Judgment — ECLI:EU:C:2014:2009
Date: 2014-06-19
Language of the case: Danish
Court formation: Third Chamber
Subject matter: Telecommunications
Procedure: Reference for a preliminary ruling
Origin: Denmark

Summary 32. On the basis of the foregoing considerations, I consider that the obligation to install a drop cable, at the request of a competing operator, with a maximum length of 30 metres, can be regarded as one of the obligations to act that Articles 8 and 12 of Directive 2002/19 permit national regulatory authorities to impose on an operator with significant market power. This obligation is consistent not only with the objective of providing ‘access’ to the fibre network in question, but also with that of ensuring adequate conditions of competition between all operators in the market. 33. My first, intermediate conclusion is that on a proper construction of Article 2(a), and in particular of Articles 8 and 12, of Directive 2002/19, an obligation to ensure ‘access’ to telecommunications networks may include, in principle and subject to the principle of proportionality, an obligation to install a drop cable, on request of a competing operator, with a maximum length of 30 metres. I shall discuss the circumstances to be taken into account in determining the issue of proportionality in the course of considering how the third and fourth questions are to be answered. B – The third and fourth questions referred 34. By the third and fourth questions in the order for reference, the Østre Landsret expresses its doubts as regards the effect that, firstly, the fact that the cost of the obligation is higher than the investment made and, secondly, the existence of a price control system that allows TDC to recover the installation costs, may have on the legality of the obligation imposed on TDC. 35. Although the referring court divides the two circumstances referred to into two separate questions, they have a common effect on the legality of the measure. That is to say, both circumstances are relevant to whether the obligation imposed on TDC is proportionate. 36. Indeed, when referring to the obligations national regulatory authorities may impose, Article 8(4) of Directive 2002/19 states that such measures ‘shall be based on the nature of the problem identified, proportionate and justified in the light of the objectives laid down in Article 8 of Directive 2002/21/EC’. The objectives of this provision include, among others, consumer protection, the provision of a universal service and ensuring network integrity. (15) 37. Looking at the questions of the national court from that angle, it may be observed that Article 12 requires national regulatory authorities to impose on operators only such obligation as are ‘reasonable’, and at all events to take into account various factors, including the initial investment by the owner of the facilities. Article 13 of the Directive then focuses on the price control obligations that national regulatory authorities may impose on operators. Article 13(1) states that ‘to encourage investments by the operator, including in next generation networks, national regulatory authorities shall take into account the investment made by the operator, and allow him a reasonable rate of return on adequate capital employed’. However, Article 13(2) adds that any cost recovery mechanism or pricing methodology that is mandated serves, ‘to promote efficiency and sustainable competition and maximise consumer benefits.’ 38. It follows that the proportionality of the obligation imposed on the operator depends on the initial investment made by the owner of the facilities and on the existence of pricing methodology, among other things. However, this does not by any means imply that such circumstances automatically determine the appraisal of proportionality. What the Directive does require of the national regulatory authorities is that they should make an assessment in which these and other factors come into play. Therefore, the initial investment and pricing methodology are important factors in assessing the proportionality of the measure, but the lack of them can be compensated by the existence of other factors that in the end make the obligation a proportionate measure. 39. In any case, this is to be assessed by the national court and not the Court. It is obviously an appraisal that involves analysis of facts that do not fall within the scope of preliminary ruling proceedings such as these. At the very most, the Court must provide the interpretative guidance necessary to enable the national court to make that appraisal of proportionality. 40. Although the Court, in interpreting Directive 2002/19, has previously had occasion to stress the importance of the obligations imposed on operators being proportionate, (16) it has also emphasised the ‘wide powers of intervention’ of the national regulatory authorities. (17) Therefore, the interpretation of Articles 8 and 12 of Directive 2002/19, and specifically the review of proportionality they require, must take as its starting-point the premise that national regulatory authorities have considerable leeway when imposing the obligations they consider necessary on operators in the market and, in particular, on the most important operators. 41. Then, the referring court must consider whether the objectives pursued by the measure of the national regulatory authorities are consistent with the objectives set out both in Article 8 of Directive 2002/21 and in Directive 2002/19, which include ensuring access of operators to telecommunications networks, maintaining effective competition between operators, and quality of service to end-users. 42. If the objectives of the measure accord with those set out in European law, the next step is to assess whether the measure is suitable, necessary, and proportionate in the strict sense of the measure. The first check assesses whether the measure adopted is objectively suitable to achieve the objectives pursued. The second assesses whether those objectives could be achieved by less restrictive means. Finally, proportionality in the narrow sense calls for weighing up the rights and interests involved. 43. It is precisely at the last stage, the third step of the assessment of proportionality, that the national court must determine whether the national regulatory authorities have properly weighed the burden imposed by the measure against the benefits obtained from it. At that stage, of particular importance are, on the one hand, the assessment of the cost of the investment made by TDC and, on the other, the existence of a pricing methodology that allows the operator to recover his investment despite the obligation imposed. 44. Obviously, it is for the national court to make this assessment, having regard, however, to the interpretative criteria set out above. 45. My second, intermediate conclusion is that, when imposing an obligation pursuant to Articles 8 and 12 of Directive 2002/19, the national regulatory authorities must take into account both the initial investment made by the party on which the obligation is imposed and the existence of a pricing methodology allowing the operator to recover his investment. However, it is important to recall that these factors must be assessed as part of an assessment of proportionality which, taking into account other factors, allows the national regulatory authorities to make a proportionate decision. V – Conclusion 46. For the foregoing reasons, I propose that the Court answer the questions referred by the Østre Landsret as follows: Articles 2(a), 8 and 12, in conjunction with Article 13, of Directive 2002/19/EC of the European Parliament and of the Council of 7 March 2002 on access to, and interconnection of, electronic communications networks and associated facilities, as amended by Directive 2009/140/EC of the European Parliament and of the Council of 25 November 2009, are to be interpreted as including, among the obligations concerning access to specific network facilities, the obligation that the operator of a fibre network who has significant market power should, at the request of a competing operator, install a drop cable with a maximum length of 30 metres. To that end, national regulatory authorities must take into account both the initial investment made by the party on which the obligation is imposed and the existence of a pricing methodology allowing the operator to recover his investment. The national court must determine, as part of a proportionality assessment, whether the national regulatory authorities has complied with these requirements. 1 – Original language: Spanish. 2 – Directive of the European Parliament and of the Council of 7 March 2002 on access to, and interconnection of, electronic communications networks and associated facilities (OJ 2002 L 108, p. 7), as amended by Directive 2009/140/EC of the European Parliament and of the Council of 25 November 2009 amending 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 associated facilities, and 2002/20/EC on the authorisation of electronic communications networks and services (OJ 2009 L 337, p. 37). 3 – Recital 3 in the preamble to the Directive. 4 – Emphasis added. 5 – Emphasis added. 6 – Article 12(1)(a). 7 – Article 12(1)(b). 8 – Article 12(1)(d). 9 – Article 12(1)(g). 10 – Article 12(1) subparagraph 3. 11 – Article 12(2)(a). 12 – Article 12(2)(c). 13 – Article 12(2)(d). 14 – Recital 5. 15 – Among other objectives, this provision also desiderates supporting people with disabilities and senior citizens (paragraph 2(a)); preventing distortion and restriction of competition in the electronic communications sector (paragraph 2(b)); encouraging the efficient use and ensuring the effective management of radio frequencies and numbering resources (paragraph 2(d)); removing obstacles to the provision of electronic communications networks, associated facilities and services, and electronic communications services at European level (paragraph 3(a)); and encouraging the establishment and development of trans-European networks and the interoperability of pan-European services and end-to-end connectivity (paragraph 3(b)). 16 – See Case C‑227/07 Commission v Poland [2008] ECR I‑8403, paragraph 63, referring to Case C‑380/05 Centro Europa 7 [2008] ECR I‑349, paragraph 81. 17 – Commission v Poland (cited above, note 16), paragraph 66.