Annexes to COM(2007)696 - Report on the outcome of the Review of the EU regulatory framework for electronic communications networks and services in accordance with Directive 2002/21/EC and summary of the 2007 reform proposals

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dossier COM(2007)696 - Report on the outcome of the Review of the EU regulatory framework for electronic communications networks and services in ...
document COM(2007)696 EN
date November 13, 2007
agreement among stakeholders, especially mobile operators and the wireless industry. In contrast, some broadcasters and operators of terrestrial TV distributions networks expressed concerns regarding the impact that this could have on existing rights.

The principle of technology neutrality was also viewed favourably by most respondents. The progressive removal of technical restrictions was welcomed. The issue of interference management was a concern for many, especially in the context of unlicensed spectrum, while some respondents indicated that technical solutions to address the problem were imminent.

The public consultation revealed growing support for secondary trading. Most Member States, industry associations and companies were in favour, although prevention of spectrum hoarding was seen to be necessary. The opposing view was expressed mainly by terrestrial broadcasters and some Member States concerned that trading would affect broadcasting.

Policy Proposal - Spectrum

5. Simplify access to spectrum and remove unnecessary restrictions on spectrum use

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.

The proposals take into account the policy objective to achieve economies of scale, but also the need to avoid harmful interference and the achievement of general interest objectives such as social and regional cohesion, ensuring safety of life, avoiding inefficient spectrum use, and promoting cultural and linguistic diversity and media pluralism.

4. THE SINGLE MARKET FOR ELECTRONIC COMMUNICATIONS

4.1. Background and objectives

In recent years, technological and market developments have increased the potential for deploying electronic communications services beyond the geographical frontiers of individual Member States. Already today there is a business interest in providing satellite personal communication systems and mobile communications on board aircraft and ships beyond national borders. In addition, important services such as mobile broadband and voice over IP require coherent regulatory conditions in order to realise their full potential across the single market.

However, in spite of competitive pressure from other economic regions, 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 outlined a number of proposals in its 2006 consultation documents, namely to:

i) improve efficiency and consistency of regulation in the EU by strengthening the Commission’s oversight of remedies imposed by NRAs;

ii) improve the efficiency and speed of enforcement mechanisms by strengthening the independence and effective powers of national authorities;

iii) establish a simpler procedure for the selection and authorisation of operators for the provision of cross-Community services;

iv) reinforce institutionally the cooperation between NRAs and the Commission.

4.2 . Results of the public consultation

Many stakeholders had major concerns about the differences that exist in the way the current framework is implemented at national level and which prevent the full benefits of the internal market from being achieved. Some called for more regulation at EU level. Industry in particular, but consumer associations as well, deplored the continued lack of a single market and a level playing field for businesses and users in the electronic communications sector. Furthermore, the limitations of the ERG — which, despite some efforts made in 2006 and 2007, allows only for loose coordination among regulators — were mentioned by stakeholders. While Member States had reservations about “ceding powers” to the Commission, several industry groups (new entrants, but also some incumbents) either favoured an institutional reform of the ERG and/or asked for a stronger role for the Commission in order to avoid a “lowest common denominator” approach, seen by some as inherent in a regulatory mechanism that essentially relies on consensus among 27 NRAs.

In addition, a number of views reflected the fact that the current approach for selecting and authorising operators is not compatible with exploitation of the economies of scale needed for the development of new services. In particular, for cross-Community services and those with the potential to become such, there is a case for establishing a single unified system for the authorisation of rights of use for spectrum and numbers.

With respect to enforcement mechanisms, the vast majority of Member States and the new entrants association agreed with the proposal to strengthen the enforcement powers of national authorities, while incumbents and the mobile operators association disagreed with this proposal.

Policy Proposals — Internal Market

6. Strengthen the independence and enforcement powers of national authorities

This will improve the effective and speedy implementation of the regulatory framework.

7. Complete the single market by establishing an independent European Electronic Communications Market Authority

It is proposed to establish an independent European Electronic Communications Market Authority, bringing together the NRAs currently meeting within the ERG. It would advise the Commission, have a clear mandate to act in furtherance of the single market, and be accountable to the European Parliament. The new Authority would thus replace today’s loose cooperation among NRAs inside the ERG by a more efficient, more authoritative and more accountable system.

The new Authority would:

- reinforce the coherence and consistency of the application of the EU rules in the internal market by making better use of the combined expertise of national regulators in the Community system;

- assist the Commission in other fields related to electronic communications such as the analysis of trans-national markets and the selection of undertaking(s) for the provision of cross-border services;

- serve as an entry point for firms seeking to acquire rights of use for spectrum and numbers to provide cross-border services in the EU;

- take over the functions of the European Network and Information Security Agency (ENISA) and act as a centre of expertise at European level on network and information security issues.

8. Strengthen the Commission’s oversight on remedies in order to improve consistency

The legislative proposals extend the Commission’s power under the market review procedure to oversee remedies proposed by NRAs, in close cooperation with the new European Authority, with a view to contributing to a more consistent, efficient and speedy application of remedies across the EU.

9. More technical harmonisation in a number of key areas

In order to reduce divergence in the implementation of the regulatory framework, it is proposed that the Commission, drawing upon the expertise of the Authority, should be able to adopt technical harmonisation measures in areas such as costing methodologies, implementation of number portability, consumer protection, and accessibility to electronic communication services and equipment for end-users with disabilities.

5. CONNECTING WITH CITIZENS

5.1. Users’ rights and consumer protection

Background and objectives

The combined effects of technological change and enhanced competition have started to give citizens more choice as well as better and cheaper services. However, more can be done to ensure that consumers can reap the full benefits of a truly single market for electronic communications.

In its Communication of June 2006 the Commission identified four main areas for change, namely:

- Transparency and publication of information for users;

- Improved accessibility for users with disabilities;

- Emergency services and access to 112; and

- Basic connectivity and quality of services (‘net neutrality’).

In addition, long-term issues such as the concept and scope of universal service, which have already been identified by the Commission[20], will be addressed in a Commission Communication to be published in 2008.

Results of the public consultation

While consumers and associations of users with disabilities welcomed the Commission proposals in all areas, many operators argued that mandatory measures can negatively affect their ability to innovate, and preferred to rely on self-regulation. Equipment manufacturers and software companies were supportive of strengthened harmonisation at EU level. A majority of the Member States that submitted comments supported the proposals in the areas of eAccessibility, transparency of information and quality of service. The ERG also supported the proposals in the areas of transparency of information, caller location and eAccessibility.

Policy proposals — Consumer protection

10. Update and strengthen the general provisions of the framework in the area of consumer protection

The legislative proposals include:

- Improving the transparency of information from service providers to consumers, including information on supply conditions and on tariffs.

- Setting a time limit of one working day for ‘porting’ (transferring) a telephone number following a change of fixed or mobile operator.

- Enhancing the implementation of ‘112’ emergency services in the EU, in particular by ensuring more efficient access to caller location information.

- Enabling NRAs to impose minimum requirements for the quality of services based on standards drawn up at Community level.

11. Update and strengthen provisions in the area of eAccessibility and the rights of users with disabilities

The legislative proposals include

- Facilitating access by users with disabilities to 112 emergency services.

- Strengthening the existing provisions to ensure that users with disabilities, elderly users and people with special needs are not prevented from using and accessing eCommunications services.

5.2. Privacy and security

Background and objectives

One of the central goals of the regulatory framework is to promote the interests of EU citizens by, among other things, ensuring a high level of protection of personal data and privacy and ensuring that the integrity and security of public communications networks are maintained. The growing number of new electronic threats in recent years such as viruses, spam, spyware and phishing has further increased the importance of these objectives.

The June 2006 consultation documents outlined a number of proposals to strengthen the existing security-related provisions of the regulatory framework. These changes are designed to strengthen the resilience of current networks and systems, complementing other legislation that criminalises certain activities[21], and to enhance the security of personal data in the electronic communications sector.

Results of the public consultation

The results of the public consultation showed that Member States are cautiously supportive of the Commission proposals. On the other hand, several operators and service providers are concerned about potential cost implications. Consumer organisations are in favour, while Data Protection Authorities want the Commission to go further in its proposals.

Policy proposal — Privacy and security

12. Strengthen the security of networks and services and user privacy

The Commission’s legislative proposals address a range of issues, including

- Ensuring that consumers are informed if their personal data have been compromised as a result of a breach of network security;

- Giving operators and NRAs more responsibility with respect to the security and integrity of all electronic communications networks and services;

- Strengthening implementation and enforcement powers for competent authorities, in particular in the fight against ‘spam’;

- Clarifying the application of the EU rules to data collection and identification devices using public electronic communications networks.

Achieving these objectives will be facilitated by incorporating ENISA into the new Electronic Communications Market Authority.

6. CONCLUSION

With the 2007 Reform of the EU regulatory framework, the Commission proposes to adapt the present set of rules to technological and market developments.

In line with its commitment to better regulation, the Commission is prepared to take a first major step towards de-regulation of the sector by reducing the number of markets that warrant ex-ante regulation from 18 to 7. At the same time, the Commission intends to enhance competition in the remaining bottlenecks, by for example introducing the new remedy of functional separation.

The Commission also proposes making a decisive step towards a single European market for electronic communications to ensure that businesses and consumers can provide and use electronic communications in a seamless manner across borders. The limitations of managing Europe’s electronic communications via 27 separate national regulatory systems are becoming increasingly apparent and are hurting Europe’s competitiveness. The Commission therefore proposes completing the single market in regulatory terms by establishing an independent European Electronic Communications Market Authority, which, together with the Commission, will help level the regulatory playing field in Europe and enhance Europe’s ability to deal with network information and security issues.

In addition, the Commission considers it essential to strengthen citizens' rights, for example by ensuring that, as markets offer increasing choice, consumers are better informed about supply conditions and tariffs and can more easily switch providers.

With its 2007 Reform Proposals, the Commission is also tackling the area it sees as the key weakness of the EU framework in looking to the future, namely the management of radio spectrum, by proposing reforms to enhance innovation and investment in wireless technologies.

Electronic communications provide the foundations for the EU economy as a whole. A functioning single market is Europe’s best asset in its quest for global competitiveness. Europe has no time to lose. This is why the Commission believes that the 2007 Reform Proposals should become law before the end of 2009.

[1] COM(2005) 229.

[2] OJ L 108, 24.4.2002, p. 33.

[3] COM(2007) 697; COM(2007) 698; COM(2007) 699.

[4] SEC(2007) 1472.

[5] http://ec.europa.eu/information_society/policy/ecomm/info_centre/documentation/public_consult/review/index_en.htm.

[6] COM(2006) 334.

[7] http://ec.europa.eu/information_society/policy/ecomm/info_centre/documentation/public_consult/review_2/index_en.htm.

[8] Commissioner Reding’s letter to the ERG of 30.11.2006, the ERG response and the joint statement of Commissioner Reding and Chairman Viola of 27.2.2007 can be found at:http://erg.eu.int/whatsnew/index_en.htm.

[9] Further evidence and quantitative data can be found in the associated Impact Assessment.

[10] Commission Recommendation on relevant product and service markets within the electronic communications sector susceptible to ex-ante regulation in accordance with Directive 2002/21EC (OJ L 114, 8.5.2003, p. 45).

[11] Commission, 12th Report: European Electronic Communications Regulation and Markets 2006, Annex 2, p. 13. Figures in terms of retail revenue for all types of calls, EU-25 as of December 2005.

[12] Ibid. Annex 2, p. 66. EU-25 Figures as of October 2006, resale included.

[13] See the Commission Communication “Reaping the full benefits of the digital dividend in Europe: a common approach to the use of the spectrum released by the digital switchover” - COM(2007) 700.

[14] Brussels European Council, 14-15 December 2006, Presidency Conclusions 16879/1/06 rev. 1.

[15] Resolution (P6_TA-PROV(2007)0041) available at:http://ec.europa.eu/information_society/policy/radio_spectrum/docs/ep_dr_res_spectrum_14_02.pdf.

[16] Broadband is the basic infrastructure of the knowledge economy and has significantly contributed to the economic impact of ICT, driving half of the productivity gains in modern economies in the past decade.

[17] On average, in EU-25, broadband was available to more than 90% of urban population, but was limited to 71% of rural population (Commission, estimates, January 2007).

[18] COM(2005) 411, COM(2005) 400, COM(2005) 461.

[19] See notably Opinions of RSPG on the Digital Dividend, on Spectrum Trading and on the Wireless Access Policy for Electronic Communications Services (WAPECS); texts available athttp://rspg.ec.europa.eu.

[20] See the two Communications on the Review of the scope of universal service - COM(2005) 203 and COM(2006) 163.

[21] 8VWXvwxyÚ Û Ü Council Framework Decision 2005/222/JHA on attacks against information systems (OJ L 69, 16.3.2005, p. 67).