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IP/09/164

Brussels, 29 January 2009

Telecoms: Portugal referred to the European Court of Justice over selection of companies providing universal service

The European Commission has referred Portugal to the European Court of Justice for failure to designate the companies responsible for providing basic telecoms services through an open selection procedure from which no company is excluded beforehand – as required under the EU telecoms rules. Services such as the provision of a connection to a telephone network and public payphones are considered by EU law to be a safety net for achieving social inclusion. Under EU telecoms rules, all interested companies should have a chance to be designated for the provision of those basic telecoms services in order to ensure fair competition. The Commission launched an infringement procedure against Portugal in 2005 (IP/05/430, IP/08/142). In 2007, Portugal responded with a timetable for the launch of a tender to designate its universal service providers, but this has not been respected. The Commission today moved the procedure to the Court of Justice.

"We have given the Portuguese authorities enough time to ensure that the universal service providers in Portugal are designated in an efficient, objective and non-discriminatory way – as required by our telecoms rules,” said Viviane Reding, the EU Telecoms Commissioner. ”The promises made by Portugal to comply with EU rules have not materialised, so we have no option but to refer the case to the Court. Consumers and businesses in Portugal need fair opportunities and legal certainty about their basic telecoms services.”

In 2005, the Commission launched a case against Portugal because telecoms operators were not able to compete with the incumbent to offer universal telephone services since Portugal Telecom was given a 30 year concession until 2025, just before the deadline for putting in place new EU rules in that area.

The EU telecoms rules (specifically the Universal Service Directive) stipulate that Member States should use an efficient, objective, transparent and non-discriminatory designation mechanism when they select operators to provide basic telecoms services. Although Portuguese law includes plans for such a selection process, this would only take place once the current incumbent's concession expires in 2025. This has the effect of excluding alterative operators from competing with Portugal Telecom for the provision of universal service for the next 16 years and is not compatible with EU telecoms rules.

Background:

This infringement case started in 2005 (see IP/05/430). In 2007, the Portuguese authorities informed the Commission that the tender on the new universal service designation process would be published in 2008. This has not taken place and therefore the Commission has no option but to refer the case to the European Court of Justice.

A detailed overview of telecoms infringement proceedings is available at:

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


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