Progress made on EC telecoms legislation

On 4 April the Telecoms Council reached political agreement on the three major Directives: Framework, Access and Interconnection and Authorisation.

This represents a major step forward in the overall negotiations of the new EU telecoms legislative package which should pave the way towards a common position at the next Telecoms Council on 27 June, once negotiations of the rest of the package have been completed.

On the Framework Directive, Member States unanimously reached agreement against the Commission. The most contentious articles, Articles 6 and 13, which deal with the role of the Commission in vetting NRA decisions and with establishing the threshold for regulatory intervention respectively, generated heated debate.

On Article 13 (Definition of Significant Market Power) the Commission accepted the point made by numerous delegations, including the UK, that although the definition of single dominance was acceptable, there was a need for further clarity on the issue of joint dominance. It put forward a revised text following draft Guidelines it had produced based on market analysis (see below) which all Member States accepted.

However, Article 6 (Consultancy and Transparency), which as originally proposed had given the Commission the power to amend and reject NRA decisions, proved a harder battle.

While supporting the aim of ensuring a more harmonised approach to regulation, Member States considered that the Commission’s proposal jeopardised the ability of NRAs to act swiftly to address competition concerns within in local markets.

Instead they unanimously supported a compromise that would permit the Commission to delay an NRA decision by one month if they had serious doubts as to its compatibility with Community Law, and to publish a critical opinion in those circumstances.

Many Member States also opposed a suggestion by the Commission that rules relating to the allocation and assignment of spectrum should be brought within the scope of Article 6. These two issues ultimately lay behind the Commission's opposition to the Framework Directive as a whole.

Both the Commission and Member States supported the Directives on Access and Interconnection and on Authorisation, with discussion focussing on the timescale for Member States to bring national regimes into line with the new EU Framework. Member States agreed on a deadline of 15 months.

They also agreed that national authorisation schemes should be brought into line on the same date, rather than several months later, as many had previously advocated.

Since April the Council Working Group has been looking again at the Universal Service Directive and will negotiate the Communications Data Protection Directive with a view to reaching common position on all Directives at the June Telecoms Council.

The Council text will then be considered for a second reading by the European Parliament whose report will then be reviewed by the Council. If there is still disagreement between institutions, they will enter into the conciliation procedure. These various stages in the negotiation process mean that the package is likely to be agreed around spring 2002 with national regimes being brought into line by summer 2003.

The overall outcome of negotiations has been positive and much progress has been made under the Swedish Presidency. Oftel has been very active in the development of the UK's position on the draft legislative package and has worked closely with all market players to ensure that their views were taken into account at the various stages of the negotiations.

Commission guidelines on SMP

They Commission’s long-awaited Guidelines on market analysis and the calculation of significant market power, which set out the principles for use by NRAs in analysing effective competition, were published on 7 March.

The Guidelines, issued under Article 14 of the draft Framework Directive, are for NRAs to use when determining whether an operator or operators have significant market power (SMP) as defined in Article 13 of the Directive.

Operators designated as having SMP may be subject to obligations under other Directives in the regulatory package.

The draft Guidelines are based on the relevant jurisprudence of the Court of First Instance and the Court of Justice as well as on the Commission's own decision-making practice in defining the relevant market and applying the concept of single and collective dominant position.

The draft Guidelines are available at http://europa.eu.int/ispo/infosoc/telecompolicy

IRG developments

IRG has published working papers on the Definition of Relevant Markets and on the List of Candidate Markets.

The decision to publish was taken at a Special Plenary meeting in Brussels on 19 February after the papers were drafted by the SMP Working Group. The papers have been sent to the Commission for information and consideration in the context of the development of guidance for the new framework.

This move is part of IRG's overall commitment to develop guidance and common understanding to complement European legislation.

The general feedback from the Commission was that the papers were regarded as being of very high quality and that they had given a useful indication that NRAs could adopt and use economic concepts and approaches that they had not had to apply in the existing framework.

IRG's activities are becoming more transparent with the publication of these papers, which have been a welcome contribution to the overall process of harmonisation of regulatory practice across the EU.

Over the next couple of months, IRG will be drafting additional complementary guidance in the form of Principles of Implementation and Best Practice in areas where harmonisation of regulatory practice will benefit the functioning of the single European telecommunications market.

For further information on international stories contact Karine Oliver (tel: 020 7634 8763 / e-mail: karine.oliver@oftel.gov.uk).