COMMON REGULATORY FRAMEWORK FOR ELECTRONIC
COMMUNICATIONS NETWORKS AND SERVICES
(21562)
10962/00
COM(00) 393
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Proposal for a Directive of the European Parliament and of the Council
on a common regulatory framework for electronic communications
networks and services.
|
| Legal base:
| Article 95 EC; co-decision; qualified majority voting
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| |
| Document originated:
| 12 July 2000 |
| Forwarded to the Council:
| 24 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; further information requested
|
Background
15.1 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 in the 1999 Communications Review which
the Committee considered on 24 May and 19 July[46]
and which was debated in European Standing Committee C on 16 February
2000.[47]
A further proposal, the draft Council Regulation on unbundled
access to the local loop[48],
was considered and cleared on 25 October and 1 November. It will
complement the existing telecoms framework.
15.2 The other six proposals which form
part of the new framework are also considered today. They are:
— a draft Council
Directive on the authorisation of electronic communications networks
and services[49];
— a draft Council Directive on access to,
and interconnection of, electronic communications networks and
associated facilities[50];
— a draft Council Directive on universal
service and users' rights relating to electronic communications
networks and services[51];
— a draft Council Directive on the processing
of personal data and the protection of privacy in the electronic
communications sector[52];
— a draft Council Decision on a regulatory
framework for radio spectrum policy in the European Community[53];
— a Commission Directive on competition
in the markets for electronic communications services[54].
The draft Directive
15.3 The aim of the proposed Directive considered
here is to establish a harmonised regulatory framework for electronic
communications networks and services across the Community. It
sets out the principles and objectives that national regulatory
authorities (NRAs) would be obliged to follow in their decision-making
at national level, and also their tasks and duties. It also sets
out a number of horizontal provisions common to more than one
Directive in the new regulatory framework.
15.4 The contents can be summarised as follows:
— Chapter I: Scope, aim and definitions
15.5 The scope covers all satellite and
terrestrial networks including both fixed and wireless —
that is, the public switched telephone network, networks using
internet protocol (IP), networks and services used for radio and
television broadcasting and cable TV, mobile and terrestrial broadcast
networks. It clarifies that the proposed Directive is not intended
to cover services such as broadcast content, or electronic commerce
[content] services. It also clarifies that terminal equipment
is not within the scope of the new framework.
— Chapter II: National Regulatory Authorities
(NRAs)
15.6 The principles for the establishment
of NRAs are set out in this chapter. NRAs must be independent
of operators of electronic communications networks and services,
responsibility for tasks under the Directives must be publicised,
and there must be a right of appeal to a body independent of the
NRA. Certain procedures to which they are subject include those
relating to consultation, transparency, and the exchange and provision
of information to other NRAs and the Commission;
— Chapter III: Duties and tasks of the National
Regulatory Authorities
15.7 The Articles grouped in this chapter
cover the tasks and duties of NRAs in relation to:
— competition,
the internal market and users' interests; the allocation and assignment
of scarce resources (such as radio spectrum and numbers);
— the harmonisation of the assignment and
use of the radio spectrum; consultation with other NRAs and the
Commission;
— granting of rights of way; mechanisms
for co-location and facility-sharing by operators; and
— requirements for accounting separation.
Spectrum trading as a tool to assist spectrum management
would be permitted.
— Chapter IV: Common and general provisions
15.8 Articles 13-25 set out the provisions
common to more than one Directive in the regulatory framework:
— Competition
issues. Article 13 defines the concept 'significant market
power' (SMP) which would trigger defined obligations to be placed
on dominant operators. Under Article 14, the Commission will be
required to publish Guidelines on the market analysis procedure
and calculation of SMP, to be used by NRAs in deciding whether
to impose, maintain or withdraw SMP obligations. The Commission
will also issue a Decision defining the product markets where
regulation could be imposed;
— Harmonisation. Article 16 would
provide for greater harmonisation of implementation by NRAs of
directives through Commission guidance, and will allow the Commission
to propose binding harmonisation measures where it considers divergence
of national measures constitutes a barrier to the Single Market;
— Dispute resolution. Articles 17
and 18 set out dispute resolution procedures to deal with disputes
between undertakings in a single Member State and in two or more
Member States; and
— Institutional issues. Other articles
establish the new Communications Committee and the High Level
Communications Group.
— Chapter V: Final provisions
15.9 Article 26 repeals the existing telecoms
Directives from the date of entry into force of the new regulatory
package.
— Impact on UK law
15.10 The existing package of telecommunications
legislation is implemented by amendments to the Wireless Telegraphy
Act 1949 and the Telecommunications Act 1984, a range of secondary
legislation under the European Communities Act 1972, and operating
licences issued under the Telecommunications Act. According to
the Minister for Small Business and E-Commerce at the Department
for Trade and Industry (Ms Patricia Hewitt),in her Explanatory
Memorandum of 10 October, implementation of this proposal would
be likely to be done through the Government's proposed reform
of the framework of communications regulation and/or regulations
under the European Communities Act 1972.
The Government's view
15.11 The Minister comments fully, as follows:
"The Government welcomes
the Commission's proposals to replace the current regulatory framework
for telecommunications with a single substantially reduced package
of legal measures applying to all electronic communications. The
Government broadly endorses the Commission's overall approach
of a single framework of regulation which removes existing barriers
to the single market, is flexible and technology neutral, and
avoids unnecessary intervention where competition has become effective
whilst promoting the interests of consumers where competition
does not achieve this. The moves towards convergence in the communications
sector make such a regulatory framework essential for the continuing
development of competition and innovation vital to achieving the
EU's objective of becoming the most competitive and dynamic knowledge
economy in the world.
"The Government welcomes the fact that the Commission's
proposals accord with the principles being taken forward in the
UK, particularly in the context of the forthcoming Communications
White Paper. The White Paper will address regulation of the converging
telecoms and broadcasting sectors. 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.
"The Government supports the Commission's approach
of a framework Directive setting out the objectives and principles
which NRAs should follow which would be supported by non-binding
guidance to assist regulators to ensure consistent application
of legislation across the EU. However, the Government has some
concerns about the technical detail of the Commission's proposals
as follows:
"— the Government supports the Commission's
aim of ensuring a coherent and harmonised framework for regulation
of electronic communications, but considers that it is important
to ensure that the proposals do not have unintended or undesirable
effects on the regulation of content broadcast on television and
radio, or on public policy relating to broadcasting;
"— whilst recognising the need to
ensure consistency of approach across Member States, the Government
rejects the proposals in Article 6 which would allow the Commission
to require NRAs to amend or withdraw proposed decisions before
they came into force. The Government would prefer to see a more
balanced approach between harmonisation at a European level and
retaining the flexibility for NRAs, who are better placed to act
quickly and appropriately, to regulate to ensure fair competition
as national circumstances dictate;
"— the Government supports the Commission's
recognition of the need to retain sectoral regulation and not
rely solely on competition law for the reasons it sets out (i.e.
the existence of former monopolists, bottleneck resources and
technical barriers to market entry). [But it] has some concerns
that reliance on collective significant market power (Article
13) might not enable NRAs to intervene in all cases where this
is necessary to promote and protect competition. For example,
in oligopolistic markets in the electronic communications sector,
it is not clear that any operator would be found to have significant
market power even if it was clear that competition was not fully
effective. Additionally, the Government considers that it would
be more appropriate for NRAs, who are closer to market conditions,
rather than the Commission, to define the product markets where
such ex ante regulation could be imposed, although Commission
guidance in this area would be helpful (Article 14);
"— the Government welcomes the proposals
in Article 8 to permit the use of spectrum trading as a tool to
assist spectrum management. However, we have some concerns with
the way the provision has been drafted since it would appear to
unnecessarily restrict the ways in which this tool could be used.
The proposal rightly retains involvement by the NRA to supervise
the spectrum market but mandates too intrusive a role and restricts
trading to licences that have been auctioned. Deciding how to
use the tool should be a matter for individual Member States;
"— the Government agrees with the
Commission that access and interconnection are crucial areas for
ensuring fair competition in electronic communications markets
requiring regulatory certainty, but considers that the timescale
envisaged by the Commission for resolution of disputes (Article
17) and market analysis (Article 14) may make it difficult for
regulators to give full consideration to cases;
"— the Government welcomes the Commission's
aim of clarifying provisions on rights of way in Article 10 but
is concerned lest these be inconsistent with general property
law in various Member States including the UK".
— Consultation
15.12 The Minister says that her Department
and OFTEL have been liaising closely with industry and consumer
representatives throughout the 1999 Communications review. The
Department, OFTEL and the Radiocommunications Agency are continuing
to consult interested stakeholders on the Commission's proposals
through established consultation mechanisms. In addition, she
says, the Radiocommunications Agency have consulted on spectrum
secondary trading.
— Regulatory Impact Assessment
15.13 The package of proposals aims to update
the current regulatory framework in the light of convergence in
communications. The majority of the proposals place obligations
mainly on Member States or NRAs, although some place obligations
on market players directly or indirectly. The Minister says that
the package as a whole will give rise to greater competition,
innovative market offerings and better protection for consumers.
She undertakes to provide a regulatory impact assessment on the
package of proposals in a supplementary Explanatory Memorandum.
— Timetable
15.14 The French Presidency aim to reach
a Common Position on this Directive at the 22 December Telecoms
Council.
Conclusion
15.15 The Minister has spelt out the
Government's broad support for the proposal, but she has also
drawn attention to those aspects of it which are of concern. It
is under discussion in the Council Working Group and there is
still time for changes to be made before it is put to the Council
for agreement on a Common Position.
15.16 We ask the Government to bring
us up to date with the proposal in good time for us to consider
it again before the 22 December Council.
15.17 Meanwhile, we shall not clear this
document.
46 (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
47 Official
Report, European Standing
Committee C, 16 February 2000. Back
48 (21563)
10964/00; see HC 23-xxvii (1999-2000), paragraph 22 (25 October
2000) and (21695) - ; see HC 23-xxvii (1999-2000), paragraph 32
(1 November 2000). Back
49 (21567)
10979/00; see paragraph 17 of this Report. Back
50 (21560)
10960/00; see paragraph 13 of this Report. Back
51 (21566)
10963/00; see paragraph 16 of this Report. Back
52 (21561)
10961/00; see paragraph 14 of this Report. Back
53 (21585)
11117/00; see paragraph 18 of this Report. Back
54 (21623)
- ; see paragraph 21 of this Report. Back
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