsistencies in VAT and invoicing laws are affecting telecoms operators.

"This is a hurdle to full competition," said Alex Leslie, executive director of the GBA. "While regulations are designed at a European level, the law is enacted at the national level. So when a company is looking to go into a new country, it presents a lot of work for lawyers."

The EU legislative process has just gotten underway to address these issues. The European commission has proposed two draft directives: one on invoicing that would include consistent rules for electronic and paper-based invoices, and the other on a harmonized approach to VAT in Europe.

At best, adoption is a year away

The commission would like to see these directives accepted by governments by the end of the year, but some are skeptical about how soon the laws could have any impact.

Ine Lejeune, a Brussels-based partner at Pricewaterhouse Coopers, leading the e-business strategy for tax and legal services, and spokeswoman for the European e-business Tax Group (EeTG), said that the EeTG is in favor of the directives and is reassured by the momentum at the commission. But she added that the business community would like to see more efforts being made. "Even [if legislation is] adopted by the end of the year, it still will take 12 to 18 months to be adopted into national legislations," she said. "This is why there is concern if there should be a delay, when you think about the cost savings at stake."

For Lejeune and the EeTG, this isn't just about e-billing or e-commerce. "We're not just talking about e-business. We're talking about being able to stimulate growth and adoption of digital supply chains. Right now, it's not possible to have a completely digital supply chain across the 15 member states in Europe," she said.

Some old practices unavoidable

The biggest barrier to electronic billing is legislation that gives e-bills binding status, according to Jorry Janssen, director of projects and technology at the electronic and telecommunications information services (ETIS) group, based in Brussels, which develops guidelines and standard approaches for e-billing. "The legal status of an electronic bill does not have the same status as a paper bill," said Janssen. "Even if the customer uses e-billing, a paper bill still needs to be sent [for legal reasons]."

Deutsche Telekom, Belgacom and Telecom Italia are using ETIS's electronic billing implementation guidelines, but they all send paper invoices to their customers as well.

As more service providers internationalize their operations and begin to adopt EBPP systems, the legal inconsistencies across Europe are a growing problem.

However, some believe that dealing with multiple tax regimes is simply a part of conducting international business. "People with billing systems have always had to deal with different regulatory and legal frameworks in each market," said Danny Dicks, senior analyst at Analysys Ltd., of Cambridge, England. "But perhaps it's a bigger issue if there is more consolidation across national boundaries."