New round of infringement proceedings in electronic communications: What are the issues?
European Commission - MEMO/06/487 13/12/2006
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Brussels, 13 December 2006
How often has the Commission already launched infringement proceedings against Member States under the 2002 regulatory framework for electronic communications?
In total, since the entry into force of the regulatory framework for electronic communications, the Commission has opened proceedings under Article 226 of the EC Treaty against all 25 EU Member States in some 90 cases due to failures to implement correctly the regulatory framework.
What are the issues at stake in the December 2006 round of infringement proceedings?
1. Independence of the National Regulatory Authority
It is a basic principle of EC law in general, and of the 2002 regulatory framework in particular, that Member States must make sure that an authority performing regulatory tasks is separate from and independent of any operator it regulates. In particular, Member States that own electronic communications operators must clearly separate the regulatory tasks from the state's ownership and/or control activities to guarantee the impartiality of the national regulatory authority's decisions and consequently to ensure a level playing field for all operators.
A letter of formal notice was sent to Slovakia in April 2005 for various discrepancies of the national law with the Framework Directive. The authorities amended the legislation. However, they failed to address the structural separation of the Ministry's regulatory function from the activities associated with ownership or control of the incumbent operator.
In Poland, following the adoption on 24 August 2006 of the law on state personnel, the President of the Council of Ministers has unlimited discretion to dismiss the head of the national regulatory authority. At the same time, a clear term of office (tenure) for the regulator together with the limited list of circumstances in which s/he could be dismissed was removed from the Polish telecommunications law. This undermines the effectiveness of structurally separating the regulatory function from ownership or control activities, considering that the Polish government controls significant shareholdings in a number of telecom companies.
It is the Commission's view that in such circumstances and given the need for effective structural separation, rules regarding length of service and grounds for dismissal of the regulatory authority are required to dismiss any reasonable doubts regarding the impartiality of the National Regulatory Authority without being influenced by external factors.
The Commission is sending a reasoned opinion to Slovakia. Poland will receive a letter of formal notice.
2. Caller location information to emergency authorities
Telecommunications operators are obliged to provide, upon receipt of emergency calls via both fixed and mobile phones, caller location information to emergency services, if this is technically feasible. This is to ensure that public safety answering points receive the most accurate information available about the caller's location. To guide the Member States in implementing this requirement, the Commission issued a Recommendatio[n]11 Commission Recommendation of the processing of caller location information in electronic communication networks for the purpose of location-enhanced emergency call services, C(2003)2657, 25 July 2003 in 2003. In March 2005 the Commission noted that as from then onwards, they would regard the provision of caller location as technically feasible, since it was available in the majority of Member States.
Following the publication of the 11th Implementation Report (see IP/06/188), 12 cases have been opened against Member States concerning the non-availability of caller location information to emergency authorities for calls made from fixed and/or mobile phones. These concern Belgium, Greece, Ireland, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, The Netherlands, Portugal, Slovakia. In the meantime, the cases against Ireland, Cyprus and Luxembourg have been closed, while reasoned opinions have been sent to Greece, Slovakia, Italy, Lithuania, The Netherlands and Portugal.
Following further investigations, the Commission is now sending a reasoned opinion to Latvia for the non-availability of caller-location information.
At the same time, an infringement proceeding is being launched against Poland since caller-location information is unavailable to emergency authorities for calls made from mobile phones.
Investigations are still pending with regard to Belgium and Hungary.
3. Powers of the National Regulatory Authority/remedies
The obligation to adopt decisions to define relevant markets, which may differ from those identified by the Commission if national circumstances so require, is one of the key prerogatives of national regulators in their duty to safeguard competition and protect consumers. National regulators must be given the powers and means necessary to regulate wholesale and retail markets in line with the aims and requirements of EU telecoms rules.
Since the powers of the National Regulatory Authority were not adequately transposed into national law, the Commission had launched infringement proceedings against various Member States (see IP/05/430, MEMO/05/478, IP/05/1269 and MEMO/05/372).
Following Poland's replies to the Commission's letter of formal notice and reasoned opinion, the Commission still deems that the Polish national legislation is not in line with the Access Directive in as much as all operators are obliged to negotiate not only interconnection of their networks but also other forms of access. The regulator does not seem to have the specific powers to impose particular obligations irrespective of the market power of the undertakings involved. The Commission is therefore referring Poland to the European Court of Justice.
4. Universal Service
Compliance with the European Union’s rules on the universal service in the electronic communications sector is a key element of the framework. These 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.
To this end, Member States may designate one or more undertakings to provide the universal service, and the EU’s Universal Service Directive stipulates that there should be no a priori exclusion of telecoms operators from the possibility of being designated to offer such services.
The Commission expressed concerns as to whether this principle had been correctly transposed into the national laws of France, both in a letter of formal notice and a reasoned opinion (see IP/06/464).
The Commission is referring France to the European Court of Justice because French law continues to restrict a priori designation of suppliers of the universal service to operators capable of providing the universal service throughout France.
Where can I find further information on pending infringement proceedings
concerning the electronic communications sector?
What is the EU regulatory framework for electronic communications?
The EU regulatory framework for electronic communications came into force in 2002 and consists of five Directives:
What are the regulatory principles of the EU regulatory framework for electronic communications?
The liberalisation of telecommunications, completed in 1998, was generally considered a notable success. Opening up formerly monopolistic markets led to dramatically lowered prices and improved services for both consumers and business, boosting Europe’s communications industry and creating economic growth.
Continuous technological innovation, however, overtook the telecoms regulatory regime. Digitisation now allows many kinds of content to be delivered over different networks. The Internet has become a global infrastructure for a range of electronic communications services. Information and communications technologies are converging, opening up considerable possibilities for new industries and services.
The EU regulatory framework for electronic communications tackles this technological convergence and extends and adapts the benefits of liberalisation to electronic communications in general.
Based on the experience of telecoms liberalisation, policy makers believe that extending competition and ensuring opportunity and reward for innovative companies is the key to promoting technological advance. So why regulate? Why not let market forces alone generate growth in the e-communications sector?
The difficulty is that Europe’s telecommunications industry originated in state-run monopolies, leaving a legacy of imperfect competitive conditions.
Continued regulation is therefore essential for as long as these former monopolists have significant market power, to ensure a level playing field for new market entrants.
Another reason is that market forces alone may lead to the exclusion of some social groups from essential public services. The new regulatory system therefore recognises a universal service obligation to ensure basic services at affordable prices to all in cases where the market alone does not provide.
There are therefore a number of key principles underlying the Directives of the EU regulatory framework for electronic communications. These are summarized below.