TELECOMS INTERCONNECTION AND ACCESS
(21560)
10960/00
COM(00) 384
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Draft Directive of the European Parliament and of the Council on
access to, and interconnection of, electronic communications networks
and associated facilities.
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| Legal base:
| Article 95 EC; co-decision; qualified majority voting
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| Document originated:
| 12 July 2000 |
| Forwarded to the Council:
| 25 August 2000 |
| Deposited in Parliament:
| 12 September 2000 |
| Department: |
Trade and Industry |
| Basis of consideration:
| EM of 10 October 2000 |
| Previous Committee Report:
| None |
| To be discussed in Council:
| 22 December 2000 |
| Committee's assessment:
| Politically important |
| Committee's decision:
| Not cleared; awaiting further information on progress
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Background
13.1 This draft Directive is one of seven
proposals for legislation that will form the new regulatory framework
for electronic communications networks and services. They were
anticipated in the Commission Communication on the results of
the public consultation on the 1999 Communication Review which
the Committee considered on 24 May and 19 July[35]
and which was debated in European Standing Committee C on 16 February
2000[36].
13.2 The other six proposals are also considered
today. They are listed in the paragraph on the draft Directive
on a common regulatory framework for electronic communications
networks and services[37].
13.3 A further proposal, the draft Council
Regulation on unbundled access to the local loop[38],
was considered and cleared on 25 October and 1 November. It will
complement the existing telecoms framework.
The draft Directive
13.4 The draft Directive covers access to,
and interconnection of, electronic communications networks and
associated facilities, including networks used for broadcast services.
The aim is to revise and consolidate the existing regulatory framework
relating to the market between suppliers of networks and services,
to ensure sustainable competition, interoperability of services
and that the consumer benefits.
13.5 In line with the policy objectives
of the new regulatory framework, the proposal aims to build on
the premise that sector-specific ex-ante regulation[39]
will be progressively withdrawn and competition rules will be
the prime vehicle for regulating the electronic communications
market, once the market becomes effectively competitive. Meanwhile,
the existing obligations on providers of electronic networks and
services that have significant market power (SMP), based on the
competition law concept of dominant position, to interconnect
and give access to their networks to other service providers,
and relating to transparency, non-discrimination and cost orientation,
would continue.
13.6 The contents of the proposed Directive
can be summarised as follows:
— Scope, aim and definitions
13.7 The proposal would apply to all forms
of communications networks carrying publicly-available communications
services, including fixed and mobile communications networks,
cable TV networks, networks used for terrestrial broadcasting,
satellite networks, and networks using internet protocol;
— General framework and principles
13.8 Article 3 carries forward the existing
obligations on access and interconnection. Article 4 would set
out the rights and obligations of access and interconnection for
providers of electronic communications networks, in particular
that all network operators have a right and an obligation to negotiate
interconnection with each other. Under Article 5 the National
Regulatory Authority (NRA) has powers to intervene to impose obligations
on market players with SMP, and to resolve disputes;
— Continuity with former obligations and
market review procedures
13.9 The obligations from the existing TV
standards Directive 95/47/EC on network operators' responsibilities
regarding digital services would be carried forward (Article 6).
To ensure continuity with the existing regulatory framework, the
existing obligations on access and interconnection[40]
would continue until NRAs have carried out the market analysis
provided for in the draft Framework Directive.30
13.10 NRAs would also be able to impose
specific obligations on operators with SMP concerning:
— transparency,
for instance with regard to prices, or terms and conditions for
access, interconnection or interoperability (Article 9);
— non-discrimination, where this
could lead to distortion of competition and consequent disadvantages
for end-users (Article 10);
— accounting separation, to make
wholesale prices and internal cross transfers transparent within
a vertically integrated company, where an operator provides input
facilities that are essential to other service providers, while
competing itself in the same downstream market (Article 11);
— access to and use of specific network
facilities in situations where denial of access by an operator
would hinder the development of a sustainable competitive market
at the retail level or would not be in the consumer's interest
(Article 12); and
— price control and cost accounting,
where lack of effective competition means that an operator is
capable of sustaining prices at an excessively high level to the
detriment of end users (Article 13).
— Final provisions
13.11 Article 14 provides for the Communications
Committee, which would be set up under the Framework Directive,
to modify the annex. This sets out the conditions operators of
conditional access systems would be required to provide.
The Government's view
13.12 The Minister for Small Business and
E-Commerce at the Department of Trade and Industry (Ms Patricia
Hewitt) says:
"The Government welcomes
the proposal as part of the Commission's overall approach which
should create a framework for access and interconnection which
is flexible in the light of changing circumstances, and provides
for regulators to have the tools to intervene where problems in
the market occur and competition law is insufficient. This is
in line with the UK's approach as OFTEL's strategy is already
designed to ensure that regulation is only imposed where justified
and is appropriate to the level of competition in the market.
"In particular, the Government supports the
Commission's moves towards a lighter regulatory framework which
would remove ex ante obligations in areas where competition
has become effective, while continuing to provide NRAs with the
tools to place obligations on operators to provide access and
interconnection to further competition and interoperability where
necessary.
"Regarding the detail of the Commission's drafting,
the Government would want to see a requirement on operators with
SMP to be explicitly required to offer interconnection. In addition,
further clarity is needed as to which operators have rights and
obligations to negotiate interconnection. Similarly, the Government
would like to see the linkages between the nature of market power
and the obligations that NRAs can impose in response to be made
clearer and simplified."
Timetable
13.13 The Minister says that the proposal
will be discussed in the Council Working Group. The French Presidency
aims to reach a Common Position on the proposal at the 22 December
Telecoms Council.
Conclusion
13.14 We support the Government's wish
for an explicit requirement to be placed in the Directive on operators
with significant market power to offer interconnection. We regard
this as a key point and we ask the Minister to provide us with
a Supplementary Explanatory Memorandum or letter to bring us up
to date on the draft, covering this and the other aspects on which
she expresses reservations, in good time for us to consider it
before the 22 December Telecoms Council.
13.15 Meanwhile, we shall not clear this
document.
35 (21189) 8330/00; see HC 23-xix (1999-2000), paragraph
7 (24 May 2000) and HC 23-xxv (1999-2000), paragraph 8 (19 July
2000). Back
36 Official
Report, European Standing
Committee C, 16 February 2000. Back
37 (21562)10962/00;
see paragraph 15 of this Report. Back
38 (21563)
10964/00; see HC 23-xxvii (1999-2000), paragraph 23 (25 October
2000) and (21695) - ; see HC 23-xxviii (1999-2000), paragraph
32 (1 November 2000). Back
39 Regulations
which anticipate situations in which competition considerations
would apply. In this case, for instance, the Commission envisages
that NRAs will be able to notify companies having SMP and impose
ex-ante obligations where these companies would be considered
to have a dominant position under competition law and where there
are problems of incumbency and/or of vertical integration, such
that the ex-post remedies of competition law are not adequate
to meet the market problems identified. Back
40 Reference
is made to the Interconnection Directive 97/33/EC, the Voice Telephony
Directive 98/10/EC, the Leased Lines Directive 92/44/EC and the
proposed Local Loop Unbundling Regulation (see footnote 31 above). Back
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