Explanatory Memorandum to COM(2007)697 - Amendment of 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 services, and 2002/20/EC on the authorisation of electronic communications networks and services - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2007)697 - Amendment of Directives 2002/21/EC on a common regulatory framework for electronic communications networks and services, ... |
|---|---|
| source | COM(2007)697  |
| date | 13-11-2007 |
- Grounds for and objectives of the proposal
To enhance investment, innovation and consumer benefits in electronic communications, Europe needs a coherent regulatory framework for the digital economy that is future-proof, market-oriented, and exploits the advantages brought by the completion of the internal market.
The present proposal is one of three reform proposals to amend the current regulatory framework. This first legislative reform proposal covers changes to the Framework i, Authorisation i and Access i Directives. A separate legislative reform proposal i covers changes to the other two directives. This is complemented by the proposal for a Regulation creating a new European Electronic Communications Market Authority i. The three legislative reform proposals are accompanied by an Impact Assessment i and a Communication setting out the main policy lines and reporting on the public consultation i. In addition, the Commission has adopted a second version of its Recommendation on relevant product and service markets, under which the number of markets susceptible to ex-ante regulation is reduced from 18 to 7.
The present legislative reform proposal aims to adjust the regulatory framework for e-communications by improving its effectiveness, reducing the administrative resources needed for implementing economic regulation (the market analysis procedure) and making access to radio frequencies simpler and more efficient. It is in line with the Commission’s Better Regulation Programme, which is designed to ensure that legislative interventions remain proportionate to the political objectives pursued, and forms part of the Commission’s overall strategy to strengthen and complete the internal market.
More specifically, the objectives of the present proposal are three-fold:
1. Moving towards a more efficient management of spectrum so as to facilitate access to spectrum for operators and to foster innovation.
2. Ensuring that, where regulation remains necessary, this is more efficient and simpler both for operators and for national regulatory authorities (NRAs).
3. Making a decisive step towards more consistency in the application of EU rules in order to complete the internal market for electronic communications.
- General context
As part of the renewed Lisbon strategy for growth and jobs, the Commission proposed in June 2005 a new strategy — the i2010 Initiative: A European Information Society for growth and employment — laying down broad policy orientations to promote an open and competitive digital economy. The creation of a Single European Information Space, which is one of the main pillars of the i2010 Initiative, includes the reform of the regulatory framework as one of its key challenges. The i2010 Initiative also stresses that a more effective management of spectrum would boost innovation in ICT and help provide affordable services to European citizens.
In line with the principles of better regulation, the framework provides for a periodic review to make sure that it keeps pace with technological and market developments.
In June 2006 the Commission presented a report i to the European Parliament and the Council on the functioning of the regulatory framework for electronic communications networks and services. The report noted that the framework had yielded considerable benefits, but that the internal market for electronic communications was still not complete, as many aspects continue to be regulated at national level.
This situation contrasts with technological and market developments, which are unconstrained by national borders and thus demand a common regulatory approach across the EU. The current fragmentation hinders investment and is detrimental to consumers and operators. This calls for a substantial reform of the regulatory framework in order to strengthen and complete the internal market.
- Existing provisions in the area of the proposal
The objective of this proposal is to amend three Directives: the Framework, the Authorisation and the Access Directives.
- Consistency with the other policies and objectives of the Union
The proposal to amend the Framework Directive in the area of security and integrity is designed to strengthen the resilience of current electronic communications networks and systems. It complements Framework Decision 2005/222/JHA on attacks against information systems i, which criminalises certain activities. The proposal to amend the Authorisation Directive to establish a common selection procedure will facilitate authorisation of certain pan-European satellite services, in line with one of the objectives of the European Space Policy i.
- Consultation of interested parties
Consultation methods, main sectors targeted and general profile of respondents
The Commission services launched a two-phase consultation at the end of 2005. The first phase included a call for input, which involved a public hearing with over 440 participants (held in January 2006) and around 160 submissions from stakeholders. In the call for input, stakeholders were invited to give their views on general topics relating to the regulation of electronic communications. These views were taken into account in the preparation of the Commission Communication of 29 June 2006 on the Review i, and the accompanying Staff Working Document and the Impact Assessment. The publication of these documents launched the second phase of the public consultation, which lasted until October 2006. A public workshop was held in October 2006 to allow interested parties to express their views on the consultation documents. 224 responses were received from a wide range of interested parties, both inside and outside the EU. 52 industry associations, 12 trade associations and worker’s unions and 15 user’s associations sent written comments, as did 18 Member States and the European Regulators Group (ERG). The Commission followed up the ERG submission with a regulatory dialogue between November 2006 and February 2007 to explore options for reducing regulatory inconsistencies and obstacles to the single market in a spirit of better regulation.
Proposals in the areas of spectrum management and streamlining of market reviews received broad support from the Member States and industry. A large number of the contributions submitted by industry called for a true internal market in electronic communications. Some concerns were expressed about specific aspects of possible Commission oversight over remedies without involvement of the NRAs, and with regard to changes to appeal procedures. In the area of security, the submissions showed wide support for the overall objectives, but the opinions expressed were more nuanced with respect to the proposed means for achieving these objectives. New entrant operators as well as the ERG called for the possibility to introduce functional separation. The proposal concerning the authorisation of services with a pan-European dimension received broad support. The results of the public consultation have been taken into account in the present proposal.
- Collection and use of expertise
Scientific/expertise domains concerned
- Study “Preparing the next steps in regulation of electronic communications – a contribution to the review of the electronic communications regulatory framework” (Hogan & Hartson, Analysys), 2006.
The study confirmed the soundness of the regulatory framework and its objectives. However, it indicated the need for some adjustments.
- The study took a broad look at some aspects of regulation, which included a survey of market players on obstacles to the internal market and an assessment of the ‘Article 7’ market analysis procedure. It made a number of recommendations for change, including ways to streamline the market review procedure and improving appeals in national courts, though none of the recommendations suggested sweeping changes to the framework. It proposed a Commission veto on remedies in cases justified by their internal market dimension and the inclusion of functional separation in the list of remedies available to NRAs.
The study is available at:
ec.europa.eu/information_society/policy/ecomm
- Impact assessment
The impact assessment report of June 2006 provided an initial analysis of a set of broad policy options. This analysis was refined following the public consultation. The second impact assessment, published together with the present proposal, focuses on a more specific set of options for those proposals with the most far-reaching effects. This assessment has benefited in particular from an expert study on the policy option for efficient spectrum management.
The groups affected most by the proposed changes are businesses (incumbents and new entrants in the electronic communications sector as well as business users of electronic communications services), public administrations, citizens and European society at large, which are all users of electronic communications. In particular, the key players affected by the present proposal are NRAs, providers of electronic communications and also broadcasters. This is not a homogeneous group: its members may often have conflicting interests. The impact assessment is available at:
ec.europa.eu/information_society/policy/ecomm
Contents
- LEGAL ELEMENTS OF THE PROPOSAL
- BUDGETARY IMPLICATION
- 2. CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT
- Summary of responses and how they have been taken into account
- Summary of advice received and used
- Means used to make the expert advice publicly available
- 5. ADDITIONAL INFORMATION
- New approach to spectrum management
- Consolidating the internal market and improving consistency
- Improving security and network integrity
- Independence of regulators, right of appeal
- Technical adjustments to the wording of the Directive
- Removal of outdated or obsolete provisions
- Article 2 includes changes to the Access Directive
- Article 3 includes changes to the Authorisation Directive
- Implementation of spectrum reform
- Frequencies and numbers for cross-European services
- Enforcement powers of the NRAs
- Improved eAccessibility for disabled end-users
- Improved emergency communications to the public
- Other issues
- Technical adjustments to the wording of the Directive
- Article 4 repeals Regulation (EC) No 2887/2000 on unbundled access to the local loop
- Articles 5, 6 and 7
- Summary of the proposed action
The proposal aims to modernise and amend the existing Framework, Authorisation and Access Directives.
The main proposed amendments to the Framework Directive are the following:
- Reforming spectrum management, in application of the Commission’s policy approach on spectrum management set out in the Communication of September 2005 i. Technological development and convergence underline the importance of spectrum, but its management within the EU has not kept pace with this evolution. A more flexible approach is thus needed to exploit the economic potential and realise the societal and environmental benefits of improved spectrum usage.
- Improving the consistency of regulation of the internal market in electronic communications. This will be achieved by a stronger role for the Commission in remedies imposed by NRAs, which will be combined with the close involvement of the new Electronic Communications Market Authority in the ‘Article 7’ procedure to ensure that the joint expertise of NRAs can be effectively harnessed and efficiently taken into account in the final Commission decision.
- Strengthening security and integrity, for the benefit of users of e-communications. This is essential in order to reinforce the trust and confidence of business and citizens using e-communications.
As regards the Authorisation Directive , the main changes are as follows:
- Aligning the Directive to the new policy for spectrum;
- Creating an efficient procedure for firms needing rights of use to provide cross-European services; and
- Ensuring a smooth transition to the introduction of spectrum trading.
As regards the Access Directive , the main change is the introduction of functional separation as a remedy that can be imposed by NRAs, subject to approval by the Commission, which has to seek the advice of the new Authority to this end.
- Legal basis
Article 95 EC320
- Subsidiarity principle
The proposed action entails amendment of the existing EU regulatory framework and thus concerns an area in which the Community has already exercised its competence. The proposal therefore complies with the subsidiarity principle as set out in Article 5 of the EC Treaty. Moreover, the regulatory model for the framework is based on the principle of decentralised regulation in Member States, giving national authorities responsibility for overseeing markets according to a common set of principles and procedures.
- Proportionality principle
This proposal complies with the proportionality principle as it proposes a minimum level of harmonisation, leaving the definition of the implementing measures to the NRAs or to the Member States, as in the following areas:
- the simplification of the ‘Article 7 procedure’ offers a way to streamline the administrative burden for operators and NRAs — in line with the better regulation policy of the Commission — while ensuring that an efficient Community mechanism is in place for key areas where there is a need for regulatory consistency in the Internal Market;
- the measures to strengthen security and integrity do not prescribe detailed obligations at EU level, but rather grant additional enforcement powers to NRAs, the effective regulation of these issues remaining the responsibility of the Member States.
The proposed amendments do not go beyond what is necessary for achieving the aim of better regulation of the sector. They comply with the principle of proportionality set out in Article 5 of the EC Treaty.
- Choice of instruments
Proposed instruments: directive.
Other means would not be adequate as the object of this proposal is to amend three existing directives.
The proposal has no implication for the Community budget.
- Simplification and reduction of administrative costs
Several changes aim to cut the administrative burden for NRAs and market players:
- Increased flexibility in spectrum management tasks will facilitate administrative procedures for NRAs and spectrum use for operators and consumers. Under the proposed mechanism, regulatory restrictions (e.g. licensing conditions) will be limited to the minimum.
- Provisions are introduced that would allow some relaxation of the obligation for NRAs to notify draft measures to the Commission under Article 7 of the Framework Directive. These could include a short form notification procedure for certain draft measures (e.g. those concerning stable markets, or minor changes to previously notified measures), where the NRA would only inform the Commission about its intended measure and provide a limited description of its content; and a notification exemption procedure for certain categories deemed unlikely to raise competition concerns, where the NRA would no longer be obliged to notify the draft measures to the Commission.
Furthermore, it is proposed to repeal some outdated provisions, including, for example, the transitional measures to facilitate the transition between the ‘old’ framework of 1998 and the 2002 framework.
The proposal is included in the Commission’s rolling programme for updating and simplification of the acquis communautaire and its Work and Legislative Programme under the reference 2007/INFSO/001.
In a parallel exercise, the number of markets potentially susceptible to ex-ante regulation will be reduced from 18 to 7 through changes to the Commission recommendation on relevant markets.
- Repeal of existing legislation
The adoption of the proposal will lead to the repeal of Regulation (EC) No 2887/2000 of the European Parliament and of the Council of 18 December 2000 on unbundled access to the local loop i.
- Review/revision/sunset clause
The Directives to be amended already include a regular review clause.
- Correlation table
Member States are required to communicate to the Commission the text of national provisions transposing the Directive as well as a correlation table between those provisions and this Directive.
- European Economic Area
The proposed act concerns an EEA matter and should therefore extend to the EEA.570
- Detailed explanation of the proposal
Article 1 includes changes to the Framework Directive
The aims of the proposed changes are as follows:
- In Article 6: this ensures that Member States also consult interested parties when considering a possible derogation to the principles of technology and service neutrality.
- In Article 8 i: this clarifies the existing wording.
- In Article 9: in order to allow more flexibility to take account of market needs, this makes technology neutrality (Article 9.3) a binding principle, and introduces the principle of service neutrality (Article 9.4), with the possibility for exceptions to the principle in limited cases such as meeting general interest objectives. The principle of spectrum tradability can be imposed in commonly defined bands (9b). The changes also introduce a transitional phase (Article 9.a) and allow the Commission to take implementing measures via the comitology procedure to coordinate the application of the new principles (9c) for internal market purposes.
- In Article 7, paragraph 4: this extends the Commission's power to oversee the remedies proposed by the NRA for undertakings with significant market power.
- In Article 7, paragraphs 5 and 7: this aims to reinforce the coordination of regulation within the internal market. The Authority is to assist the Commission with its advice.
- In Articles 7 i, 7 i, 7a, 16 i, 16 i: this rationalises some procedural elements in the market review process so as to reduce the uncertainty for market players. Article 16 i allows the Commission, assisted by the Authority, to take over a market analysis if an NRA is significantly late in performing its duties. Article 7 i allows the Commission, assisted by the Authority, to impose specific obligations for draft measures that have been re-notified.
- Article 16 i: introduces a schedule for carrying out market analysis.
- Article 10 i: this clarifies the Commission’s powers in the field of numbering for certain services with an internal market dimension. The “116” case shows that it is necessary to grant the Commission some powers for tariffs linked to the use of specific numbers. The Authority may be granted responsibilities in the implementation in the application of measures adopted by the Commission.
- In Articles 15 i and 16 i: for trans-national markets, the Commission will designate undertakings with significant market power and impose specific obligations, taking account of the opinion of the Authority.
- In Article 19: the existing powers of the Commission are clarified so as to ensure harmonisation or coordination at Community level in some areas. This will allow technical regulatory issues, and issues raised by changing technology, to be addressed in a timely and coordinated way rather than in a fragmented manner.
- In the new Article 21a: this improves the enforcement powers available to NRAs.
- A new chapter is added on the security and integrity of networks and services. Obligations in this field are reinforced to ensure the reliable and secure use of e-communications (Article 13a(1)). The Authority will contribute to the harmonisation of appropriate technical and organisational security measures by providing expert advice to the Commission. New provisions extend the scope of integrity requirements beyond telephone networks to cover mobile and IP networks (Article 13a(2)). Article 13b gives implementing powers to the NRAs in this area.
- In Article 3, paragraph 3: this strengthens the NRA’s independence by setting standards for the dismissal of the head of the NRA, limiting the possible influence of other public bodies on the NRA’s day-to-day management, and ensuring that it has its own independent budget and sufficient human resources.
- In Article 4, paragraph 1: this sets out a minimum criterion (urgent need to prevent serious and irreparable harm to the party concerned) for the suspension of an NRA measure, in line with established case law of the European Court of Justice.
- In Article 4, paragraph 3: this requires Member States to provide the Authority and the Commission with information on appeals.
- In Article 5, paragraph 1: this allows NRAs to be informed about network developments (e.g. NGN architecture) that may have an impact on services provided at wholesale level to competitors.
- In Article 1, paragraph 1: this brings terminal equipment within the scope of the framework. This is in line with the changes proposed in the revised Universal Service Directive to improve eAccessibility for disabled end-users.
- In Article 2: several definitions are updated (points (d) and (e)), or clarified (points (b), (q), (r) and (s)).
- In Article 8: this updates the objectives of the NRAs, notably as regards elderly users and users with social needs. Point (g) concerns the freedom of end-users in the information society.
- In Article 10 i: this corrects an inconsistency in the current wording.
- In Article 11: this facilitates the sharing of facilities or property and the coordination of civil works. The deletion is to be seen in parallel with the deletion of Article 12 i.
- In Article 12: this enables NRAs to impose duct sharing and entry to buildings. The purpose of this amendment is to facilitate network investment in fibre, notably outside urban areas.
- In Article 14 i: this is deleted as it has proved to be unnecessary. The extension of market power from one market to another should be addressed in the market where the market power exists.
- In Article 20: this clarifies that disputes between content providers (e.g. broadcasters) and providers of electronic communications services fall within the scope of Article 20.
- In Article 21: the new Authority will issue opinions to the NRAs as to the action to be taken; the latter will have to take these into account.
- Annexes I and II of the Directive are deleted as they are not necessary.
- In Article 18 i: this provision has become obsolete.
- In Article 27: this concerned transitional measures for moving from the old regulatory framework of 1998 to the new 2002 framework. It is now obsolete and can be repealed.
The aims of the proposed changes are as follows:
- In Article 5 i: this overlaps with several other provisions and is repealed.
- In Article 7: outdated provisions are repealed.
- In Article 13a: this enables an NRA to impose functional separation and sets out the circumstances, in particular the governance arrangements. Imposing functional separation requires the prior agreement of the Commission.
- In Article 13b: this concerns the case of voluntary separation.
- In Article 12(1)(f) and (j): point (f) clarifies the provisions for facility sharing; point (j) excludes discrimination at the level of IP network interconnection.
Technical adjustments have been made to the following articles: 5 i (which is moved to Article 12(3)), 2(a), and 4 i. These also include the updating of the reference to the Directive on privacy in electronic communications (Article 8(3)) and the alignment of the text with the new Comitology Decision (Articles 6 i, 5, 14).
The aims of the proposed changes are as follows:
- In Article 5: this eases access to spectrum. Provisions governing spectrum assignments to broadcasters are clarified, without affecting the substance of the existing provisions. A procedure is established to ensure a smooth transition (5 years) before spectrum trading is fully implemented (Article 5(2)). Member States may take measures to stop spectrum hoarding — 5 i.
- In Articles 5 i, 6, 7 i and the Annex: this lays down provisions to ensure more flexible use of spectrum, i.e. the implementation of technology neutrality (the freedom to use any technology in a spectrum band), service neutrality (the freedom to use spectrum to offer any service) and spectrum tradability.
- In Articles 6a and 6b: to facilitate access to spectrum for firms needing rights of use in all Member States (e.g. satellite service providers), the Commission, assisted by the Communications Committee, can coordinate or harmonise the conditions applicable to individual rights (Annex II), the selection procedures and the selection of the undertaking(s). The Authority will assist the Commission by issuing opinions. These Articles will replace Article 8, which has proved to be ineffective.
- In Article 10: this strengthens the enforcement powers of the NRAs so as to improve the effective implementation of the framework.
- In Point A.8 of the Annex: this allows NRAs to attach specific conditions to general authorisations to ensure accessibility for users with disabilities.
- In Point A.11a of the Annex: this allows NRAs to attach to general authorisations conditions concerning communications from public authorities to the public in the case of imminent threats.
- In Point A.19 of the Annex: this allows NRAs to attach to general authorisations conditions concerning copyright and intellectual property rights.
- Technical adjustments are made in Articles 7 i, 14 and 14a and in the Annex. References to the old e-Privacy Directive 97/66/EC are replaced by references to the new one (Directive 2002/58/EC i).
This Regulation proved to be effective in the initial phase of market opening. Under the 2002 framework, NRAs had a duty to analyse markets before imposing regulatory measures. However, this Regulation has become unnecessary and may be repealed.
Articles 5, 6 and 7 are standard procedural articles (transposition, review, entry into force, etc.).
Annexes I and II include amendments to the annex of the Authorisation Directive.