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Telecommunications

The organization of the telecommunications sector has been the subject of intense regulatory activity since the end of the 1980s.

This has involved on the one hand the abolition of monopolies and of the restraints on competition put in place by the national authorities (liberalization) and, on the other, the establishment of a common regulatory framework for the countries of Europe, laying down new rules for the organization of the sector (re-regulation).

These new rules have three aims:

• to establish effective competition between economic operators;
• to guarantee certain public service objectives, in particular universal service;
• the Europeanization of networks and services (provisions concerning interconnection and interoperability, standardization and the harmonization of service provision).

Allocation of scare resources

Member States have a number of obligations concerning the allocation of scarce resources. In particular, they must provide a sufficient quantity of numbers for all services available to the public. They are also required to ensure that users have easy access to all services (offered by competing suppliers) passing through the network of the operator owning the infrastructure (operator pre-selection) and number portability (allowing subscribers to keep their telephone number when they change operator).

Scarce resources must be allocated in a transparent and non-discriminatory manner. Fees may be payable for them in proportion to their economic value.

Interconnection

Community legislation gives priority to direct commercial negotiation between different economic operators, subject to the observance of certain principles, in particular concerning price-setting, interconnection and the obligations applicable to public network operators.

Operators owning fixed or mobile public networks are required to negotiate agreements among themselves. This constraint is greater for dominant market operators, who are required to grant any reasonable request for access to their networks and to publish a detailed, cost-related price offer.

If it proves impossible to reach an agreement through commercial negotiation, there are dispute settlement procedures at national and Community level.

Universal service and consumer protection

The opening of public telephone infrastructures and services to competition and the implicit abandonment of tariff equalization rules have resulted in a European consensus on the need for a regulatory principle to correct the imperfections of the competitive market, especially as regards the least profitable connections.

This has taken the form of the universal service requirement which guarantees all users (social dimension) access to networks and services at a reasonable price, especially in rural or high cost areas (territorial dimension).

As currently defined, universal service means the obligation to provide access to the fixed network allowing voice telephony and the connection of a modem and a fax. It also involves a certain number of services, such as free access to the emergency services, operator assistance and an enquiry service, supply of the directory and perhaps even the provision of public payphone booths.

The national authorities are responsible for designating the operator(s) who is to provide the universal service.

Funding of the universal service may be shared among the various operators providing public telecommunications services or networks, if it can be proved that the obligation to provide universal service is an unfair burden on the designated operator.

In conjunction with the work on universal service, two other concepts have also emerged from the European debate: universal availability and public access.

Universal availability applies to leased lines. It imposes an obligation to serve all the territory of the Union (territorial dimension) without an affordable price criterion (social dimension).

The concept of public access refers to access to new services in public places such as schools, libraries, hospitals and administrations. It is chiefly a matter for the national players.

It should be noted that, in addition to universal service, the legislation on fixed voice telephony includes other provisions designed to protect the consumer. In particular, it defines the rights of service users in their relationship with suppliers: service quality, supply times, detailed billing (exceptions possible for some categories of users), dispute procedures, etc. To this end, it provides for a compensation or refund procedure where the service provided does not match the criteria laid down. Provision may nevertheless be made for justified exceptions.

The provisions concerning the protection of privacy in connection with the processing of personal data are also designed to protect the consumer.

New Developments

Rapid technological progress in the fields of satellite and mobile communications have led the Commission to publish policy documents with the aim of defining the Union's development strategy.

Satellite communications

Satellite communications are the subject of an public consultation has been launched for the purpose of drawing up guidelines for the move towards third generation mobile and wireless telecommunications systems (universal mobile telecommunications system - UMTS).

These are concerned in particular with the regulatory aspects (timetable and method of transition from second (GSM) to third generation systems), standardization, frequency allocation, R&D targets and international aspects (frequency allocation and standardization).

Convergence

The Union's options concerning the implications of convergence in telecommunications, the media and IT industries have been explored in a the development of specific regulations for new activities alongside the regulations governing telecoms and the media.