1999 REVIEW OF TELECOMMUNICATIONS LEGISLATION
(20666)
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COM(99) 539
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Commission Communication : Towards a new framework for Electronic Communications infrastructure and associated services. The 1999 Communications Review.
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| Legal base:
| — |
| |
| Department:
| Trade and Industry |
| Basis of consideration:
| EM of 19 November 1999
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| Previous Committee Report:
| None |
| To be discussed in Council:
| 30 November 1999 |
| Committee's assessment:
| Politically important |
| Committee's decision:
| Not cleared; further information requested
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The Commission Communication
8.1 This is the first major review by the
Commission of the telecommunications[39]
regulatory package since 1 January 1998, when the legislation
completing the liberalisation of the market came into force. It
proposes, and seeks views on, the main elements for a new framework
to cover all communications infrastructure and associated services,
to adapt it to the development of competition since liberalisation.
It draws on several other documents which have been issued simultaneously:
- the Fifth Implementation report on the telecoms
regulatory package[40];
- the Communication on the results of the public
consultation on the Green Paper - "The Next Steps in Radio
Spectrum Policy..."[41];
- the Commission's report on the development of
the market for digital television in the EU[42];
and
- the results of the Commission's consultation
on the Convergence Green Paper.[43]
8.2 The Commission sets out policy objectives,
regulatory principles and proposals for the design of a new regulatory
framework. It analyses the policy issues involved and, in Chapter
5, proposes measures to address the issues identified.
8.3 Three existing policy objectives which
the Commission suggests should apply in the new framework are:
- promoting an open and competitive market for
European communication services;
- consumer protection to meet the needs of users
and society; and
- consolidation of the internal market in a converging
environment so that operators in similar circumstances are treated
in similar ways.
8.4 To support these policy objectives,
the Commission identifies five principles, so that future regulation
would be:
- based on these clearly defined policy objectives;
- the minimum necessary to meet those objectives;
- technologically neutral so that the same service
is regulated in an equivalent manner regardless of delivery;
- enforced as closely as practicable to the activities
being regulated, regardless of whether regulation has been agreed
globally, regionally or nationally; and it would
- strike the right balance between flexibility,
in a dynamic market, and legal certainty.
8.5 To support these principles the Commission
proposes a structure for a new regulatory framework, comprising:
- Community sector-specific legislation, consisting
of a Framework Directive identifying general and specific policy
objectives, and the rationalisation of current measures into four
specific Directives on licensing and authorisations, access and
interconnection, universal service, and privacy and data protection;
- accompanying non-binding measures in the form
of recommendations, guidelines, codes of conduct and self-regulation
consistent with the framework of general principles set out in
specific Directives, but able to respond flexibly to changing
market conditions; and
- greater reliance on the general competition rules
of the Treaty, allowing existing sectoral regulation to be progressively
replaced as competition becomes more effective, ultimately limiting
regulation to areas where policy objectives cannot be achieved
by competition alone.
8.6 The Commission therefore sets out a
range of proposals, which the Minister for Small Business and
E-Commerce, (Ms Patricia Hewitt), summarises in her EM as including:
"Licensing and authorisation
— The Commission proposes use of general authorisations
as the basis for licensing communications networks and services,
with specific authorisations reserved for radio spectrum and numbers.
The existing Licensing Directive would also be streamlined. The
new framework would include all broadcast networks (terrestrial
and cable) as well as telecommunications networks in line with
the principle of technological neutrality. The Commission also
reports on the outcome of the study on the creation of a Euro-regulator
which concludes that certain regulatory functions are best executed
at EU level, but that this is best achieved by improving existing
structures.
"Access and interconnection — The
new framework would bring together aspects of existing Directives
and establish common principles for regulation of access and interconnection
across all communications infrastructure, with the aim of reducing
regulatory intervention as competition develops.
"Management of radio spectrum —
The Commission proposes the establishment of a new regulatory
framework through a Decision which would ensure that spectrum
is harmonised when needed to implement Community policies and
provide a basis for enforcing more stringent Member States' compliance
with CEPT[44] measures.
It also proposes the establishment of a Spectrum Policy Expert
Group of Administrations and users to advise the Commission and
address radio spectrum policy issues at Community level, and that
political support for European positions at World Radio Conferences
should be strengthened through the involvement of the Council.
The Licensing Directive would be amended to permit spectrum trading.
This section should be read in conjunction with the Explanatory
Memorandum submitted on the Commission's Communication on the
outcome of consultation on the Radio Spectrum Green Paper23.
"Universal service — The Commission
proposes that the current definition of universal service as voice
telephony, fax and data transmission via modem should be maintained,
but reviewed periodically. The Commission will also keep under
review Member States' funding schemes for universal service.
"Interests of users and consumers —
The Commission proposes a number of measures including: updating
and clarifying the Telecoms Data Protection Directive (97/66/EC)
to take account of technological developments and convergence;
enhancing the Single European Emergency Call Number Decision by
requiring caller location to be provided; consolidating existing
complaint handling and dispute settlement procedures; increasing
transparency, in particular concerning tariffs for consumers;
and enhancing measures on quality of service.
"Numbering, naming and addressing —
The Commission proposes: to keep Internet naming and addressing
under Review; to ensure co-ordination of European positions in
international bodies; extend operator number portability to mobile
operators; strengthen the current framework regarding numbering.
"Specific competition issues —
The Commission proposes to use the competition law concept of
dominant position as the more appropriate trigger for certain
sector-specific obligations, in particular cost-orientation and
non-discrimination, while maintaining the lower threshold of significant
market power for other obligations, e.g. obligations to negotiate
access and transparency.
"Institutional issues — The Commission
proposes to replace the two existing telecommunications committees
— the ONP (Open Network Provision) Committee and the Licensing
Committee — with a new Communications Committee. A new High
Level Communication Group consisting of the Commission and National
Regulatory Authorities (NRAs) would assist the Communications
Committee."
8.7 With regard to Universal Service,
the Commission comments that the type of services which may be
financed by funding schemes must be carefully assessed so that
there is no risk of distortion of competition and an unfair cross-subsidy
by the majority of consumers to higher bandwidth users (generally
businesses and "early adopters").
The Government's view
8.8 The Minister comments on the policy
implications of the review as follows:
"As competition develops
and different stages are reached across Europe, the Government
agrees that the regulatory approach will need to adapt to be flexible
and to avoid unnecessary intervention. The Government believes
the Commission has correctly identified a future approach to regulation
which recognises that markets are changing and competition is
developing, but not at a uniform rate.
"The Government supports the Commission's approach
of a régime based on an agreed set of objectives which
are universally applicable, a set of principles which would govern
the means by which these objectives could be met and the application
of non-binding guidance describing how the principles would be
interpreted. The Government also welcomes the Commission's recognition
that in many cases it will be possible to achieve regulatory objectives
through codes of practice or guidelines devised by market players,
based on a co-regulatory approach. The Government agrees that
regulation should be flexible, technology neutral and promote
competition and innovation, while protecting the interests of
consumers. In particular, the Government welcomes the substantial
simplification of the current regulatory framework and proposed
reduction in the number of legal measures from 20 to six.
"The Government welcomes the Commission's decision
that a European Regulatory Authority for communications services
is not necessary at this stage: what is necessary is that there
are strong independent national regulatory authorities which enforce
harmonised guidelines.
"In relation to the Commission's key policy
proposals:
"Licensing and authorisation —
the Government welcomes the proposal to migrate individual licences
to general authorisations for telecommunication services wherever
possible to streamline the existing system. However, the Government
notes that further restrictions on the conditions that might be
imposed under a revised Licensing Directive could be at the expense
of current national flexibility.
"Authorisation of broadcasting transmission
networks — the Government is committed to keeping the
regulatory framework for converging sectors effective and up-to-date.
We will consider further the Commission's proposals in this area.
"Access and interconnection — the
Government agrees with the Commission that access and interconnection
are crucial areas for ensuring fair competition in telecoms markets.
It notes that there have been some uncertainties in the current
Directives in these areas and believes it to be important that
these are clarified in the new regulatory framework for communications.
"Radio spectrum — the Government
welcomes the Commission's proposals to amend the Licensing Directive
to permit, but not to mandate, the introduction of secondary spectrum
trading, which the Government believes could be a powerful mechanism
for redistributing spectrum in response to rapidly changing patterns
of demand. The Government further agrees that regulatory safeguards
may be desirable in order to ensure that spectrum trading does
not lead to undesirable speculation or abuse of dominance. These
safeguards should, as far as possible, be left to the discretion
of Member States so that they can be tailored to reflect national
conditions. The Government also welcomes the recognition that
'spectrum' licensing is different to 'services' licensing and
that regulatory provisions need to be applied when authorising
use of the spectrum; these issues will be addressed in the proposals
to amend the Licensing Directive. This section should be read
in conjunction with the policy implications set out in more detail
in the Explanatory Memorandum submitted on the Commission's Communication
on the outcome of consultation on the Radio Spectrum Green Paper
23.
"Universal service — in the UK
universal service provision is currently being reviewed by OFTEL
and the case for increasing the level is being examined. OFTEL's
initial view, subject to outcome of consultation, is that extending
universal service to include access to higher-bandwidth services
is not appropriate at this time (for the reasons set out by the
Commission). The Government endorses the Commission's view that
funding issues should be kept under review and decisions to establish
funding schemes should be fully justified.
"Institutional issues — the Government
welcomes the clarity and coherence of the Commission's proposals
to separate policy (Communications Committee) from implementation
(High-Level Communications Group). It notes that the Commission
will need to ensure that Member States, NRAs and market players
comply with non-binding measures in achieving the regulatory objectives
set out in EU legislation."
Consultation
8.9 According to the Minister, there is
close liaison between the DTI and industry through the Policy
Focus Group on the 1999 Review, which was established by OFTEL
and DTI. They intend to hold a workshop with industry and consumer
groups in early February to help to develop the UK position on
the Communication. The Radiocommunications Agency will also consult
industry through its established consultation mechanisms.
Timetable
8.10 The consultation period ends on 15
February 2000 and the Commission intends to bring forward legislative
proposals by May 2000, for adoption and implementation in time
to constitute the regulatory régime for communications
from 2003 - 2007.
8.11 The Minister says that the 30 November
Telecoms Council is expected to adopt brief Conclusions on the
Communication.
Conclusion
8.12 It is clearly important to the British
telecoms industry that the Government's position on any proposal
to revise the package takes the views of the industry into account.
We ask the Minister to:
- report back to us after the November Telecoms
Council, providing a copy of the Conclusions adopted; and
- in February 2000, after the workshop and before
submitting its formal response to the Commission, provide us with
a draft, if not a final copy, of the Government's response. At
the same time, we ask the Minister to explain the views of British
industry, including any significant concerns raised.
8.13 Meanwhile, we do not clear the document.
39 Hereinafter referred to as 'telecoms' Back
40 (20657)
- ; see paragraph 7 above. Back
41 (20668)
- ; on which we hope to report next week. Back
42 (20665)
- ; on which we hope to report next week. Back
43 (18724)13289/97;
see HC 155-xiv (1997-98), paragraph 5 (28 January 1998) and HC
155-xxiii (1997-98), paragraph 1 (1 April 1998): (19979) 6571/99;
see HC 34-xx (1998-99), paragraph 10 (19 May 1999). Back
44 Conférence
Européenne de Post et Télécommunications. Back
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