2nd telecoms package [Archived]

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The liberalisation of the European Telecoms in 1998 marked a milestone for the sector and anticipated the opening up of markets worldwide. However, the technological developments pushed the European authorities to carry out a reform of the common rules. The result was the second telecoms package adopted in April 2002.

Background

In 1987 the Commission published a Green Paper on the development of the common market for telecommunications services and equipment as a first step towards the introduction of more competition in the telecommunications market combined with a higher degree of harmonisation. In 1993 Member States reached an agreement to liberalise the sector by 1998. The necessary legislative measures of the Community consisted essentially of a number of directives intended to create a single market for telecommunications services in Europe. On 1 January 1998 telecommunications were in principle liberalised in all countries of the EU.

The technological developments and the increasing convergence of access and communication possibilities pushed the Commission to propose a first review of the Telecoms legislative package. On 12 July 2000 a draft new telecommunications framework was launched. The regulatory framework was adopted on 24 April 2002 and entered in force in July 2003. It consists of five Directives:     

The Directive on competition in the markets for electronic communications services ( 2002/77/EC) is also considered part of the Framework. So are the Decisions on a regulatory framework for radio spectrum policy (676/2002/EC), on the minimum set of leased lines with harmonised characteristics and associated standards (2003/548/EC) and the amended (2004/641/EC) decision establishing the European Regulators Group for Electronic Communications Networks and Services (2002/627/EC). The Recommendation on relevant markets (C(2003)497), though not part of the framework itself, has important effects, because it defines, in a non-binding form, the field of application of the directives. The recommendation does not define the markets it lists in any detail, that is left to National Regulatory Authorities (NRAs).

The 11th Report on the Implementation of the Telecommunications Regulatory Package, published in February 2006, was the first to state that member states have done "most of the necessary work" in implementing the existing framework. Due to delays in implementation in the member states, the framework has seen very little market testing, for which reason the Commission in September 2005 still referred to it as the "New Regulatory Framework". By the end of June 2006, the Commission has received a total of 410 market notifications from member states, with about 100 remaining to be sent in.

Issues

The key aspects of the telecommunications framework relates to:

  • Significant market power (SMP): The definition aligns of SMP in telecommunications to the competition law notion of dominance, raising the threshold for ex ante regulation and focussing more on ex post regulation. 
  • Scope: all electronic communications networks and services in principle fall within the scope of the package, in order to provide consistency of approach across different infrastructures.
  • Market entry (licensing): operators are granted market access under a system of general authorisations, combined with specific rights of use for the assignment of spectrum and numbers, where required.
  • Number Portability: mobile number portability has been introduced as a consumer facility alongside number portability for fixed telephony.
  • Universal Service: the former scope of universal service obligations was maintained; a procedure to review and revise the scope as necessary was introduced.

As compared to the former, much more complicated regulatory framework, ex ante regulation tends to be less detailed for operators without market dominance, in general ex post checks are being favoured. A main reason to propose the framework was to simplify the relevant legislation, bringing the number of Directives from some thirty to just 5. The framework does not make a difference between fixed and mobile telephones, but between dominant and non-dominant players. 

The measures of the telecommunications framework are as follows:


1) The Directive on a common regulatory 
framework for electronic communications networks and services (copy of Directive in [EN] [FR] [DE])


2) The access and interconnection Directive (copy of Directive in [EN] [FR] [DE])

  • Aim or purpose: to provide a pro-competitive and harmonised framework to stimulate competing network infrastructures and interoperability of services. This should ensure that bottlenecks in the market do not constrain the emergence and growth of innovative services that benefit users and consumers. 
  • Main issues covered: 

    • access obligations; 
    • powers and responsibilities of the national regulatory authorities (NRAs) with regard to access and interconnection;
    • non-discrimination and transparency on access issues;
    • price control and cost accounting obligations. 

3) The authorisation of networks and services Directive (copy of Directive in [EN
] [FR] [DE])  

  • Aim or purpose: to simplify administrative controls on market access for operators, which in many Member States is still subject to a complicated administrative procedure.
  • Main issues covered:

    • rights of use for radio frequencies and numbers (see   Decision on spectrum policy group);
    • conditions attached to the general authorisation and to the rights of use for radio frequencies and for numbers, and specific obligations;
    • rights to install facilities and rights of interconnection;
    • harmonised assignment of radio frequencies.
  • Review: With at aview to the ITU Regional Radiocommunication Conference 2006 the Commission announced, in September 2005, three Communications on a new strategy for radio spectrum use in the EU. The third and central communication aims at a radio spectrum management with a more flexible approach concerning transmission technologies and service definitions, which is according to the Commission "an essential condition for achieving the full potential of radio spectrum resources and for keeping pace with technological advances and convergence both of technology platforms and of services."

    The Commission also proposes that, between 2005 and 2010, the exclusive usage rights for parts of the radio spectrum should be made tradable, pointing to independent estimates which indicate that significant net gains (around 8-9 billion euro a year) could be achieved by introducing market mechanisms.


4) The users' rights and universal service Directive (copy of Directive in [EN] [FR] [DE]) 

  • Aim or purpose: sets out the rights of users and consumers in the field of electronic communications networks and services, including the level of universal service.
  • Main issues covered:

    • provision of access at a fixed location and 'must carry' obligation
    • public pay phones, incl. special measures for disabled users;
    • quality of service and financing of universal service obligations;
    • regulatory controls on retail services;
    • regulatory controls on the minimum set of leased lines;
    • carrier selection and carrier pre-selection;
    • interoperability of consumer digital television equipment;
    • operator assistance and directory enquiry services;
    • single European emergency call number;
    • number portability.

5) The Directive on processing of personal data and the protection of 
privacy in the electronic communications sector (copy of Directive in [EN] [FR] [DE])

  • Aim or purpose: updates the current Directive to ensure it is technologically neutral and to extend its scope to all electronic communications networks and services.
  • Main issues covered: 

    • processing of personal data;
    • storage of user information;
    • traffic and location data;
    • unsolicited communications (spam).

6) The Regulation on 
local loop unbundling (copy of Regulation in [EN] [FR] [DE]) 

  • Aim or purpose: will require incumbent operators to provide competitors with full and shared unbundled access to their local copper loops on fair, reasonable and non-discriminatory terms. It will remain though one of the least competitive segments of the liberalised telecommunications market.
  • Main issues covered:   
    • provision of unbundled access;
    • supervision by the national regulatory authority.

7) The Review

 

A statutory requirement in the Framework Directive (Article 25) states that a review of the framework has to commence no later than 25 July 2006. In December 2005 the Commission launched a public consultation on the review of the Telecoms package. The 8-9 June 2006 Telecommunication Council defined the 'Future challenges for the electronic communications regulatory framework'. This paved the way for a new consultation launched by the Commission on 29 June 2006. On the basis of its results, the Commission proposed on 13 November 2007 a new review of Telecoms rules.

Timeline

  • 30 June 1987: The Commission publishes the Green Paper on the 'Development of the common market for Telecommunications services and equipment'. 
  • June 1993: The Council meeting of Telecommunications ministers decides to liberalise the European Telecoms sector by 1998. 
  • 1 January 1998: The European Telecoms sector is officially liberalised.
  • 12 July 2000:  The Commission proposes the first review of the Telecoms rules.
  • 24 April 2002:  The new common Regulatory Framework is adopted.
  • 8-9 June 2006:  The Telecommunication Council defines the 'Future challenges for the electronic communications regulatory framework'.
  • 13 November 2007: Commission publishes its proposal for the second review of the Regulatory Framework. 

Further Reading

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