1988L0301 — EN — 08.11.1994 — 001.001 — 1
This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B COMMISSION DIRECTIVE
of 16May 1988
on competition in the markets in telecommunications terminal equipment
(88/301/EEC)
(OJ L 131, 27.5.1988, p. 73)
Amended by:
Official Journal
No page date
►M1 Commission Directive 94/46/EC of 13 October 1994 L 268 15 19.10.1994
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COMMISSION DIRECTIVE
of 16May 1988
on competition in the markets in telecommunications terminal
equipment
(88/301/EEC)
THE COMMISSION OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic
Community, and in particular Article 90 (3) thereof,
Whereas:
1. In all the Member States, telecommunications are, either wholly
or partly, a State monopoly generally granted in the form ofspecial or exclusive rights to one or more bodies responsible forproviding and operating the network infrastructure and relatedservices. Those rights, however, often go beyond the provision ofnetwork utilization services and extend to the supply of user
terminal equipment for connection to the network. The last
decades have seen considerable technical developments innetworks, and the pace of development has been especiallystriking in the area of terminal equipment.
2. Several Member States have, in response to technical andeconomic developments, reviewed their grant of special orexclusive rights in the telecommunications sector. The prolifera-tion of types of terminal equipment and the possibility of themultiple use of terminals means that users must be allowed a free
choice between the various types of equipment available if they
are to benefit fully from the technological advances made in thesector.
3. Article 30 of the Treaty prohibits quantitative restrictions onimports from other Member States and all measures having
equivalent effect. The grant of special or exclusive rights to
import and market goods to one organization can, and often does,lead to restrictions on imports from other Member States.
4. Article 37 of the Treaty states that ‘Member States shall
progressively adjust any State monopolies of a commercial
character so as to ensure that when the transitional period hasended no discrimination regarding the conditions under whichgoods are procured and marketed exists between nationals ofMember States.
The provisions of this Article shall apply to any body through
which a Member State, in law or in fact, either directly or
indirectly supervises, determines or appreciably influences
imports or exports between Member States. These provisionsshall likewise apply to monopolies delegated by the State toothers.' Paragraph 2 of Article 37 prohibits Member States fromintroducing any new measure contrary to the principles laid downin Article 37 (1).
5. The special or exclusive rights relating to terminal equipmentenjoyed by national telecommunications monopolies are exer-cised in such a way as, in practice, to disadvantage equipmentfrom other Member States, notably by preventing users from
freely choosing the equipment that best suits their needs in terms
of price and quality, regardless of its origin. The exercise of theserights is therefore not compatible with Article 37 in all theMember States except Spain and Portugal, where the nationalmonopolies are to be adjusted progressively before the end of the
transitional period provided for by the Act of Accession.
6. The provision of installation and maintenance services is a key
factor in the purchasing or rental of terminal equipment. Theretention of exclusive rights in this field would be tantamount toretention of exclusive marketing rights. Such rights must therefore1988L0301 — EN — 08.11.1994 — 001.001 — 2
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also be abolished if the abolition of exclusive importing and
marketing rights is to have any practical effect.
7. Article 59 of the Treaty provides that ‘restrictions on freedom toprovide services within the Community shall be progressivelyabolished during the transitional period in respect of nationals ofMember States who are established in a State of the Communityother than that of the person for whom the services are intended.’
Maintenance of terminals is a service within the meaning of
Article 60 of the Treaty. As the transitional period has ended, theservice in question, which cannot from a commercial point ofview be dissociated from the marketing of the terminals, must beprovided freely and in particular when provided by qualified
operators.
8. Article 90 (1) of the Treaty provides that ‘in the case of public
undertakings and undertakings to which Member States grantspecial or exclusive rights, Member States shall neither enact normaintain in force any measure contrary to the rules contained in
this Treaty, in particular to those rules provided for in Article 7
and Articles 85 to 94.’
9. The market in terminal equipment is still as a rule governed by asystem which allows competition in the common market to be
distorted; this situation continues to produce infringements of the
competition rules laid down by the Treaty and to affect adverselythe development of trade to such an extent as would be contraryto the interests of the Community. Stronger competition in theterminal equipment market requires the introduction of trans-
parent technical specifications and type-approval procedures
which meet the essential requirements mentioned in CouncilDirective 86/361/EEC (
1) and allow the free movement of
terminal equipment. In turn, such transparency necessarily entailsthe publication of technical specifications and type-approvalprocedures. To ensure that the latter are applied transparently,
objectively and without discrimination, the drawing-up and
application of such rules should be entrusted to bodiesindependent of competitors in the market in question. It isessential that the specifications and type-approval procedures arepublished simultaneously and in an orderly fashion. Simultaneouspublication will also ensure that behaviour contrary to the Treaty
is avoided. Such simultaneous, orderly publication can be
achieved only by means of a legal instrument that is binding onall the Member States. The most appropriate instrument to thisend is a directive.
10. The Treaty entrusts the Commission with very clear tasks andgives it specific powers with regard to the monitoring of relationsbetween the Member States and their public undertakings andenterprises to which they have delegated special or exclusiverights, in particular as regards the elimination of quantitative
restrictions and measures having equivalent effect, discrimination
between nationals of Member States, and competition. The onlyinstrument, therefore, by which the Commission can efficientlycarry out the tasks and powers assigned to it, is a Directive basedon Article 90 (3).
11. Telecommunications bodies or enterprises are undertakingswithin the meaning of Article 90 (1) because they carry on anorganized business activity involving the production of goods orservices. They are either public undertakings or privateenterprises to which the Member States have granted special or
exclusive rights for the importation, marketing, connection,
bringing into service of telecommunications terminal equipmentand/or maintenance of such equipment. The grant and main-tenance of special and exclusive rights for terminal equipmentconstitute measures within the meaning of that Article. Theconditions for applying the exception of Article 90 (2) are not1988L0301 — EN — 08.11.1994 — 001.001 — 3
(1) OJ No L 217, 5. 8. 1986, p. 21.
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fulfilled. Even if the provision of a telecommunications network
for the use of the general public is a service of general economicinterest entrusted by the State to the telecommunications bodies,
the abolition of their special or exclusive rights to import and
market terminal equipment would not obstruct, in law or in fact,the performance of that service. This is all the more true giventhat Member States are entitled to subject terminal equipment totype-approval procedures to ensure that they conform to the
essential requirements.
12. Article 86 of the Treaty prohibits as incompatible with the
common market any conduct by one or more undertakings thatinvolves an abuse of a dominant position within the common
market or a substantial part of it.
13. The telecommunications bodies hold individually or jointly a
monopoly on their national telecommunications network. Thenational networks are markets. Therefore, the bodies each
individually or jointly hold a dominant position in a substantial
part of the market in question within the meaning of Article 86.
The effect of the special or exclusive rights granted to such bodies
by the State to import and market terminal equipment is to:
— restrict users to renting such equipment, when it would often
be cheaper for them, at least in the long term, to purchase this
equipment. This effectively makes contracts for the use ofnetworks subject to acceptance by the user of additionalservices which have no connection with the subject of thecontracts,
— limit outlets and impede technical progress since the range of
equipment offered by the telecommunications bodies isnecessarily limited and will not be the best available to
meet the requirements of a significant proportion of users.
Such conduct is expressly prohibited by Article 86 (d) and (b),
and is likely significantly to affect trade between Member States.
At all events, such special or exclusive rights in regard to the
terminal equipment market give rise to a situation which iscontrary to the objective of Article 3 (f) of the Treaty, whichprovides for the institution of a system ensuring that competition
in the common market is not distorted, and requires a fortiori that
competition must not be eliminated. Member States have anobligation under Article 5 of the Treaty to abstain from anymeasure which could jeopardize the attainment of the objectivesof the Treaty, including Article 3 (f).
The exclusive rights to import and market terminal equipment
must therefore be regarded as incompatible with Article 86 in
conjunction with Article 3, and the grant or maintenance of suchrights by a Member State is prohibited under Article 90 (1).
14. To enable users to have access to the terminal equipment of their
choice, it is necessary to know and make transparent the
characteristics of the termination points of the network to whichthe terminal equipment is to be connected. Member States musttherefore ensure that the characteristics are published and thatusers have access to termination points.
15. To be able to market their products, manufacturers of terminalequipment must know what technical specifications they mustsatisfy. Member States should therefore formalize and publish thespecifications and type-approval rules, which they must notify to
the Commission in draft form, in accordance with Council
Directive 83/189/EEC (
1). The specifications may be extended to
products imported from other Member States only insofar as theyare necessary to ensure conformity with the essential require-ments specified in Article 2 (17) of Directive 86/361/EEC thatcan legitimately be required under Community law. Member1988L0301 — EN — 08.11.1994 — 001.001 — 4
(1) OJ No L 109, 28. 3. 1983, p. 8.
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States must, in any event, comply with Articles 30 and 36 of the
Treaty, under which an importing Member State must allowterminal equipment legally manufactured and marketed in another
Member State to be imported on to its territory, and may only
subject it to such type-approval and possibly refuse approval forreasons concerning conformity with the abovementioned essentialrequirements.
16. The immediate publication of these specifications and procedurescannot be considered in view of their complexity. On the other
hand, effective competition is not possible without such
publication, since potential competitors of the bodies orenterprises with special or exclusive rights are unaware of theprecise specifications with which their terminal equipment mustcomply and of the terms of the type-approval procedures andhence their cost and duration. A deadline should therefore be set
for the publication of specifications and the type-approval
procedures. A period of two-and-a-half years will also enablethe telecommunications bodies with special or exclusive rights toadjust to the new market conditions and will enable economicoperators, especially small and medium-sized enterprises, to adapt
to the new competitive environment.
17. Monitoring of type-approval specifications and rules cannot beentrusted to a competitor in the terminal equipment market in
view of the obvious conflict of interest. Member States shouldtherefore ensure that the responsibility for drawing up type-approval specifications and rules is assigned to a bodyindependent of the operator of the network and of any other
competitor in the market for terminals.
18. The holders of special or exclusive rights in the terminal
equipment in question have been able to impose on theircustomers long-term contracts preventing the introduction offree competition from having a practical effect within a reason-able period. Users must therefore be given the right to obtain arevision of the duration of their contracts,
HAS ADOPTED THIS DIRECTIVE:
Article 1
For the purposes of this Directive:
— ‘terminal equipment’ means equipment directly or indirectly
connected to the termination of a public telecommunicationsnetwork to send, process or receive information. A connection isindirect if equipment is placed between the terminal and thetermination of the network. In either case (direct or indirect), theconnection may be made by wire, optical fibre or electromagneti-
cally.
►
M1Terminal equipment also means satellite earth station
equipment ◄,
— ‘undertaking’ means a public or private body, to which a Member
State grants special or exclusive rights for the importation,
marketing, connection, bringing into service of telecommunicationsterminal equipment and/or maintenance of such equipment,
— ‘special rights’ means rights that are granted by a Member State to a
limited number of undertakings, through any legislative, regulatoryor administrative instrument, which, within a given geographicalarea,
— limits to two or more the number of such undertakings, otherwise
than according t objective, proportional and non-discriminatory
criteria, or
— designates, otherwise than according to such criteria, several
competing undertakings, or
— confers on any undertaking or undertakings, otherwise than
according to such criteria, any legal or regulatory advantages1988L0301 — EN — 08.11.1994 — 001.001 — 5
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which substantially affect the ability of any other undertaking to
import, market, connect, bring into service and/or maintaintelecommunication terminal equipment in the same geographical
area under substantially equivalent conditions,
— ‘satellite earth station equipment’ means equipment which is capable
of being used for the transmission only, or for the transmission andreception (‘transmit/receive’), or for the reception only (‘receive-only’) of radiocommunication signals by means of satellites or otherspace-based systems.
Article 2
Member States which habe granted special or exclusive rights to
undertakings shall ensure that all exclusive rights are withdrawn, as well
as those special rights which
(a) limit two or more the number of undertakings within the meaning of
Article 1, otherwise than according to objective, proportional andnon-discriminatory criteria, or
(b) designate, otherwise than according to such criteria, several
competing undertakings within the meaning of Article 1.
They shall, not later than three months following the notification of this
Directive, inform the Commission of the measures taken or draftlegislation introduced to that end.
Article 3
Member States shall ensure that economic operators have the right to
import, market, connect, bring into service and maintain terminal
equipment. However, Member States may:
— in the case of satellite earth station equipment, refuse to allow such
equipment to be connected to the public telecommunicationsnetwork and/or to be brought into service where it does not satisfythe relevant common technical regulations adopted in pursuance ofCouncil Directive 93/97/EEC (
1) or, in the absence thereof, the
essential requirements laid down in Article 4 of that Directive. In the
absence of common technical rules of harmonized regulatory
conditions, national rules shall be proportionate to those essentialrequirements and shall be notified to the Commission in pursuanceof Directive 83/189/EEC where that Directive so requires,
— in the case of other terminal equipment, refuse to allow such
equipment to be connected to the public telecommunicationsnetwork where it does not satisfy the relevant common technical
regulations adopted in pursuance of Council Directive 91/263/
EEC (
2) or, in the absence thereof, the essential requirements laid
down in Article 4 of that Directive,
— require economic operators to possess the technical qualifications
needed to connect, bring into service and maintain terminalequipment on the basis of objective, non-discriminatory and publicly
available criteria.
Article 4
Member States shall ensure that users have access to new public network
termination points and that the physical characteristics of these pointsare published not later than 31 December 1988.1988L0301 — EN — 08.11.1994 — 001.001 — 6
(1) OJ No L 290, 24. 11. 1993, p. 1.
(2) OJ No L 128, 23. 5. 1991, p. 1.▼B
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Access to public network termination points existing at 31 December
1988 shall be given within a reasonable period to any user who sorequests.
Article 5
1. Member States shall, not later than the date mentioned in Article 2,
communicate to the Commission a list of all technical specifications andtype-approval procedures which are used for terminal equipment, and
shall provide the publication references.
Where they have not as yet been published in a Member State, the latter
shall ensure that they are published not later than the dates referred to inArticle 8.
2. Member States shall ensure that all other specifications and type-
approval procedures for terminal equipment are formalized andpublished. Member States shall communicate the technical specifica-tions and type-approval procedures in draft form to the Commission inaccordance with Directive 83/189/EEC and according to the timetable
set out in Article 8.
Article 6
Member States shall ensure that, from 1 July 1989, responsibility for
drawing up the specifications referred to in Article 5, monitoring theirapplication and granting type-approval is entrusted to a body
independent of public or private undertakings offering goods and/or
services in the telecommunications sector.
Article 7
Member States shall take the necessary steps to ensure that undertakings
within the meaning of Article 1 make it possible for their customers to
terminate, with maximum notice of one year, leasing or maintenancecontracts which concern terminal equipment subject to exclusive orspecial rights at the time of the conclusion of the contracts.
For terminal equipment requiring type-approval, Member States shall
ensure that this possibility of termination is afforded by the undertakings
in question no later than the dates provided for in Article 8. For terminalequipment not requiring type-approval, Member States shall introducethis possibility no later than the date provided for in Article 2.
Article 8
Member States shall inform the Commission of the draft technical
specifications and type-approval procedures referred to in Article 5 (2);
— not later than 31 December 1988 in respect of equipment in category
A of the list in Annex I,
— not later than 30 September 1989 in respect of equipment in category
B of the list in Annex I,
— not later than 30 June 1990 in respect of other terminal equipment in
category C of the list in Annex I.
Member States shall bring these specifications and type-approval
procedures into force after expiry of the procedure provided for byDirective 83/189/EEC.
Article 9
Member States shall provide the Commission at the end of each year
with a report allowing it to monitor compliance with the provisions ofArticles 2, 3, 4, 6 and 7.
An outline of the report is attached as Annex II.1988L0301 — EN — 08.11.1994 — 001.001 — 7
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Article 10
The provisions of this Directive shall be without prejudice to the
provisions of the instruments of accession of Spain and Portugal, and in
particular Articles 48 and 208 of the Act of Accession.
Article 11
This Directive is addressed to the Member States.1988L0301 — EN — 08.11.1994 — 001.001 — 8
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ANNEX I
List of terminal equipment referred to in Article 8
Category
Additional telephone set; private automatic branch exchanges
(PABXs):A
Modems: A
Telex terminals: BData-transmission terminals: B
Mobile telephones: B
Receive-only satellite stations not reconnected to the public network
of a Member State:B
First telephone set: C
Other terminal equipment: C1988L0301 — EN — 08.11.1994 — 001.001 — 9
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ANNEX II
Outline of the report provided for in Article 9
Implementation of Article 2
1. Terminal equipement for which legislation is being or has been modified.
By category of terminal equipment:
— date of adoption of the measure or,
— date of introduction of the bill or,— date of entry into force of the measure.
2. Terminal equipment still subject to special or exclusive rights:
— type of terminal equipment and rights concerned.
Implementation of Article 3
— terminal equipment, the connection and/or commissioning of which has been
restricted,
— technical qualifications required, giving reference of their publication.
Implementation of Article 4
— references of publications in which the physical characteristics are specified,
— number of existing network termination points,— number of network termination points now accessible.
Implementation of Article 6
— independent body or bodies appointed.
Implementation of Article 7
— measures put into force, and
— number of terminated contracts.1988L0301 — EN — 08.11.1994 — 001.001 — 10