1 European regulatory
framework for electronic communications and services
| (a) (29173) 15379/07 COM(07) 697
(b)(29174) 15387/07 COM(07) 698
(c) (29175) 15408/07 COM(07) 99
(d) (30146) 15424/08 COM(08) 724
(e) (30145) 15422/08 COM(08) 723
(f) (30144) 15419/08 COM(08) 720
(g) (30469) 16496/1/08 —
(h) (30470) 16497/1/08 —
(i) (30471) 16498/1/08 —
(j) (30472) 6622/09 COM(09) 78
| Draft Directive amending Directives 2002/21/EC on a common regulatory framework for electronic communications networks and services, 2002/19/EC on access to and interconnection of electronic communications networks and associated facilities, and 2002/20/EC on the authorisation of electronic communications networks and services.
Draft Directive amending Directive 2002/22/EC on universal service and users' rights relating to telecommunications networks and services, Directive 2002/58/EC concerning the processing of personal data and the protection of privacy in the electronic communications sector and Regulation (EC) No. 2006/2004 on consumer protection cooperation
Draft Regulation establishing the European Electronic Communications Market Authority
Amended Draft Directive amending Directives 2002/21/EC on a common regulatory framework for electronic communications networks and services, 2002/19/EC on access to, and interconnection of, electronic communications networks and services, and 2002/20/EC on the authorisation of electronic communications networks and services
Amended Draft Directive amending Directive 2002/22/EC on universal service and users' rights relating to electronic communications networks, Directive 2002/58/EC concerning the processing of personal data and the protection of privacy in the electronic communications sectors and Regulation (EC) No. 2006/2004 on consumer protection cooperation
Amended Draft Regulation establishing the European Electronic Communications Market Authority
Common Position adopted by the Council on 16 February 2009 with a view to the adoption of a Directive amending Directives 2002/21/EC on a common regulatory framework for electronic communications networks and services, 2002/19/EC on access to, and interconnection of, electronic communications networks and associated facilities, and 2002/20/EC on the authorisation of electronic communications networks and services
Common Position adopted by the Council on 16 February 2009 with a view to the adoption of a Directive amending Directive 2002/22/EC on universal service and users' rights relating to electronic communications networks and services, Directive2002/58/EC concerning the processing of personal data and the protection of privacy in the electronic communications sector and Regulation (EC) No. 2006/2004 on consumer protection cooperation
Common Position adopted by the Council on 16 February 2009 with a view to the adoption of a Regulation establishing the Group of European Regulators of Telecoms (GERT)
Commission Communication on the common positions adopted by the Council on 16 February 2009 on documents (g), (h) and (i)
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| Legal base | (a) to (i) Article 95 EC; co-decision: QMV
(j) —
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| Documents originated | (d) and (e) 6 November 2008
(f) 5 November 2008
(j) 17 February 2009
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| Deposited in Parliament | (d), (e) and (f) 12 November 2008
(g) to (j) 6 March 2009
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| Department | Business, Enterprise and Regulatory Reform
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| Basis of consideration | (a), (b) and (c) Minister's letter 15 December 2008
(d) to (j) EM of 6 April 2009
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| Previous Committee Report | (a), (b) and (c) HC 16-xxxvi (2007-08), chapter 5 (26 November 2008)
(d) to (j) None
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| To be discussed in Council | June 2009
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| Committee's assessment | Politically important
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| Committee's decision | (a) to (f) and (j) Cleared
(g) to (i) Not cleared; further information requested
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Background
1.1 The EU regulatory framework for telecommunications was created
in the 1990s to open national telecommunications markets to competition.
Until then, they had been dominated by state-owned monopolies.
1.2 In 2002, the Council adopted five Directives
to establish a common set of EU rules for the national regulatory
authorities (NRAs) to implement. The objectives of this legislative
framework are to promote competition, consolidate the EU's internal
market and promote the interests of consumers. The Directives
are:
- Directive 2002/21/EC on a common
regulatory framework for electronic communications networks
and services (the Framework Directive);
- Directive 2002/20/EC on the authorisation of
electronic communications networks and services (the Authorisation
Directive);
- Directive 2002/19/EC on access to, and interconnection
of, electronic communications networks and associated facilities
(the Access Directive);
- Directive 2002/22/EC on universal service and
users' rights relating to electronic communications networks and
services (the Universal Service Directive); and
- Directive 2002/58/EC on the processing of personal
data and the protection of privacy in the electronic communications
sector (the Privacy Directive).
1.3 In 2006 and 2007, the Commission reviewed this
framework and concluded that it needed substantial reform because
of:
- new electronic communications
technologies;
- the development of the market for electronic
communications networks and services;
- the continued dominance of a few operators in
some key markets; and
- divergent approaches by Member States to regulation.
1.4 So the Commission proposed amending legislation
to simplify the regulatory processes; change the regulation of
the radio spectrum; require Member States to ensure the independence
of NRAs; establish a new European Electronic Communications Market
Authority to help overcome the current inconsistencies in the
decisions of the NRAs; improve consumers' rights; and strengthen
the security of networks and the privacy of personal information.
To achieve these aims, the Commission proposed:
- document (a) — known
as "the Better Regulation Directive" — to amend
the Framework, Access and Authorisation Directives;
- document (b) — known as "the Citizens'
Rights Directive" — to amend the Universal Service
and Privacy Directives and a Regulation on consumer protection;
and
- document (c), a Regulation to set up the Market
Authority.
Previous scrutiny of documents (a) to (c)
1.5 When we considered documents (a), (b) and (c)
in December 2007,[1] the
Government told us that it welcomed some of the proposals but
had reservations about others. We asked for progress reports on
the negotiations and kept the documents under scrutiny.
1.6 In his progress reports of 5 and 21 November
2008, the Minister for Communications, Technology and Broadcasting
at the Department for Business, Enterprise and Regulatory Reform
(Lord Carter of Barnes) told us that:
- the Government had succeeded
in getting most of the amendments it wanted but continued to oppose
some of the provisions;
- the French Presidency was expected, at the Telecommunications
Council on 27 November, to seek agreement to new compromise texts,
which were not yet available;
- there was a real risk that if the proposals were
not kept alive by some kind of agreement on 27 November, no further
progress would be made before the end of 2009, after the new European
Parliament and Commission had come into office;
- it might be in the national interest for the
Government to support an agreement on 27 November provided it
could do so without compromising points of fundamental importance
to the UK; and
- the Minister asked the Committee to give him
enough flexibility at the Council meeting to do what he considered
to be in the national interest.
1.7 At our meeting on 26 November, we noted that
a great deal of effort had been put into the negotiations and
that the UK had achieved many of its negotiating objectives. It
would be a pity if all that were to go to waste. But there was
much uncertainty about what the Council would be asked to agree.
So we decided to keep documents (a) to (c) under scrutiny, but
— using the power given to us by paragraph (3)(b) of the
Scrutiny Reserve Resolution of 17 November 1998 — we gave
the Minister discretion to agree to the proposals on the understanding
that he would report back to us fully after the Council meeting
and explain what had happened.
The Minister's letter of 15 December 2008
1.8 In his letter of 15 December, the Minister told
us that:
- on 27 November, the Competitiveness
Council reached agreement on amended texts of documents (a) to
(c), which differ from both the Commission's proposals and the
European Parliament's views at first reading;
- the Government had voted in favour of the amended
texts of the documents (b) and (c);
- but the UK and Sweden had abstained from voting
on the amended text of document (a), the Better Regulation Directive,
because of their concerns about the provisions on radio spectrum
management and trading, functional separation and the independence
of NRAs; and
- the Government hoped to secure acceptable positions
on these points in the forthcoming negotiations in the Council
and with the Commission and the European Parliament.
1.9 It was expected that, in mid-February, the Council
would formally reach Common Positions[2]
on the amended texts agreed by the Council on 27 November; and
that the Commission would issue a Communication identifying the
matters on which there was still disagreement and proposing solutions.
The Common Position texts and the Commission's Communication would
be deposited in Parliament and the Minister would provide an EM
on them.
Documents (d) to (f)
1.10 The Commission issued documents (d) to (f) on
6 November 2008. They set out the Commission's views on the amendments
the European Parliament adopted at its first reading of documents
(a) to (c) in September 2008.
1.11 Documents (d) to (f) were superseded by the
amended texts agreed by the Council on 27 November.
Documents (g) to (i)
1.12 On 16 February 2009, after the juristes linguistes
had prepared revised drafts of the two Directives and the Regulation,
the Council adopted common positions on documents (g), (h) and
(i).
1.13 Document (g) — the amended draft
of the Better Regulation Directive — contains many amendments
intended to clarify or strengthen the provisions of document (a),
the Commission's original draft, without significantly affecting
their substance. But document (g) also contains changes of substance.
For example, document (g):
i) includes new provisions requiring closer cooperation
between the Member States and the Commission in the planning and
coordination of the use of the radio spectrum;
ii) requires spectrum use to comply with, among
other things, the International Telecommunications Union Radio
Regulations; and
iii) includes new provisions making it easier
for NRAs to require operators who have installed facilities (such
as masts or conduits) to share them with other operators.
1.14 Similarly, most of the amendments in document
(h) — "the Citizens' Rights Directive" —
are intended to clarify or strengthen the provisions of document
(b) without significantly changing their substance. But there
are some significant changes. For example, document (h) introduces
both more extensive requirements about the information contracts
should give consumers and provision to enable NRAs to impose minimum
quality of service requirements on operators which provide public
communications networks.
1.15 Document (i) — the GERT Regulation
— replaces document (c), the Commission's proposal
for a Regulation to create a European Electronic Communications
Market Authority. Document (i) provides for the establishment
of the Group of European Regulators in Telecommunications (GERT).
Its function would be to contribute to the development of the
EC's internal market in telecoms by:
- promoting cooperation between
NRAs and between them and the Commission;
- advising the Council, the European Parliament
and the Commission either at their request or on its own initiative;
- if asked, giving opinions on cross-border disputes;
- disseminating good practice; and
- giving opinions on the drafts of the Commission's
decisions, recommendations and guidelines on certain telecoms
matters affecting the NRAs' work.
The members of GERT would be the head or a senior
representative of each NRA. The Commission would have observer
status. GERT would neither be a Community agency nor have a legal
personality.
1.16 GERT would replace the European Regulators Group,
which was set up in 2002 to advise and assist the Commission and
provide an interface between the NRAs and the Commission.[3]
Document (j)
1.17 Document (j) is a Communication by the Commission
on the common positions the Council adopted on documents (g) to
(i) in February. The essence of the Communication is set out in
the "Statement" annexed to it. The Statement begins
by taking note of the common positions and continues as follows:
"The Commission notes in particular that the
Council's Common Position departs substantially from those taken
by the Commission as well as the European Parliament, notably
as regards the internal market mechanisms, in particular for ensuring
consistent regulatory remedies, the additional remedy of functional
separation, spectrum policy, and the establishment of a regulatory
body. As regards the regulatory body, the Commission has particular
concerns that the Council's position raises institutional questions
which constitute a substantial barrier to a satisfactory settlement.
"The Commission also notes that the Council's
Common Position diverges from those of the Commission and European
Parliament on a number of supplementary issues falling under both
proposals for directives amending the regulatory framework. Nonetheless,
the Commission is of the view that the divergences that exist
in relation to the proposed Citizens' Rights Directive are not
of the same magnitude as those relating to the proposed Better
Regulation Directive and to the proposed Regulation setting up
a regulatory body,
"In this context, the Commission wishes to reaffirm
its position as set out in its amended proposals [documents, (d),
(e) and (f)] which represents [sic] a substantial step towards
a converged position of the three institutions."
The Government's view
1.18 In his Explanatory Memorandum of 6 April, the
Minister for Communications, Technology and Broadcasting at the
Department for Business, Enterprise and Regulatory Reform (Lord
Carter of Barnes) tells us that the Government supported the adoption
of the common positions on documents (h) and (i) at the Council
meeting on 16 February 2009 because it had only minor concerns
about the revised texts of the Citizens' Rights Directive and
the GERT Regulation.
1.19 But the Government abstained from voting on
document (g). The Minister tells us that:
"The concerns I had with the Common Position
on the Better Regulation directive — despite some last minute
amendments to address some of my concerns — centred on the
big strategic issues that underpin this negotiation. As indicated
in the initial EM on this dossier, the review presents an opportunity
to build on the existing framework to further improve the competitiveness
of the communications sector. This has increased in importance
since the start of the negotiation as the downturn has taken hold.
We have to see the communications sector as one of the principle
drivers for recovery and any movement away from openness and competition
towards protectionism would have a chilling effect on the recovery.
In this context, the big issues were around how to assure the
delivery of the principles embodied in the framework legislation
and how to ensure we get the greatest benefit from the use of
spectrum (given the move to wireless communications, this is needed
to set the context for a massive economic opportunity). In terms
of delivering the key principles in the legislation, the Common
Position remained, in my view, less than we could agree to at
this time."[4]
1.20 The Framework Directive authorises NRAs to
impose obligations on operators which have "significant market
power" in a market which is not effectively competitive.
The Minister says that:
"We wanted a strong corrective mechanism if
the remedies adopted by the NRAs were not appropriate. The Commission
had proposed that its own power should be extended so that it
may veto such remedies. This was acceptable to us — if appropriately
constrained and justified — but was anathema to the majority
of Member States. This resulted in a Common Position that only
allowed the Commission to issue an opinion … based on expert
advice from the new advisory body [GERT]. Such an opinion would
not be legally binding. We felt strongly that we should be able
to do better than this and had hoped for, at a minimum, a [Commission]
Decision which would impose an obligation on NRAs to comply or
explain publicly why they have not.
"We also wanted NRAs to be able to impose functional
separation on their incumbent operators as this would hold out
the real prospect of market opening. We were the first Member
State to take this route but many Member States were hostile to
this being made more clearly an opportunity for their Regulator
to consider. Consequently, the Common Position text was still
far too constrained in how the remedy might be applied and we
believed there was scope to make this easier for those Member
States who wished to adopt this solution."[5]
1.21 The Minister tells us that the Government was
also unable to support the common position on document (g) because:
- it provided for spectrum management
allocation to be constrained by the International Telecommunications
Union Radio Regulations; and
- it would not ensure that the regulation of investment
is guided by the principles of competition and includes fair access
obligations.
1.22 Since the common positions were adopted, the
negotiations have continued. The Government's aim is to secure
amendments which would overcome its objections to document (g).
In addition, the Government hopes to secure agreement to a new
provision which would include broadband in the universal service
obligation.
1.23 The Minister believes that a "deal"
between the Council, the European Parliament and the Commission
is possible. He says that the position will become clearer after
the European Parliament's Industry, Research and Energy Committee
and its Internal Market and Consumer Protection Committee vote
on the proposals in the week beginning 20 April and before the
European Parliament's second reading vote in the week beginning
4 May. The Council will resume its consideration of the proposals
on 12 June.
Conclusion
1.24 We share the Minister's view about the economic
importance of the telecommunications sector. We also agree that
the aim should be to ensure that the regulatory framework promotes
fair competition and resists protectionism. We support the Government's
efforts to secure amendments to documents (g) to (i) which would
help achieve that aim.
1.25 We clear documents (a) to (f) because they
have been superseded by documents (g) to (i). We also clear document
(j) which is no more than a statement of the Commission's views
on the common positions the Council adopted on 16 February. But
the negotiations on document (g) to (i) continue. We should be
grateful, therefore, if the Minister would provide us with a further
progress report well before the Council's meeting on 12 June.
Meanwhile, we shall keep documents (g) to (i) under scrutiny.
1 See HC 16-vi (2007-08), chapters 1 and 2 (12 December
2007). Back
2
In this context, "a common position" is an agreement
to a text which has been finalised by the jurist linguists prior
to sending the text to the European Parliament for consideration
under the co-decision procedure. Back
3
Decision 2002/627/EC: OJ No. L 200, 30.7.2002, p.38. Back
4
Minister's Explanatory Memorandum of 6 April 2009, paragraph 21. Back
5
Ibid, paragraphs 23 and 24. Back
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