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On 13 December 2001 the EU Parliament finally
passed a legislative package of four Commission
Proposals. They are part of a wider package
aimed at simplifying and harmonising more than 20 EU Regulations
and Directives affecting the Telecommunications industry into just
six new Directives. The new “Electronic
Communications Directives also contain other measures such as the
goal of seeking (but not mandating) a single technical standard for
Digital Television and enhanced cooperation between National
Regulatory Authorities (NRA’s) on Radio Spectrum to avoid the
vast difference in how EU Member States grant mobile
The new Directives effectively draw together
the already converging Telecommunications, Digital Broadcasting and
Internet industries, from a regulatory point of
view. The agreement of the Commission’s
Proposals will result in the adoption in February 2002 of
Directives relating to:
A common regulatory framework for electronic communications
networks and services (Framework Directive).
Access and interconnection of electronic communications, networks
and associated facilities (Access Directive).
Authorisation of electronic communications networks and services
Universal service and users rights relating to electronic
communications networks and services (Universal Service
The legislative package will eventually
contain the following additional directives dealing with the
A regulatory framework for radio spectrum policy in the European
Community (Radio Spectrum Decision). This Commission Proposal is
currently at Common Position but as it is a
Council Decision it does not need EU Parliamentary
Processing of personal data and the privacy in the electronic
communications sector (Data Protection Directive).
The Data Protection Proposal is currently
still under negotiation and has not yet reached a Common Position
adopted by the Council (i.e. not agreed by the Member
It is understood that the remaining issue to
be settled is the proposed use of either a harmonised opt-in or
opt-out mechanism (register), for Consumers who do not wish to
receive Unsolicited Commercial Electronic Mail (commonly known as
“Spam). The majority of Member States
favour an opt-in mechanism i.e. one in which the Consumer has to
register to receive Unsolicited Commercial
E-mail. The UK has stated that it would prefer
to have an opt-out mechanism i.e. one where the Consumer had to
register not to receive Unsolicited Commercial E-mail.
Although this Proposal will need to achieve
EU Parliamentary approval once it has reached Common Position
adopted by the Council, it is envisaged that that should present
significantly less difficulty than the “Framework Directive,
which has been the major sticking point, between the EU Parliament
and the Member States.
For several months the EU Parliament, with
the support of the telecommunications industry has been pushing
hard for the EU Commission to have executive-style powers of veto
over certain aspects of the decisions of National Regulatory
Authorities (NRAs) in Member Sates, concerning inter
The “significant market power test or “market dominance
i.e. when a Telecommunications Operator has to submit to price
controls and other constraints set by the National Regulator (NRA),
What constitutes a “Relevant Market in determining criteria
for when Telecommunications companies can be considered to be
abusing their market position.
Member States have been vehemently arguing
that National Regulators (NRA’s) are in the best position to
determine when a telecommunications company is harming
After months of wrangling and with the
deadline of 31 December 2001 approaching, the Member States
submitted a compromise proposal allowing the EU Commission the
final say in the above two areas.
Instead of NRA’s applying sector
specific competition rules tailored to the telecommunications
industry and mainly affecting incumbent operators, i.e. those
deemed to hold “significant market power, e.g. in the UK,
fixed line operators such as BT and mobile operators such as BT
Cellnet (now mm02) and Vodafone, the Commission will henceforth
have the final say on whether any Company is abusing it’s
market position and it will base its decision on existing EU
competition law which uses the concept of “Market
Dominance(Articles 81 and 82 EU Treaty). The Commission will
effectively deal with appeals or complaints from Companies against
the decisions of NRA’s in respect of those
The Commission is expected to publish a set
of guidelines for NRA’s (following Public Consultation) on
when and how NRA’s should apply this “Market Dominance
The Commission will have no powers over
allocation of Radio Frequency licenses.
Article 6 of the “Framework
The new powers given to the EU Commission
arise as a result of a new consultation and transparency mechanism
introduced within the Framework Directive (Article 6).
Article 6 will apply to all decisions of the
NRA’s that deal with the determination of significant market
power, imposition of access obligations, market analysis procedures
and the determination of the existence of effective competition
within the market place.
Article 6 together with Articles 13
(Undertaking with significant market power), Article 14 (Market
analysis procedure) and Article 23 (High Level Communications
Group) have proven to be the most contentious of all
It has been alleged that Article 6 not only
constitutes an imbalance in the institutional arrangements set
forth by the EU Treaty, but also that it goes far beyond the scope
of any existing transparency mechanism in other Directives (e.g.
Directive 2000/31 on E commerce and Directive 2000/12 on the taking
up and pursuit of business credit institutions).
The Commission according to the EU Treaty is
not entitled to decide on the interpretation of EU Legislation. It
should monitor compliance with that legislation and leave the
European Court of Justice to interpret the legal provisions and
decide whether a violation of EU Law has occurred.
The application of the Transparency mechanism
under Article 3 of the E Commerce Directive, where it is the
intention of a Member State to adopt measures which would restrict
the free movement of information society services, only includes a
“petition (by another Member State) of the Commission to stop
the measure. It explicitly recognises the right of a Member State
to adopt the measure, which is a clear indication that there is no
recognition of a priori veto powers of the
The Commission would have to use the Article
226 procedure and ultimately obtain judgement in the European Court
of Justice should it consider that the measure in question is a
violation of Community Law.
Furthermore the E Commerce Directive refers
to measures adopted by Member States.
Article 6 of the Framework Directive is
applicable to measures of NRA’s. This means that the
Commission would intend to control implementation measures to be
adopted by the NRA’s, in application of national
Likewise the Cooperation (Transparency)
mechanism between Member States (the host and home States)
contained in the Business Credit Institutions Directive takes place
only between authorities in the host and home States. The
Commission is not normally involved and only intervenes in a case
where procedures for cooperation between the affected States have
not taken place due to reasons of emergency.
Furthermore the Directive specifically states
that in the case of a disagreement, the appeal against a decision
to adopt a measure by the Host Member State shall be subject to the
courts in the Host Member State. This clearly recognises the lack
of veto Powers of the Commission.
For further information please contact David
Roberts by telephone on +44(0)20 7367 3678 or by e-mail at email@example.com;
or contact Richard Eccles by telephone on +44(0)20 7367 3996 or by
e-mail at firstname.lastname@example.org.