Select Committee on European Scrutiny Ninth Report


COM(00) 393

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
Department: Trade and Industry
Basis of consideration: SEM and Minister's letter of 19 March 2001
Previous Committee Report: HC 23-xxix (1999-2000), paragraph 15 (15 November 2000)
To be discussed in Council: 4-5 April 2001
Committee's assessment: Politically important
Committee's decision: Not cleared; further information requested


  5.1  This proposal is one of seven 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 Communications Review which we considered on 24 May and 19 July[17] and which was debated in European Standing Committee C on 16 February 2000.[18]

  5.2  The proposal sets out the 'horizontal provisions' that would form the harmonised regulatory framework for electronic communications networks and services across the European Community. The intention is to exclude the regulation of broadcast content from the scope of the proposal.

Scrutiny and the timetable

  5.3  We considered the proposal on 15 November 2000 but did not clear it as it was still subject to negotiation. We asked the Government to bring us up to date before the 22 December Telecoms Council, at which it was expected that a Common Position would be sought. However, it became clear before that date that more work on the proposal was needed. The Swedish Presidency now aims to reach political agreement on the proposal at the 4-5 April Telecoms and Transport Council and a Common Position on it at the 27-28 June Telecoms and Transport Council. The European Parliament had its First Reading on the proposal on 1 March.

The Minister's letter

  5.4  In a letter dated 19 March, the Minister lists four other proposals of the seven which are expected to form the new regulatory framework. She says that progress on these four, the proposed Communications Data Protection Directive,[19] the proposed Universal Service and Users' Rights Directive,[20] the proposed Spectrum Decision[21] and the proposed Competition Directive,[22] has been limited. None is scheduled for substantive consideration before the June Council.

  5.5  The Minister has submitted Supplementary Explanatory Memoranda on two other proposals of the seven. We discuss them elsewhere in this Report.[23]

The Supplementary Explanatory Memorandum (SEM)

  5.6  The Government had a number of concerns over specific aspects of this proposal, though it broadly endorsed the Commission's approach. In her SEM, the Minister for Small Business and E-Commerce at the Department of Trade and Industry (Ms Patricia Hewitt) says that:

    "The Government is satisfied that the results to date in the Council working group have addressed many of its concerns as set out in her Explanatory Memorandum 10962/00 [of 10 October 2000][24].

    "—  Member States are agreed that the new regulatory framework is clearly without prejudice to measures taken at Community or national level to pursue general interest objectives, in particular relating to content regulation and audiovisual policy. ... the Government [now] believes that the risk of unintended or undesirable effects on the regulation of content broadcast on television and radio or on public policy relating to broadcasting has been reduced to a minimum;

    "—  Member States are agreed that the proposals in Article 6 to allow the Commission to require National Regulatory Authorities (NRAs) to amend or withdraw proposed measures of specified types before they come into force are neither appropriate nor the best means of ensuring consistency of approach. Instead, if the Commission indicates that it has serious doubts about the compatibility of a proposed measure with Community law, it should be able to delay adoption for a period of up to one month beyond the original consultation period while it formalises its objection. However, the final judgement on whether to adopt should remain with the consulting NRA, notwithstanding the Commission's right to initiate infraction proceedings after the fact;

    "—  Member States are agreed that it would be more appropriate in Article 14 for NRAs to define the product and service markets where ex ante[25] regulation could be imposed than for the Commission to undertake this task. The Commission would nonetheless recommend definitions that NRAs would be able to adapt to local circumstances following public consultation and full justification to the Commission and other NRAs of their reasons for doing so;

    "—  Member States are agreed that spectrum trading should be permitted in accordance with procedures laid down by NRAs. Provisions requiring excessively intrusive regulation by NRAs, and the restriction of trading to licences that have been auctioned, have been removed;

    "—  Member States are agreed that the timescale envisaged in Article 17 for the resolution of disputes should, at four months (except in exceptional circumstances), be longer than the two months proposed by the Commission. The same is true of the timescale for market analysis in Article 14, where Member States favour 'as soon as possible' rather than the Commission's two months; and

    "—  Member States are agreed that the provisions on rights of way in Article 10 should not require the creation of new procedures inconsistent with general property law.

    "Only one issue remains outstanding at the time of writing:

    "—  while most Member States share the belief that the definition of significant market power (SMP) in Article 13 might not enable NRAs to intervene in all cases where this is necessary to promote and protect effective competition, agreement on how precisely to address this problem has not yet been reached. Nonetheless, there is broad support for incorporating additional text in the Article to provide greater legal certainty for NRAs in applying collective dominance ex ante in the electronic-communications sector. The Swedish Presidency has tabled proposals—consistent with this approach, which the Government supports—as part of the political agreement that it hopes to secure at the 4 April Telecoms Council."

Regulatory Impact Assessment

  5.7  The Minister says that implementation of this proposal, and the other two telecoms regulatory framework proposals considered in this Report, is envisaged through the Bill foreseen in the Government's December 2000 White Paper, A new future for communications (Cm 5010). Since the regulatory impact assessment for the White Paper addresses the costs and benefits of this proposal, no separate regulatory impact assessment for this proposal is considered necessary.


  5.8  The Minister has demonstrated that the majority of concerns with this proposal have now been dealt with in negotiation and in the light of clarification from the Commission. However, an important concern over the definition of significant market power remains outstanding. The Minister says that the Swedish Presidency has tabled proposals on which it hopes to secure political agreement at the 4 April Telecoms Council. We ask her to attach the unofficial texts of these proposals, under cover of a letter confirming the Government's view of them, to reach us by 26 March at the latest.

  5.9  Meanwhile, we do not clear this proposal.

17  (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

18  Official Report, European Standing Committee C, 16 February 2000. Back

19  (21561) 10961/00; see HC23-xxix (1999-2000), paragraph 14 (15 November 2000). Back

20  (21566) 10963/00; see HC23-xxix (1999-2000), paragraph 16 (15 November 2000). Back

21  (21587) 11244/00; see HC23-xxix (1999-2000), paragraph 19 (15 November 2000). Back

22  (21623) - ; see HC23-xxix (1999-2000), paragraph 21 (15 November 2000). Back

23  See paragraphs 7 and 8 of this Report. Back

24   (21562) 10962/00; see headnote to this paragraph. Back

25  A system of prior review and control. Back

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