13 European regulatory framework for
electronic communications and services
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(30469)
16496/1/08
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(b)
(30470)
16497/1/08
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(c)
(30471)
16498/1/08
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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 network, 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)
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| Legal base | (a) to (c) Article 95 EC; co-decision: QMV
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| Department | Business, Enterprise and Regulatory Reform
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| Basis of consideration | Minister's letter 15 May 2009
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| Previous Committee Report | HC 19-xiv (2008-09), chapter 1 (22 April 2009)
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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 (c) Cleared
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Background
13.1 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.
13.2 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).
Scrutiny of the Commission's original proposals
for reform
13.3 In 2006 and 2007, the Commission reviewed this
framework, concluded that it needed substantial reform and proposed
two Directives and a Regulation to amend the 2002 legislation
so as to 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 inconsistencies in the decisions of the NRAs; improve
consumers' rights; and strengthen the security of networks and
the privacy of personal information.
- In December 2007, the Government
told us that it welcomed some of the Commission's proposals but
had reservations about others. [49]
In November 2008, after long and difficult negotiations, the Council
reached agreement on substantial revisions to the Commission's
proposals. 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 voted
in favour of two of the amended texts but had abstained from voting
on the draft Directive to amend the Framework, Access and Authorisation
Directives of 2002 because it was not content with some of its
provisions.
Previous scrutiny of documents (a) to (c)
13.4 On 16 February 2009 the Council adopted Common
Positions[50] on documents
(a) to (c), the three revised texts agreed by the Council in November.
13.5 Document (a) is the revised text of
the Commission's proposal for a Directive to amend the Framework,
Access and Authorisation Directives. The main differences between
the Commission's original draft and document (a) are that the
latter introduces:
i) requirements for closer cooperation between
the Member States and the Commission in the planning and coordination
of the use of the radio spectrum;
ii) a requirement for spectrum use to comply
with the International Telecommunications Union Radio Regulations
(ITUR); and
iii) provisions making it easier for NRAs to
require operators who have installed facilities (such as masts
or conduits) to share them with other operators.
13.6 Document (b) is a revised text of the Commission's
proposal for a Directive to amend the Universal Service and Privacy
Directives of 2002. It introduces additional requirements about
the information contracts with consumers should contain and provision
to enable NRAs to impose minimum quality of service requirements
on operators which provide public communications networks.
13.7 Document (c) replaces the Commission's original
proposal for a Regulation to create a European Electronic Communications
Market Authority with the draft of a Regulation to establish the
Group of European Regulators in Telecommunications (GERT). The
Group's 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 heads or a senior
representatives of the NRAs. The Commission would have observer
status. GERT would neither be a Community agency nor have a legal
personality.
13.8 In his Explanatory Memorandum of 6 April, the
Minister told us that the Government had supported the adoption
of the Common Positions on documents (b) and (c) at the Council
meeting on 16 February 2009. But it had abstained from voting
on document (a) because:
- the Government was concerned
about the removal of the provision in the original draft which
would have given the Commission power to veto the remedy adopted
by an NRA if it were not appropriate (the Framework Directive
of 2002 authorises NRAs to impose obligations —remedies
— on operators which have significant market power in a
market which is not effectively competitive);
- document (a) constrained the ability of NRAs
to impose functional separation on incumbent operators; [51]
and
- it also provided for spectrum management allocation
to be constrained by the ITUR.
13.9 The Minister told us that the negotiations were
continuing and that the Government's aim was to secure amendments
which would overcome its objections to document (a). In addition,
the Government hoped to secure agreement to a new provision which
would include broadband in the universal service obligation. The
Council was due to resume its consideration of the proposals at
its meeting on 12 June.
13.10 When we considered documents (a) to (c) in
April,[52] we supported
the Government's efforts to secure amendments to the documents
which would promote fair competition and resist protectionism.
We asked the Minister to provide us with a further progress report
well before the Council's meeting on 12 June. Meanwhile, we kept
documents (a) to (c) under scrutiny.
The Minister's letter of 15 May 2009
13.11 The Minister's letter of 15 May reports good
progress in finding acceptable solutions to the difficulties to
which he had referred in previous letters and tells us of a new
stumbling block to an agreement between the Council and the European
Parliament.
13.12 The Minister tells us, in particular, that
the Government has succeeded in negotiating amendments:
- to require Member States merely
to "respect" the International Telecommunications Union
Regulations rather than be constrained by them;
- to ensure that the new legislative framework
reflects the need for investors in new generation access networks
to earn a return which is proportionate to the higher risks of
the investment and for the framework to be guided by competition
principles and to provide fair access;
- to change the name of the proposed Group of European
Regulators of Telecommunications (GERT) to the Body of European
Regulators for Electronic Communications (BEREC) and — in
response to pressure from the Commission — to make BEREC's
secretariat a Community body;
- while the Government supported the original proposal
to give the Commission power, in certain circumstances, to veto
remedies awarded by the NRAs, many Member States were opposed
to it. It is now proposed that the Commission should be authorized
only to make a Recommendation to an NRA. The Minister says: "Whilst
this does not over-ride any remedy nor have any legal effect,
it does introduce a requirement for the NRA to respond to the
Recommendation justifying its actions, as well as the extra potential
benefit gained from the collective scrutiny of NRAs acting as
BEREC. This should result in sufficient peer pressure to ensure
consistent and effective market remedies to be put in place and
I am content that this latest agreement meets [the Government's]
negotiating objectives in this matter."
13.13 Moreover, the Government succeeded in obtaining
agreement to the addition of a new provision to include broadband
in the universal service obligation.
13.14 At the beginning of May, the European Parliament
gave a second reading to documents (a) to (c). It voted in favour
of all three by large majorities. It also voted in favour of an
amendment which the Minister explains as follows:
"this amendment was first introduced by MEPs
during the First Reading and was regarded as a political reaction
to a piece of national legislation introduced by France, dealing
with piracy and breaches of copyright. The legislation introduced
a 'three strikes and you're out' principle whereby consumers could
have their internet connection suspended by Internet Service Providers
(ISPs) if they breached copyright legislation on three occasions.
Amendment 138 sought to introduce a requirement for a legal hearing
to take place following the third 'strike' and before disconnection
could take place. This amendment was removed by Council during
ensuing discussion and when reaching the Common Position …
Despite clear indications from several Member States that the
inclusion of the text of Amendment 138 in the Second Reading was
unacceptable (with France, Finland and UK indicating their disquiet)
the [European Parliament] voted in favour of Amendment 138 being
re-inserted in the text."
13.15 The Minister tells us that the European Parliament's
action has the following consequences, all which are contrary
to the achievement of the UK's objectives:
- "The inclusion of a direct
reference to the Charter of Fundamental Rights of the European
Union in the Articles of the Framework directive, and indeed any
piece of European legislation, is a long established UK 'red line'
… ;
- If implemented, this amendment will create the
requirement for a legal hearing for every such case, thus creating
an unwieldy and potentially protracted and costly legislative
process, as well as tie the hands of other Member States who may
also wish to introduce similar legislation;
- The amendment creates new concepts relating to
'Internet rights' which are undefined and places them on a par
with those rights already enshrined in the Charter. Their creation
could result in a whole series of legal cases that seek to determine
if such rights exist, what they are, their limits and ramifications
— all of which creates a large corpus of legal uncertainty;
and
- There are a number of other issues impacted upon
by the creation of 'Internet rights' and include issues relating
to Net Neutrality and traffic management; this amendment may make
decisions related to such activities liable to legal challenge
by users."
13.16 The Minister also tells` us that, at the meeting
of the Committee of Permanent Representatives on 13 May, there
was an overwhelming majority in favour of moving documents (a)
to (c) straight to Conciliation stage in September 2009.
Conclusion
13.17 We are grateful to the Minister for his
comprehensive progress report on the negotiations. We note the
Government's success in securing changes to the documents which
meet its negotiating objectives. We understand why the Government
is opposed to Amendment 138. In our view, the proposal is objectionable
because it is inappropriate to include such a provision in framework
legislation and because of its reference to the Charter of Fundamental
Rights; the Charter is not legally binding, whereas Article 6(2)
of the EU Treaty expressly requires the EU to respect fundamental
rights as guaranteed by the European Convention on Human Rights.
On the understanding that the Government will continue to resist
Amendment 138, we clear documents (a) to (c) from scrutiny .
49 See HC 16-vi (2007-08), chapters 1 and 2 (12 December
2007). Back
50
In this context, a "common position" is an agreement
to a text which has been finalised by the jurist linguists before
sending the text to the European Parliament for consideration
under the co-decision procedure. Back
51
"Functional separation" means requiring an incumbent
operator to put the management of a local access network into
an independent company within the parent company and allowing
other operators fair access to the network. Back
52
See HC 19-xiv (2008-09), chapter 1 (22 April 2009) Back
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