C(2013)5761

C(2009)3359

SEC(2009)0599
EUR-Lex

SEC(2009)0600
EUR-Lex

C(2008)5925

This Communication reports on the results of Commission’s Review of the regulatory framework for electronic communications and explains the main policy changes proposed by the Commission.

The EU regulatory framework for telecommunications was created in the 1990s in order to open up national markets to competition, markets which, until then, where dominated by state-owned monopolies. This process culminated in the liberalisation of national markets in 1998. A further step was taken in 2002 with the adoption of the current set of rules, which take account of the convergence of technologies and apply to all forms of electronic communications.

In 2006 and 2007, the Commission reviewed the functioning of the EU framework in against its main objectives, which are to promote competition, to consolidate the internal market and to promote the interests of the citizen. In the light of technological and market developments, especially improved competition in some areas, but also continued dominance by one or a few operators on a number of key markets as well as a continued lack of a single market for electronic communications and increasing divergence of regulatory approaches in the enlarged EU, a substantial reform of the regulatory framework is considered necessary by the Commission.

The 2007 Reform Proposals of the Commission can be grouped under the three pillars of better regulation, completing the single market and connecting with citizens.

1) Better regulation for competitive electronic communications: the 2007 Reform Proposals first of all aim to simplify and improve the quality of the regulatory environment, by reducing ex-ante regulation where market developments allow and by simplifying the market review procedure. The Commission also recommends better regulation of radio spectrum by simplifying access to and use of this scarce resource and moving to a more market-oriented allocation of spectrum. The Commission’s legislative proposals strengthen the principles of technology and service neutrality, and create a mechanism to designate certain bands where, across the EU, rights acquired to use spectrum are allowed to be traded (secondary trading). Regulatory provisions to encourage licence-free spectrum use and to reinforce the coordination of conditions for spectrum authorisations are also proposed.

2) The Single Market for electronic communications: Europe does not yet have a single market for electronic communications networks or services. Implementation of the EU rules via 27 separate national regulatory systems has resulted in two major drawbacks: the artificial segmentation of markets on a national basis and a fundamental lack of consistency in the way the EU rules are applied. In order to address this lack of a single market, the Commission proposes the establishment of an independent European Electronic Communications Market Authority, which will build on the combined expertise of NRAs and improve the existing coordination mechanisms. At the same time, it is proposed to strengthen the independence and enforcement powers of national authorities, which will contribute to the effective and speedy implementation of the regulatory framework.

3) Connecting with citizens: In a rapidly changing market environment, new measures are needed in order to preserve and enhance consumer protection and user rights and ensure that consumers can reap the full benefits of a dynamic and increasingly borderless communications market. The Commission’s proposals aim, in particular, to: 1) improve the transparency of information from service providers to consumers, including information on supply conditions and on tariffs; 2) set a time limit of one working day for ‘porting’ (transferring) a telephone number following a change of fixed or mobile operator; 3) enhance the implementation of ‘112’ emergency services in the EU, in particular by ensuring more efficient access to caller location information; 4) enable NRAs to impose minimum requirements for the quality of services based on standards drawn up at Community level. The Reform Proposals will also ensure that users with disabilities, elderly users and people with special needs are not prevented from using and accessing eCommunications services.

The Commission believes that the 2007 Reform Proposals should become law before the end of 2009.

COM(2007)0696
EUR-Lex

The Commission present its 2 nd report on market reviews in electronic communications under the EU Regulatory Framework (2nd report). The Communication gives an insight into the experience gained from the market review process and highlights some major trends and issues. It contributes to the review of the regulatory framework that the Commission will propose to the Council and the European Parliament in the second half of 2007.

The Commission reports that almost all NRAs have finalised the first round of market reviews of the 18 markets included in the Recommendation on relevant markets, with the exception of the NRAs in Bulgaria and Romania that joined the EU only on 1 January 2007. The EU consultation mechanism established under Article 7 of the Framework Directive has been instrumental in the promotion of competition, investment and innovation as well as for the consolidation of the internal market for electronic communications. It has ensured a consistent approach, in particular regarding market definition and SMP analysis across Europe, brought sound economic analysis to the market review process and resulted in increased transparency. Overall, this form of cooperation between the Commission and NRAs led to better regulation based on competition principles and contributed to the development of a common European regulatory culture.

Although the regulatory approaches for market definition and market power analysis have converged to a large extent , remedies are not always appropriate to resolve the identified competition problems and sometimes differ markedly amongst Member States in spite of similar market situations . Regarding the choice of remedies, the Commission observes less consistency across the EU than has been achieved in market definition and SMP analysis. Differences in remedies were not always justified by diverging market conditions or other notified specificities. In addition, not always the most efficient remedy was chosen. The Commission points to the following:

- remedies imposed in the retail access markets vary substantially across Member States. Such differences are not always justified by diverging market circumstances;

- in the fixed and mobile termination markets, the Commission emphasised the need to move, in principle, towards symmetric termination rates based on costs of an efficient operator and encouraged NRAs to lower rates accordingly, in particular for mobile termination. As the diverging approaches across Member States have a negative effect of on the internal market, the Commission invited NRAs to work closely with the European Regulators Group (ERG) to arrive at a coherent EU-wide approach on cost calculation and on enhancing symmetry;

- sometimes the belated application of remedies in the wholesale broadband access markets impaired the effectiveness of regulation. In several cases, the points in the network at which bitstream access had to be granted were either not specified or insufficient to enable the development of competition. Price regulation was not always effective and based on different price setting methods across the EU;

Further steps need to be taken to enhance the effectiveness of regulation and to achieve greater consistency in the selection and application of remedies.

The Commission will strive to further streamline procedures and to minimise the administrative burden for market players and NRAs, in line with the Commission's strategy for better regulation. It will make corresponding proposals in the context of the review of the regulatory framework. In addition, the Commission invites Member States to contribute to the streamlining of the market review process at the national level. In particular, NRAs should avoid

- delays between the notification of draft measures and the adoption of final measures, and

- notifying market analysis and intended remedies in different steps.

The Commission is currently reviewing the regulatory framework for e-communications and its proposal will be put forward to the Council and the Parliament in the second half of 2007. The revised regulatory framework however is not expected to enter into force before 2009-2010. In the short term the Commission is reviewing the Recommendation on relevant markets and the Article 7 procedural Recommendation and the new versions of the texts will be adopted in the second half of 2007.

COM(2007)0401
EUR-Lex

SEC(2007)0962
EUR-Lex

SEC(2006)0817
EUR-Lex

This Communication reports on the functioning of the five directives of the regulatory framework for electronic communications networks and services, as required by these directives. (Please see Directives 2002/19/EC, 2002/20/EC, 2002/21/EC, 2002/22/EC and 2002/58/EC.) The Communication also launches a public consultation on the future of the electronic communications regulatory framework on which comments are requested by 27 October 2006. It explains how the framework has delivered on its objectives, and identifies areas for change.

Assessment of the framework: c onsumers and industry groups supported the framework’s approach, albeit with criticisms concerning its implementation. New entrants, cable operators, ISPs and software and equipment producers noted that the framework had allowed the development of competition and innovation across Europe, facilitating investment and broadband penetration. However, the majority of incumbents considered that ex-ante regulation hindered new investment and should be phased out by 2015. In addition, there is room for significant improvement in the way that spectrum is managed. Specifically, the Commission considers that more effective management of spectrum would release its full potential to contribute to offering diverse and affordable services to the European citizen and to strengthen the competitiveness of European ICT industries. In other respects, the Commission considers that the principles and flexible tools in the regulatory framework offer the most appropriate means of encouraging investment, innovation and market development. There is nevertheless room for the Commission and NRAs to provide guidance on how the rules should be applied, so as to increase predictability for stakeholders.

Changes proposed overall:

The current regulatory framework has produced considerable benefits, but it needs attention in a number of areas in order to remain effective for the coming decade. The two main areas for change are:

- application to electronic communications of the Commission’s policy approach on spectrum management, as set out in the Communication of September 2005;

- reduction of the procedural burden associated with the reviews of markets susceptible to ex-ante regulation.

In addition to these two, the Communication identifies other changes that seek to:

- consolidate the single market,

- strengthen consumers and user interests,

-improve security and

- remove outdated provisions.

Improved approach to managing spectrum for electronic communications: a new system for spectrum management is needed that permits different models of spectrum licensing (the traditional administrative, unlicensed and new marked-based approaches) to coexist so as to promote economic and technical efficiency in the use of this valuable resource. Based on common EU rules, greater flexibility in spectrum management could be introduced by strengthening the use of general authorisations whenever possible. When not possible, owners of spectrum usage rights should not be unduly constrained but subject to certain safeguards, have the freedom to provide any type of electronic communications service (‘service neutrality’) using any technology or standard under common conditions (‘technological neutrality’). Using criteria based on economic efficiency, selected bands agreed at EU level via a committee procedure would become available for use under general authorisations, or subject to secondary trading across the EU. Common authorisation conditions for the use of the radio spectrum would also be enacted with this procedure in appropriate cases. The administrative model will remain important especially where, on balance, legal certainty and interference management issues are priorities and where public interest objectives are at stake.

Streamlining market reviews: the Commission has reported on its experience with the ‘Article 7’ procedure and concluded that the procedure represents an important step towards the creation of an internal market for electronic communications. As a follow-up, this Communication proposes to reduce the administrative burden of the market review procedure by simplifying the notification requirements for certain draft national measures, given that by the time such changes are fully implemented, the NRAs will have considerably more experience with the process. Regulators would still need to conduct market reviews and undertake national and European consultations, but for certain market analyses and notifications the current level of detail would no longer be required. In a number of predefined categories of cases, a simplified notification procedure would be introduced. This would allow the Commission and the NRAs to focus on cases where substantial problems may arise. In the short term, it is proposed to issue a revised version of the procedural Recommendation in order to initiate the simplified notification procedures from 2007, and in the longer term, to modify the framework to allow all procedural elements to be gathered together into a single Regulation.

Consolidating the Internal Market: the Commission discusses proposals for the following:

- extending Commission veto powers to cover proposed remedies under the Article 7 procedure;

- tackling the problem of routine suspension of regulatory decisions by some national courts during the appeal period by laying down EU level criteria for granting suspension of regulatory decisions;

- for services with a pan-European or an internal market dimension, a Community procedure is proposed, in order to reach EU-level agreement on common usage conditions as well as on common approaches to authorisation, to allow for co-ordinated deployment of services;

- other changes designed to strengthen the internal market aim to: ensure that users can access information society services provided in other Member States (e.g. freephone numbers); strengthen the ability of NRAs to sanction a breach of regulatory obligations; extend the scope of the technical implementing measures that the Commission can take, e.g. in areas like numbering; introduce a mechanism for Commission approval of measures taken by NRAs under Article 5(1) of the Access and Interconnection Directive; require ‘must carry’ obligations to be reviewed by a specific deadline; and establish a procedure to facilitate agreement at EU level on common requirements on networks and services.

Strengthening consumers’ and users’ rights: the Commission intends to publish a Green Paper on universal service in 2007, to launch a wide ranging debate.

Improving Security: i n order to reinforce the confidence of users in electronic communications, a series of measures is proposed: 1) to impose specific requirements on providers of electronic communications to notify certain breaches of security and to keep users informed; 2) to authorise competent national authorities to require specific security measures that implement Commission recommendations or decisions; and 3) to modernise the provisions on network integrity.

Better regulation: i t is proposed to withdraw a number of redundant or outdated provisions.

COM(2006)0334
EUR-Lex

The regulatory framework set up in 2002 on provisions for electronic communications was innovative in that it replaced a more mechanistic approach to regulation with that of an economic approach where regulations are based on competition law principles. Under this system, national regulators or “NRAs” are expected to conduct “market reviews” in order to determine whether a particular market should be regulated. In cases where an undertaking appears to be in a dominant position (here referred to as SMP) NRAs must impose appropriate regulation. Conversely, regulation must not be imposed or existing regulation withdrawn, where no undertaking is found to have SMP. The market review system is subject to Commission scrutiny.

The purpose, therefore, of this Communication is to assess the functioning of the Community consultation mechanism for electronic communications and to assess the experience gained so far on its application. The Commission notes that the consultation mechanism under Article 7 has given the Commission a deep insight into developments on e-communication markets access in the EU. The conclusions set out in the Communication are a first assessment of the procedures and act as an input for the forthcoming review of the regulatory framework, including the Commission’s Recommendation on relevant markets, in 2006.

Having thoroughly assessed the situation to date, the Report notes that the market review process, including the Article 7 consultation mechanism, has led to more consistent regulation and therefore represents an important step towards the creation of an internal market for electronic communications. The development of a “joint European regulatory culture” is significant in that all NRAs are expected to follow a common methodological approach, based on EC competition law principles. In spite of some initial investment in terms of analytical and organisational capacities, the new regulatory system has led to an approximation of regulatory approaches and thereby helped to pave the way towards an internal market for electronic communications. It has also ensured that all regulators base their decisions on sound economic considerations and that what regulation there is is kept to a minimum. To conclude, the Commission considers that the system of market reviews establishes a regulatory framework which, on balance, has proved to be a success.

In its next review, the Commission will look for ways to decrease the administrative burden on companies and NRAs and to streamline procedures even further. As such the Commission has launched a call for input on the review of the regulatory framework, which also covers the market review procedures.

COM(2006)0028
EUR-Lex

The purpose of this Communication is, in accordance with Article 18 of the Framework Directive, to review the inter-operability of digital interactive television services. The review builds on earlier assessments and takes account of the market developments since July 2004. In addition it takes account of the “MHP” Implementation Group which was formed in order to act as a forum for the exchange of ideas and best practice.

The Commission states that its present priority is to work closely with the Member States in order to guarantee the successful switchover to digital T.V. – a prerequisite for having interactive digital services. A further priority is to support open standards and the on-going co-operation on inter-operability and exchange of best practice between Member States and between stakeholders. On the question of mandating a common standard, however, the Commission’s approach remains that of relying on industry-led voluntary standardisation initiatives. Such a position will ensure that innovation is not stifled. In future, the Commission’s priorities will be to:

- Work with the Member States to ensure the successful switchover to digital T.V. In other words to act as a facilitator for interactive digital services.

- Promote open standards and interoperability.

- Support co-operation between the Member States and amongst the stakeholders.

- Promote international co-operation on digital TV open standards and interoperability.

- Monitor the use of proprietary technologies.

COM(2006)0037
EUR-Lex

This Communication sets out the Commission's position on interoperability of digital interactive television services pursuant to Art. 18 (3) of Directive 2002/21/EC on a common regulatory framework for electronic communications networks and services (the Framework directive).

Article 18 (3) of the Framework directive requires the Commission to examine the effects of Art. 18, concerning interactive television services. If interoperability and freedom of choice for users have not been adequately achieved in one or more Member States, the Commission may act with the aim of making certain standards mandatory.

This Communication is based on the results of a public consultation launched in March 2004.

A wide range of players responded to the consultation, notably manufacturers, network operators, broadcasters and API providers; also consumer associations and others dedicated to particular viewpoints. Responses to the public consultation paint a conflicting picture as to whether adequate interoperability has been effectively achieved. The Commission considers that in view of the complexity of the technological and market environment, the very different perceptions of interoperability held by market players, and late implementation of the Framework Directive in many Member States, the aim of the review is essentially to determine whether there is a case to propose making one or more standards mandatory.

The Commission concludes that there is no clear case for mandating standards at present; the issue should be reviewed in 2005. Meanwhile, a range of promotional actions are proposed to promote the deployment of interactive digital services using the Multimedia Home Platform (MHP) standard, currently the only open standard for APIs adopted by EU standards bodies. These include the creation of a Member State group on MHP implementation, confirmation that Member States can offer consumer subsidies for interactive television receiver equipment, subject to conformity with state aid rules, and monitoring of access to proprietary technologies.

Lastly, the Commission seeks to ensure that European citizens benefit from a growing range of interactive DTV services, available on an increasing number of transmission platforms, and considers that the market is best served at the present time by continuing to apply the provisions already agreed by the European Parliament and the Council in the Framework Directive.

COM(2004)0541
EUR-Lex

COMISSION’S IMPACT ASSESSMENT

1- PROBLEM IDENTIFICATION

In December 2003, around 25 million of the 32 million digital receivers in the EU15 included API (application program interface) functionality. There are five different API systems and they are not interoperable at terminal level. Given that the majority of the receivers use proprietary APIs, the key question is whether one or more standards should be mandated – or other measures adopted – in order to improve interoperability for I-TV services in the EU.

For more information regarding the context of interactive television (I-TV), please refer to the summary of COM(2004) 0541 on interoperability of digital interactive television services.

1.1 - Risks

Both action (to mandate standards) and inaction (maintaining the status quo) carry a degree of risk and no consensus has emerged among market players and policy makers as to which approach entails the most risk.

1.2- Who is affected? What are the underlying motive forces?

The imposition of API standards for interactive digital TV would affect broadcasters, network operators, equipment manufacturers, software companies and viewers. Within these categories, however, there are sub-categories which may have differing views:

- Pay TV operators (satellite and cable) have made substantial investments in network equipment and set-top boxes (STBs), based on proprietary technologies; they seek to protect their investment and maintain their commercial freedom;

- Free-to-air broadcasters seek to have their interactive content available on different delivery platforms and seek a migration from proprietary standards to open standards;

- Providers of first generation proprietary APIs are concerned that any imposition of open standards would force them either to incur costs in changing their systems, or to quit the market;

- Some manufacturers of set-top boxes and television receiver equipment seek the economies of scale that a single standard could provide;

- Interactive application and content providers face lower cost with a single API standard. Open standards offer more predictability than proprietary standards.

2- OBJECTIVES

The ‘Framework’ Directive 2002/21/EC lays down a common regulatory framework for electronic communications networks and services. In this context, the Commission’s objective is to ensure that European citizens benefit from a growing range of I-TV services available on an increasing number of transmission platforms. The use of proprietary technologies will need to be kept under competition law review.

3- POLICY OPTIONS AND IMPACTS

3.1- Option 1: The Commission imposes mandatory implementation of one or more open standards at European level.

3.1.1- Option 1a: The Commission imposes mandatory implementation of one API standard at European level.

Economic impact : it would provide hardware manufacturers, application developers, broadcasters and, in some cases, platform operators with legal certainty concerning technological decisions which, in turn, could lead to further investment in equipment production and development of services and help achieve economies of scale for MHP. However, the installed base of more than 25 million set top boxes incompatible with MHP implies an important economic cost – with a negative impact on platform operators using proprietary systems and possibly also for their customers.

Social impact : positive by reducing political concerns regarding media pluralism and cultural diversity.

Environmental impact : the mandatory replacement of some or all of the 25 million set top boxes (STBs) already in use would present a disposal problem.

Overall, although this option presents certain positive social and economic impacts, it could block technological progress.

3.1.2- Option 1b: The Commission requires implementation of one of a range of APIs that has been standardised by a European standards body.

Economic impact : The anticipated economies of scale in this option are expected to be lower, as there is a greater range of products.

S ocial impact : the obligatory use of open standards does not guarantee consumers can receive all content.

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SEC(2004)1028
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COM(2003)0715
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OJ L 190 30.07.2003, p. 0013-0018
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Directive 2002/21
OJ L 108 24.04.2002, p. 0033-0050

COM(2002)0078
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T5-0676/2001
OJ C 177 25.07.2002, p. 0082-0152 E

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OJ C 270 25.09.2001, p. 0199 E
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OJ C 277 01.10.2001, p. 0017-0091

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