Judgment — ECLI:EU:C:2005:622
Date: 2005-10-20
Language of the case: German
Court formation: Third Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Right of establishment;Freedom to provide services;Telecommunications
Concepts: Telecommunications
Procedure: Reference for a preliminary ruling
Origin: Germany

summary of the ‘Communication from the Commission to the Council and the European Parliament – the Consultation on the Green Paper on the Liberalisation of Telecommunications Infrastructure and Cable Television Networks’, Brussels, 3 May 1995, COM(95)158 final. 5 – ‘Towards a dynamic European economy, Green Paper on the development of the common market for telecommunications services and equipment’, Brussels, 16 December 1987, COM(87)290 final, pp. 6 and 16 et seq. of the Summary. 6 – ‘Green Paper on the liberalisation of telecommunications infrastructure and cable television networks’ – Part II, Brussels, 25 January 1995, COM(94)682 final, p. 61 et seq. Also Commission Communication, ‘Towards a new framework for Electronic Communications infrastructure and associated services – The 1999 Communications Review’, Brussels, 10 November 1999, COM(99)539 final, p. 25. 7 – Opinion delivered on 12 December 2002 in Joined Cases C-292/01 and C-203/01 Albacom and Infostrada [2003] ECR I-9449, points 2 to 7 of which are almost literally reproduced in points 6 to 11 of this Opinion. 8 – According to the first indent of Article 2(1)(a) of the Directive, ‘general authorisation’ means ‘an authorisation, regardless of whether it is regulated by a “class licence” or under general law and whether such regulation requires registration, which does not require the undertaking concerned to obtain an explicit decision by the national regulatory authority before exercising the rights stemming from the authorisation’. 9 – ‘“Individual licence” means an authorisation which is granted by a national regulatory authority and which gives an undertaking specific rights or which subjects that undertaking’s operations to specific obligations supplementing the general authorisation where applicable, where the undertaking is not entitled to exercise the rights concerned until it has received the decision by the national regulatory authority’ (second indent of Article 2(1)(a) of the Directive). 10 – The conditions to which authorisations should be made subject are set out in the Annex to the Directive. 11 – BGBl. 1996, I. p. 1120. 12 – BGBl. 1999, I, p. 1887. 13 – According to the Commission ‘licences in the field of telecommunications implicitly restrict freedom to provide services and can distort market structures’ (Communication cited in footnote 4, p. viii). 14 – That definition was used by the Verwaltungsgericht, Cologne, in a judgment of 15 December 2000, published in Multimedia und Recht, 5/2001, p. 327. 15 – The same idea is expressed by L. Gramlich in Rechtsfragen der Nummerierung nach § 43 Telekommunikationsgesetz, Archiv für Post und Telekommunikation 1998, p. 16; and J. Scherer, ‘Entwicklungslinien des Telekommunikationsrecht’ in Computer und Recht 2000, p. 42. 16 – See S. Ploster, Das Telekommunikationsrecht der Europäischen Gemeinschaften, Vienna, 1999, p. 78. 17 – ‘Towards a European Numbering Environment – Green Paper on a numbering policy for telecommunications services in Europe’, COM(96)590 final, p. 1 and footnote 3. 18 – I expressed similar views in points 30 and 31 of my Opinion in Albacom andInfostrada when suggesting an interpretation of Articles 2, 5 and 9 of the Directive. 19 – Directive 2002/20/EC of the European Parliament and of the Council of 7 March 2002 on the authorisation of electronic communications networks and services (OJ 2002 L 108, p. 21). 20 – Recital 32 in the preamble to the ‘authorisation directive’ acknowledges that it does not aim to indicate the purposes for which usage fees are to be employed. 21 – At the end of point 51 of my Opinion in Albacom and Infostrada, I stated that ‘disparities in the tax treatment of the same taxable event by the Member States are likely to cause significant distortions of competition, which would affect the freedom of movement of persons, capital and goods, and the freedom to provide services’. (J. Scherer, op. cit, p. 42, criticises the Directive regarding the latitude given to the Member States, in that they are allowed to impose charges of varying amounts for the allocation of scarce resources, raising real barriers to access to the market. S. Polster, op. cit., p. 78, endorses that view, drawing attention to the lack of precise guidance for determination of the maximum permissible level for such charges. For its part, the European Telecommunications Office, in a report it prepared for the Commission (Annexes to the second interim report. Fees for licensing telecommunications services and networks, July 1999, p. 5), stated that the divergences between the burdens borne by operators may have an adverse impact on the sector, to the detriment of certain national markets as compared with others. 22 – In Recital 31 in the preamble to the ‘authorisation directive’ it is stated that administrative charges imposed by the Member States should not distort competition or create barriers for entry into the market. 23 – The earliest cases include Joined Cases 17/61 and 20/61 Klöckner-Werge and Others [1962] ECR 325, in particular at 345; see, more recently, Case C-351/98 Spain v Commission [2002] ECR I-8031, paragraph 57, and Case C-462/99 Connect Austria [2003] ECR I-5197, paragraph 115, to which I shall refer again later. 24 – Having regard to those parameters, the Court ruled that Articles 9(2) and 11(2) of the Directive do not preclude national legislation under which additional frequencies in the DCS 1800 frequency band may be allocated to a public undertaking in a dominant position which already holds a GSM 900 licence, without imposing a distinct fee on it, whereas an undertaking which starts to operate on the market in question has to pay a fee to acquire a DCS 1800 licence, provided that the charge imposed on the former for its GSM 900 licence, including the subsequent allocation, without further payment, of additional frequencies in the DCS 1800 frequency band appears to be equivalent in economic terms to the fee imposed on the competitor (paragraph 118). 25 – According to the Community case-law, an undertaking holds a dominant position where it has the capacity to hinder competition in a given market, and to act independently of its competitors, its customers and, ultimately, of consumers (Case 85/76 Hoffmann-La Roche [1979] ECR 461, paragraph 38; Case 31/80 L’Oréal [1980] ECR 3775; and Case 322/81 Michelin [1983] ECR 3641, paragraph 30). 26 – It should be borne in mind that, as a result of the grant of significantly fewer numbers (230 000) and the withholding of 21 000 numbers, Firma was obliged to pay a charge of DEM 2 308 250 (EUR 1 154 125). The charge corresponding to the 400 million numbers allocated to Deutsche Telekom would be equivalent to DEM 400 000 000 (EUR 200 000 000). 27 – In paragraphs 85 and 86 of Connect Austria, it is stated that the fact that an undertaking starting operations must pay a charge for the grant of a licence whereas a public undertaking in a dominant position can obtain one without payment constitutes an advantage vis-à-vis the latter’s competitors which enables it to increase its dominance by offering reduced rates of charges. 28 – In paragraph 4 of the first ground of the order for reference in this case, it is stated that ‘although the framer of the regulation assumed that Deutsche Telekom AG would have to pay fees amounting to around DEM 386 000 000 for the stock of telephone numbers it had taken over, it cannot be required to do so because at no time has it lodged an application for allocation of the telephone numbers in question and only a decision on such an application gives rise to the obligation to pay’. 29 – M. Wissmann (editor), in Telekommunikationsrecht, Heidelberg, 2003, pp. 351 and 1219, refers to the legal uncertainty prevailing in Germany as to the economic evaluation of the stock of numbers held by Deutsche Telekom. There is discussion in the legal literature and case-law as to the possibility of requiring it to pay a charge for the grant of those numbers prior to 1 August 1996, it being argued that the precise purpose of the TKG was to establish a level playing field. It is also contended that that company should not secure an advantage from the earlier creation of a monopoly within a closed market. The contrary view focuses on the fact that the transfer took place in the light of the legal situation then prevailing and of the distribution of competences between the Bundesministerium für Post und Telekommunikationen (Federal Ministry of Telecommunications and Post), Deutsche Telekom and its predecessor. 30 – The point of departure was Commission Directive 90/388/EEC of 28 June 1990 on competition in the markets for telecommunications services (OJ 1990 L 192, p. 10). The first amendment was made by Commission Directive 94/46/EC of 13 October 1994 in particular with regard to satellite communications (OJ 1994 L 268, p. 15). Commission Directive 95/51/EC of 18 October 1995 (OJ 1995 L 256, p. 49) abolished the restrictions on the use of cable television networks for the provision of already liberalised telecommunications services. In the same year, Directive 95/62/EC of the European Parliament and of the Council of 13 December 1995 (OJ 1995 L 321, p. 6) laid down the conditions for opening up of the fixed voice telephony market. Directive 90/388 was amended again by Commission Directive 96/2/EC of 16 January 1996 (OJ L 20, p. 59) to bring within its scope mobile and personal communications. Commission Directive 96/19/EC of 13 March 1996 (OJ 1996 L 74, p. 13) amended the 1990 measure to promote the implementation of full competition in telecommunications markets. The latest change was made by Commission Directive 1999/64/EC of 23 June 1999 (OJ 1999 L 175, p. 39), the aim of which was to ensure that telecommunications networks and cable TV networks owned by a single operator were separate legal entities. Part of the earlier legislation was repealed and replaced by Commission Directive 2002/77/EC of 16 September 2002 on competition in the markets for electronic communications networks and services (OJ 2002 L 249, p. 21). 31 – It is difficult to consider as a burden the taking over of 80 000 civil servants, unless the hackneyed idea that they are pampered, ill-prepared and of low efficiency is accepted, as embodied in the literature of the nineteenth century, where one of many examples is that given by Anton Chekhov in his story Ward No 6, in which Andrei Yefimitch laments: ‘I serve in a pernicious institution and receive a salary from people whom I am deceiving. I am not honest, but then, I of myself am nothing, I am only part of an inevitable social evil: all local officials are pernicious and receive their salary for doing nothing’ (English translation by Constance Garnett). 32 – In its judgment in Albacom and Infostrada, the Court of Justice stated that the text of Article 11(2) of the Directive must be restrictively interpreted. 33 – In the Communication cited in footnote 6, the Commission appreciates that the requirement of advance authorisation may become an unjustified obstacle owing to the rules and slow and pointlessly laborious administrative procedures. It also mentions the need for the fiscal charges to be reduced (pp. 25 and 26). If the facts of the cases before the national court are analysed carefully, it will be seen, as I have pointed out, that the charge at issue is 15 times higher than the costs of the activity carried on. 34 – A. Heffermann, in Telekommunikationsrecht, Liberalisierung und Wettbewerb, Vienna, 2002, p. 91, states that the competition rules have become very important as a result of the consolidation of market forces following liberalisation of the sector, a fact which in his view is particularly noteworthy owing to the present dominant position of the former State monopolies, as has become apparent in the present proceedings. 35 – See M. Möstl, ‘Lizenzgebühren im Bereich von Post und Telekommunikation’ in Neue Zeitschrift für Verwaltungsgerecht 2001, p. 738. 36 – See M. Wissmann (editor), op. cit., pp. 326 and 1196.