Select Committee on European Scrutiny First Report


COM(00) 392

Draft Directive of the European Parliament and of the Council on universal service and users' rights relating to electronic communications networks and services.

Legal base: Article 95 EC; co-decision; qualified majority voting
Department: Trade and Industry
Basis of consideration: Minister's letter of 22 June and SEM of 25 June 2001
Previous Committee Report: HC 23-xxix (1999-2000), paragraph 16 (15 November 2000)
Discussed in Council: 28 June 2001 Transport and Telecommunications Council
Committee's assessment: Politically important
Committee's decision: Cleared, but further information requested


45.1  The aim of this proposal is to revise, consolidate and update existing legislation on universal service and users' rights in relation to electronic communications networks, including measures for compensating service providers, without distorting competition.

45.2  Our predecessors left it uncleared on 15 November 2000 and asked the Minister to provide a later text if the one considered then was amended substantially, before it was put to Council with a view to reaching agreement on a Common Position. They also asked to be kept informed of progress, and in a letter dated 27 March 2001 the then Minister for Small Business and E-Commerce (Ms Patricia Hewitt) stated that the Council Working Group had completed one read-through. She said that progress had been limited and no substantive consideration of the proposal was expected before the Transport and Telecommunications Council on 27-28 June.

The Supplementary Explanatory Memorandum (SEM)

45.3  The Minister for e-Commerce and Competitiveness (Mr Douglas Alexander) says in his Supplementary Explanatory Memorandum of 25 June that the European Parliament (EP) gave the proposal its first reading on 13 June and the Swedish Presidency subsequently indicated that it aimed to reach a Common Position on the proposal at the 27-28 June Transport and Telecommunications Council. According to its press release, the Council reached political agreement on a Common Position at that meeting.

45.4  The Minister recalls that the Government did not point to any particular difficulties with the text in its Explanatory Memorandum of 10 October 2000 and no new concerns had arisen in the Working Group. He says that, in particular Member States are agreed that:

    "—  the time is not right for increasing the level of universal service, in particular to high-bandwidth services, but that the situation needs to be kept under review;

    "—  the Commission's proposals on retail-tariff regulation are too narrow and an approach to retail regulation modelled on that in the proposed Access Directive[74] — giving national regulatory authorities broad discretion to impose appropriate obligations where competition is not effective — would be more forward-looking; and

    "—  further legal certainty is required on Member States' ability to impose must-carry obligations on providers of electronic-communications networks, with compensation for such obligations left to Member States."

45.5  In a letter dated 22 June, the Minister notified us of his intention to support the Common Position at the Council. The proposal forms one element of the 1999 Communications Review, the timely delivery of which, as part of the eEurope Action Plan, would, he said, facilitate the growth of e-commerce by significantly reducing the costs of internet access.

Regulatory Impact Assessment

45.6  Implementation of the proposal is envisaged through the legislation foreseen in the Government's December 2000 White Paper, A new future for communications (Cm 5010). An initial Regulatory Impact Assessment (RIA) of the proposals contained in the White Paper, which include those expected to be required by this proposed Directive, is attached to the SEM. It covers the range of the likely costs and benefits and invites views from consumers and industry on quantifying those costs and benefits. The Minister promises a full RIA when detailed plans to implement the proposals in the White Paper have been developed. He adds that the Government has convened an expert group from the government departments and regulatory authorities involved to address the impact, in the broadest possible sense, of regulation across the markets affected by these proposals.


45.7  We thank the Minister for providing us with this information and for informing us of his intention to support the Common Position. We accept his reasons for doing so and ask him to send us the Common Position text, with his comments on whether the Government would prefer to have seen any aspects of it drafted differently.

45.8  We now clear this document.

74  (21560) 10960/00; see HC 28-ix (2000-01), paragraph 7 (21 March 2001). Back

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