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IP/08/1526

Brussels, 16 October 2008

Telecoms Rules: Commission closes Universal Service Infringement Case against France

In today’s round of telecoms infringement proceedings, the European Commission closed the case against France over the designation of universal service providers, following changes to French rules. EU rules under the Universal Service Directive provide a safety net guaranteeing a minimum level of services such as connection to a telephone network and basic internet access that fill societal needs not delivered by the market. The Commission launched a case against France in 2005 because its procedure for designating providers of the universal service was only open to operators offering nationwide services. EU rules say that the process should not discriminate against any operator interested in providing the service only in parts of a country. France amended its rules after the European Court of Justice ruled in favour of the Commission in June 2008. These amendments will ensure that no telecoms provider interested in providing the universal service in parts of the country will be excluded from a designation process in advance.

"Compliance with the EU’s rules on universal service is a key element of properly functioning telecoms rules,” said Viviane Reding, the EU Telecoms Commissioner. "The EU rules guarantee basic services for consumers such as connection and telephone services from a fixed location, public payphones, directory services and, where appropriate, measures for disabled users with minimum levels of availability and affordability. At the same time, the EU rules also require Member States to make sure that universal service provisions do not discriminate in favour of incumbent operators. I am therefore pleased that France is now in compliance with the EU rules."

To meet universal service obligations ensuring a basic provision of key services such as access to voice telephony, directory services or public phone booths, Member States may designate one or more companies to provide the universal service cost efficiently. EU rules, specifically the Universal Service Directive, state that all interested service providers should have a chance to be designated.

The Commission opened an infringement case against France in 2005 because at the time French rules excluded operators unable to provide the service nationwide from the designation mechanism (IP/06/1798, IP/06/464). The Commission considered that this system did not respect the non-discrimination principle, as it predetermined the result of the universal service designation through legislation and impeded an assessment of alternative options, including new entrants which could have been more efficient and closer to commercial costs and conditions.

On 19 June 2008, the European Court of Justice confirmed that any designation mechanism has to follow the principle of non-discrimination and that therefore no provider can be excluded in advance. It also ruled that the French rules violated the Universal Service Directive financing principles of cost-efficiency and minimum market distortion, by preventing effective competition on the market and limiting the choice of national authorities.

Background:

Under the EU’s Universal Service Directive of 2002, universal service means that citizens must be able to connect to the public phone network at a fixed location and access public phone services for voice and data communications with functional access to the Internet. The Directive also requires that consumers have access to directory enquiry services and directories, public payphones and special measures if they are disabled. The Commission reviews the scope of the Universal Service Directive every 3 years, and published the most recent report last month (IP/08/1397, MEMO/08/583).

For the other infringement proceeding under the EU telecoms rules in this round see IP/08/1529. A detailed overview of telecoms infringement proceedings is available at:

http://ec.europa.eu/information_society/policy/ecomm/implementation_enforcement/infringement/


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