COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 04.04.1995 
COM(95) 113 final 
COMMUNICATION BY THE COMMISSION 
TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 
ON THE STATUS AND IMPLEMENTATION OF 
DIRECTIVE 90/388/EEC 
ON COMPETITION IN THE MARKETS FOR 
TELECOMMUNICATIONS SERVICES 
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CONTENTS 
Preface and Summary 
I INTRODUCTION 
The Purpose 
The Context 
II CURRENT STATUS OF IMPLEMENTATION 
General Comment 
Formal Procedures 
Extension to the European Economic Area, Europe and Interim Agreements 
III SPECIFIC IMPLEMENTATION ISSUES 
a) General issues related to Voice Service 
b) Enforcement of the Voice Telephony Monopoly in a Competitive Environment 
c) Closed User Groups and Corporate Networks 
d) Data Services For the Public 
e) The Separation of Operation and Regulation 
IV INCLUSION OF SATELLITE NETWORKS AND SERVICES 
(DIRECTIVE 94/46/EC) 
a) The significance of the amendment 
b) Issues related to Voice Services 
c) Broadcasting Services 
d) Access to Space Segment 
e) International Satellite Organisations 
f) Timetable for Implementation 
V FUTURE OUTLOOK / PREPARATION FOR 1998 
VI CONCLUSION 
ANNEX I : Member State implementation of Directive 90/388/EEC 
ANNEX II : List of National Regulatory Authorities 
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Preface 
The European Union is going through a process of rapid adaptation to the realities of the 
coming information society. Digital technology is transforming the telecommunications, 
computer, information and audio-visual industries. The information society is beginning to 
have a profound effect on the economy and the way we work, live, and play. It influences 
the way we do business, the way we organise ourselves and the way we interact. 
The report "Europe and the Global Information Society", as established according to the 
request by the European Council has given full consideration to this basic change and 
proposed a comprehensive framework. In response, the European Heads of States at 
Corfu confirmed this analysis and called for the definition of a clear and stable regulatory 
environment for further development. 
The changes are global. They effect not only Europe and its principal economic 
competitors, but the very nature of that economic competition itself. Competing 
effectively today demands the means to access, process, manipulate, stock and produce 
information, both quickly and efficiently. 
In an increasingly global economy it is vital that European firms are able to maintain and 
reinforce their competitiveness, not only in existing markets, but to take advantage of new 
opportunities and win new markets. To do so they must be allowed to benefit from the 
widespread diffusion and integration into production processes of new information 
technology. Naturally, by stimulating economic growth, competitiveness contributes to job 
creation. 
Technological progress and innovation brings with it the opportunity to offer users an 
increasing choice of services and applications, of superior performance and better suited to 
their particular demands. This is not only an advantage for business. For domestic users 
this means the possibility of direct access on demand of new services and entertainment, 
which are not only received by the customer, but also interacted with. 
At the same time special regard must be given to employment aspects in the sector. As set 
out in the Green Paper on the liberalisation of telecommunications infrastructure and cable 
television networks (COM(94)440final and 682final) increased competitiveness will impact 
employment, both safeguarding jobs which would otherwise have been lost and allowing 
new jobs to be created as European companies benefit from the competitive advantage 
derived from new telecommunications technologies and services. Particularly important in 
employment terms will be the effects of the new technologies in small and medium sized 
enterprises - traditionally the principle source of employment generation in Europe. 
Experience shows that potential job reductions are offset by new job creation, and that 
overall telecommunication employment has not been impaired by liberalisation. It will be 
important for the further development that the social dialogue in the sector is intensified. 
The Commission has launched a major study which should give a firmer quantitative basis 
for assessing the extent to which competition is creating new job opportunities. 
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These issues will also be studied and discussed in depth within the framework of the new 
advisory group on information society recently launched by the Commission, i.e. the 
Information Society Forum and the High Level Group of Experts on the Social and 
Societal aspects of the Information Society. 
The Action Plan published by the Commission in response to the conclusions of the 
Corfu summit and the report on Europe and the Global Information Society ("Europe's 
Way to the Information Society", Communication of the Commission of 19 July 1994) 
emphasized the need for continued and accelerated liberalisation of telecommunications. 
Within this context, the Council Resolution 93/C 213/01 of 22 July 1993 on the further 
development of the telecommunications market sets the basic framework for the evolution 
of the regulatory environment in the European Union and has established 1 January 1998 
as the date for full liberalisation (with additional transition periods for certain Member 
States). The Resolution has emphasized the importance of ensuring full implementation of 
existing legislation, as well as further evolution of this framework in preparation for 1 
January 1998. On 22 December 1994, the Council adopted Resolution 94/C 379/03 
extending the principle of liberalisation and the agreed timetable for services to the 
liberalisation of the underlying network infrastructures, over which such services are 
carried. 
• - 5 -
Commission Directive 90/388/EEC on competition in the markets for telecommunications 
services has been at the core of EU telecommunications liberalisation to date. It is, and 
will continue to be, at the centre of the reform process which is now centred on the 
deadline set by the Council of 1998 for liberalisation of all telecommunications services 
and the infrastructure over which it is carried and for which, according to the Council 
Resolutions mentioned, proposals and measures for the corresponding regulatory 
framework must be made before 1 January 1996. It also represents the framework within 
which the Commission is responding to requests for earlier action to lift the restrictions 
which are causing bottle-necks in the provision of infrastructure for the services currently 
already liberalised according to the Directive. In this framework, the Commission adopted 
on 13th October 1994 an amendment Directive drawing satellite networks and services 
into the framework of the Directive. Furthermore, on 21st December 1994 a draft 
amendment Directive was adopted by the Commission for consultation regarding the use 
of Cable-Television networks for the provision of such services. 
The Council Resolution of 22nd July 1993 emphasized that "there is a need for rapid and 
effective implementation of the current regulatory environment, in particular Directive 
90/388/EEC". At the same time, the Directive required that the effects of certain measures 
must be assessed by the Commission during 1994. The Commission therefore considers it 
appropriate to submit at this stage this Communication on the general progress made with 
regard to the implementation of the objectives of the Directive to the European 
Parliament and the Council. 
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Summary 
Section I outlines the purpose of the Communication and sets it in the context of the past, 
current and future regulatory environment. 
Section II represents a general comment on the progress achieved by the Member States in 
implementing Directive 90/388. It includes a list of the main elements which have been 
monitored and reviewed by the Commission and against which progress is measured. 
Section III explains and clarifies some particular implementation issues which have arisen 
over the past four years. These fall into three main areas: voice services for closed user 
groups and corporate networks, data services for the public and the separation of operation 
and regulation. 
Section IV describes the recent inclusion of satellite networks and services into the framework 
of the Directive, by way of the amending Directive 94/46/EC. 
Section V explores the future outlook for the Directive and its implementation. It sets it in 
the broader context of full services and infrastructure liberalisation and, in particular, the 
preparation for the 1998 deadline. 
Section VI draws together the Commission's conclusions on the implementation of the 
Directive and the implications for EU telecommunications policy in general. 
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I INTRODUCTION 
The Purpose 
Commission Directive 90/388 was published on 28 June, 1990 (hereafter referred to as either 
"the Services Directive" or "the Directive"). It has come to be identified as a cornerstone of 
the EU framework for liberalising the European telecommunications market. The Council, 
in its Resolution of 22 July 19931 emphasised the importance of rapid implementation. The 
Resolution noted that "there is a need for rapid and effective implementation of the current 
regulatory environment, in particular Directive 90/388/EEC". 
It is within this context that the Commission submits this Communication on the status and 
implementation of the Directive2. 
The Communication has three related purposes3: 
i Description and explanation of the current state of implementation 
ii Identification and clarification of central issues 
iii Placing the Directive in the context of the package of reforms focused on the 1998 
deadline, according to the 1993 Council Resolution which "supports the Commission's 
intention to prepare, before 1 January 1996 the necessary amendments to the 
Community regulatory framework on order to achieve liberalisation of all public voice 
telephony services by 1 January 1998". 
The Context 
The Services Directive set down four dates by which specific provisions had to be 
implemented : 
o 31 December 1990, for the opening up to competition of telecommunications services 
other than voice telephony and the simple resale of capacity; 
Council Resolution 93/C231/01. 
This Communication does not cover related subjects of EU-telecommunication policy such as the 
application of Open Network Provision to leased lines. These subjects are covered extensively in 
other recent Communications. See Green Paper on the liberalisation of telecommunications 
infrastructure and cable television networks, Part I / II, COM(94)440 ; COM(94)682 and 
Communication on present status and future approach for open access to telecommunications 
networks and services (Open Network Provision), COM(94)513. 
It should be noted that this Communication does not replace in any way the formal procedures 
foreseen under the Treaty to ensure the full implementation of Community Law. 
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o 1 July 1991, for putting in place an independent body responsible for the granting of 
licences and the surveillance of usage conditions; 
o 30th June 1992, for the notification of any licensing or declaration procedures for the 
provision of packet- or circuit-switched data services for the public ; 
o 31 December 1992, for the opening up to competition of the simple resale of 
capacity4. 
Parliament Resolution A3-0113/93 of 20 April 1993 called on the Commission to prepare the 
liberalisation of both intra-Community as well as domestic voice telephony and to adopt as 
soon as possible the necessary measures to take full advantage of the potential of the existing 
infrastructure of cable networks for telecommunications services and to abolish without delay 
the existing restrictions on the use of cable networks for non-reserved services as well as to 
adopt measures to obtain optimum utilization of the cross-border telecommunications 
networks of railway operators and electricity producers5. 
Council Resolution 93/C213/01 set out a timetable for the development of telecommunications 
and confirmed the date of 
1 January 1998 for the liberalisation of voice telephony services for the general 
public6. 
On November 17 1994 the Council adopted a further Resolution confirming the date of 
1 January 1998 also for the liberalisation of telecommunications infrastructure.7 
Following the Commission's action plan of 19th July 1994, published under the title "Europe's 
way to the information society, an action plan"8, the Union is now profoundly engaged in the 
policy of implementing the information society. These Resolutions, the Conclusions of the 
European Council at Corfu9 as well as the communication by the Commission on the 
consultation on the Green Paper on Mobile and Personal communications10 and the results of 
the ongoing consultation on the Green Papers on Infrastructure (part I / II)11 will set a 
framework for carrying forward the further amendments to the services Directive towards the 
10 The Directive also foresaw the possibility of granting deferment, until 1 January 1996, of the date 
for prohibition on the simple resale of capacity in those Member States in which the network for the 
provision of the packet or circuit switched services was not yet sufficiently developed. 
OJ No C 150/42 of 31 May 93. 
Although some Member States with less developed networks (i.e. Spain, Ireland, Greece and 
Portugal) are granted an additional transition period of up to 5 years. Very small networks 
(Luxembourg) can also, where justified, be granted a period of up to two years. 
With derogations as above, see Council Resolution of 22nd December 1994 on the principles and 
timetable for the liberalisation of telecommunications infrastructures, (94/C 379/03) ; OJ C379/4, 
31.12.1994. 
COM(94) 347. 
Conclusions of the European Council, Corfu, 24-25 June 1994. 
Towards the personal Communications Environment : Green Paper on a common approach in the 
field of mobile and personal communications in the European Union (COM(94) 145 final). 
Op cit. 
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full liberalisation of the telecommunications sector. In this context, ongoing review of the 
actual situation in the Member States will be increasingly important in the years leading up 
to the deadline. 
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II CURRENT STATUS OF IMPLEMENTATION 
a) General Comment 
Member States were required to implement the provisions of the Directive and to 
communicate to the Commission the relevant measures adopted, by 31st December 1990, 1 
July 1991 and 31st December 199212. All Member States, but two, complied with the 
notification requirements13. In order to assess effective implementation of Directive 
90/388/EEC in the various Member States however, a checklist identifying the essential 
constituent elements was established. Although this does not represent an exhaustive list, 
progress in effective implementation can best be measured against the following issues:14 
Definition of "voice telephony" for which currently exclusive and special rights can 
still be maintained according to the provisions of the Directive15. 
Continuation of any other exclusive rights; 
Access by service providers to transmission/routing on PSTN and leased lines; 
Conditions imposed via any licensing or declaration scheme in existence; 
Transparency and openness of procedure for granting authorization. 
Conditions for simple resale of leased capacity for data communications; 
Notification (within deadline) of any special licensing regime regarding such resale; 
Justification of any special regime16. 
Conditions of open access to public networks (formal and effective); 
Availability of leased lines within a reasonable time; 
Justification for usage restrictions (if any) on leased lines. 
Justification for any restrictions on the processing of data 
(before or after public network transmission)17; 
Ensurance by the Member States of non-discrimination in usage conditions and charges 
between service providers (including the TO). 
Separateness and independence of effective and operational regulatory body 
Inclusion within its tasks of: granting licences, surveying usage conditions; control of 
type approval and mandatory specifications, and allocation of frequencies. 
On the basis of these points the Commission has found that the extent to which the Directive 
As mentioned, the exceptions to the 31/12/90 deadline relate to (a) specifications regarding simple 
resale of data services, 31/12/92; and (b) the setting up of an independent regulator, 1/7/91. 
Italy (provisions only included in the Legge Comunitaria 1994 are incomplete), and Greece 
(measures necessary to render the independent regulatory authority operational have still not been 
notified). 
For the issues listed see in particular Articles 1, 2, 3, 4, 5, 6, 7 of the Directive. 
Subject to the time deadlines set by the Council Resolution of 22 July 1993 
i.e. by the provisions set down in Article 2 and Article 3 
They must be demonstrated as necessary for essential requirements or public policy. 
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has been effectively implemented18 throughout the Union still varies significantly between the 
Member States. Various Member States will need to undertake further measures before the 
Commission may consider the directive correctly implemented19. 
b) Formal Procedures 
As far as is possible the Commission has sought to deal with remaining implementation issues 
via bilateral communication and negotiation with the Member States concerned. This has 
proved particularly efficient (for both parties) where information requested is prompt and 
transparent, and where the will to find rapidly a workable solution is evident. 
Where implementation problems cannot be solved by informal negotiation within a reasonable 
timeframe, the Commission is obliged to commence with the formal procedure for non-
implementation of a Directive, as provided for by Article 169 of the Treaty20. 
Currently, a number of formal procedures are underway. Two concern Member States' failure 
to notify all required national implementing legislation21. A further two concern incorrect 
application of the Directive in Member States22. 
c) Extension to the European Economic Area and Central and Eastern European 
States 
In accordance with the EEA Agreement, the Services Directive (including amendments) also 
applies to the EEA Member States as of 1 July 199423. 
20 Official notification does not necessarily mean effective implementation 
Section III of this Communication goes into this in more detail. Comments on the individual 
Member States' progress is provided in Annex. 
Article 169 of the EC Treaty deals with failure to fulfil an obligation under the rules of the Treaty, 
including the implementation of Directives. 
Under Article 169 of the Treaty, the procedure is a follows : 
i) The Commission sets out the points at issue by letter of'formal notice' and invites the relevant 
Member State to submit its observations. 
ii) If the Member State does not put an end to the infringement, the Commission gives a (non-
binding) reasoned opinion explaining its views and inviting the Member State to take the 
appropriate measures within a fixed period. 
iii) If the Member State does not comply with the reasoned opinion within the given period, the 
Commission may bring the matter before the European Court of Justice. 
Italy and Greece. 
Germany and Spain. 
Under the Competition Annex (XIV) of the Agreement, Article 90(3) Directives in the 
telecommunications field i.e. the Services Directive and the Terminals Directive (88/301/EEC) 
became applicable to the EEA Member States on 1 July 1994, as well as subsequent amending 
Directives, e.g. amending Directive 94/46/EEC with regard to satellite communications. 
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Since the Services Directive only specifies the application of Article 90 in conjunction-with 
Articles 59 and 86 of the Treaty and the Europe Agreements and Interim Agreements which 
the Union has signed with six Central and Eastern European countries contain similar 
provision, the general principles of this Directive (and any amendments) are also of relevance 
to these countries. 
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III SPECIFIC IMPLEMENTATION ISSUES 
Five main areas have emerged during the implementation of the Directive as requiring 
specific attention : 
a) General issues related to voice services 
b) Enforcement of the voice telephony monopoly 
c) Corporate networks and Closed User Groups (CUGs) 
d) Data services for the public 
e) The separation of operation and regulation 
a) General issues related to voice services 
Although the Directive defines in detail the concept of Voice telephony'24, various issues 
have arisen25 over just what is considered to be 'voice telephony' in the individual Member 
States and, hence, the degree to which special or exclusive rights26 on voice services had 
to be abolished27. 
According to the Services Directive, the Member States ensure the abolition of special and 
exclusive rights for the provision of telecommunication services other than the voice 
telephony service. In each case it has to be examined on the basis of the criteria set out 
below whether a given service is a voice telephony service. In order to allow the relevant 
national regulatory authorities to assess the envisaged service, the service providers may 
24 
25 
26 
27 According to Article 1 of the Directive "voice telephony means the commercial provision for the 
public of the direct transport and switching of speech in real-time between public switched network 
termination points, enabling any user to use equipment connected to such a network termination 
point in order to communicate with another termination point." 
See also European Court decision ECR-I 5833 which has guided the Commission in the elaboration 
of the definition of exclusive and special rights (see below). 
According to Article 2 of amending Directive 94/46/EC (see section IV): 
"exclusive rights" means the rights that are granted by a Member States to one undertaking through 
any legislative, regulatory or administrative instrument, reserving it the right to provide a 
telecommunications service or undertake an activity within a given geographical area 
"special rights" means the rights that are granted by a Member State to a limited number of 
undertakings through any legislative, regulatory or administrative instrument which, within a given 
geographical area, 
limits to two or more the number of undertakings authorised to provide a service or 
undertake an activity, otherwise than according to objective, proportional and non­
discriminatory criteria, or 
designates, otherwise than according to such criteria, several competing undertakings as 
being authorised to provide a service or undertake an activity, or 
confers on any undertaking(s), otherwise than according to such criteria, legal or regulatory 
advantages which substantially affect the ability of any other undertaking to provide the 
same telecommunications service or to undertake the same activity in the same 
geographical area under substantially equivalent conditions. 
According to Article 2 of the Directive, "Member States shall withdraw all special or exclusive 
rights for the supply of telecommunications services other than voice telephony..." 
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be required to provide all the necessary information28. 
A regulatory approach that identifies only a limited set of permissible, non-reserved 
services does not conform to the requirements of the Directive. 
A voice service may be reserved under national legislation only if it includes all of the 
elements of the Community voice telephony definition, i.e. it must be provided on a 
commercial basis to the public for the purpose of direct transport and switching of speech 
in real time between public switched network termination points. 
It is useful to consider the significance of each of these elements: 
"Commercial" 
This requires that the simple technical non-commercial provision of a telephone 
connection between two users should be authorized. "Commercial" should be understood 
in the common sense of the word, i.e. provided against payment and with the intention of 
making a profit (or at least of covering all variable costs and making a contribution to 
existing fixed costs). A leased line, for example, made available on a cost-sharing basis 
between one or more users would only be considered a commercial activity if additional 
capacity were leased specifically to allow resale. 
It also means that companies should be free to pool resources, i.e. to rent leased lines and 
benefit from the flat rate rental. This permits a more efficient use of the telephone 
network and, in particular, benefits small and medium-sized enterprises (SMEs)29. 
"for the public" 
The term "for the public" is not defined in the Directive and must be understood in its 
common sense: a service for the public is a service available to all members of the public 
on the same basis. 
Particular examples of services which should not be considered "for the public", and thus 
should not be made subject to special or exclusive rights, are those provided over 
corporate networks and/or to closed user groups. Corporate networks and closed user 
groups (CUGs) cover a number of telecommunications services, both voice and data. They 
are fundamental to the Services Directive particularly because they fall outside the scope 
of the voice service which Member States may reserve to their telecommunications 
organizations. 
28 
29 This will in particular be the case concerning the provision of voice services to closed user groups 
on leased lines networks connected at different ends to the public switched network. In this case 
some national regulatory authorities request detailed information, such as clients targeted, draft 
advertisements, envisaged tariffs ..., to assess the nature of the envisaged service. 
A disadvantage for SMEs existed previously because they do not generally use the switched 
telephone service sufficiently intensively to make it worthwhile for them to pay the (high) flat rate 
rentals for leased lines. As a consequence, leased lines were, in practice, reserved to larger 
companies. 
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The particular issues associated with liberalisation of these services are discussed in more 
detail below (IIIc). 
"from and to public switched network termination points" 
"From and to public switched network termination points" means that, to be reserved, the 
voice service has not only to be offered commercially and to the public, but also to 
connect two network termination points of the switched network30 at the same time. As 
long as each customer of the service provider is connected via a dedicated leased line, it is 
possible to offer a commercial service which terminates on the public network.31 The aim 
is, again, to ease technical restrictions on the use of leased lines. In this way lines may be 
used for voice telephony offered to non-CUGs, as long as there is no commercial offer of 
"simple resale" of the switched telephone service.32 On the other hand, "simple resale" 
may be legitimate when the service is not offered to the public, but, for instance, is 
provided to a closed user group33. 
"direct transport and switching of speech in real time" 
This part of the definition excludes any store and forward or voice mail applications from 
being reserved. Least cost routing of telephone calls by a service provider on the public 
switched network or credit card telephony, whereby access is given to the voice telephony 
service of a TO in the framework of a financial transaction service, are further examples 
of liberalised voice services as these do not constitute "direct transport". 
30 
31 
32 
33 The public switched network is not formally defined in the Directive. It must be given its common 
meaning, i.e., the public switched telephone network (PSTN) which is the collection of switching 
and transmission facilities used by the telecommunications organisation to provide the normal 
telephony service. 
i.e. as long as they are connected via a dedicated leased line, customers of a liberalised voice 
service do not necessarily need to demonstrate a pre-existing legal or economic relationship with the 
recipients of their calls. This is often referred to as "dial-out" service or "one-ended" service. . 
"Simple resale" refers to the situation where the call is both originated and terminated on the public 
switched network. It is, in this sense, offered to the general public since the local call may originate 
from any user of the public switched network and the customer itself is not connected by the 
service provider via a dedicated leased line 
Such a service may, indeed, include features requiring bypass such as teleworking, out of office 
hours calls diversion, paging, Centrex services or when small business units, whose call volume 
does not justify use of leased lines, need to communicate with each other. 
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Since the reservation of voice services is an exception to the general rule of competition,, 
it must be interpreted narrowly. When new voice services and features are introduced and 
meet demand which is not satisfied by the current telephone service, they should normally 
be considered non-reserved: If they are defined as reserved, the burden of proof, as always 
should fall to the Member State to justify such a restriction34. 
Calling card services offer a specific example of services, which can, from the point of 
view of the-users, be considered to be different from the reserved voice telephony service. 
They fall outside the definition in as much as the calling card service matches important 
needs which the (normal) voice telephony does not meet, for example as a result of 
additional features such as payment via credit or debit card, least cost routing, destination 
speed dialling etc. Where additional features such as these, rather than possible lower 
tariffs, are decisive in prompting users to use the calling card service instead of voice 
telephony, the service should be considered liberalised. The fact that a calling card market 
is emerging, although tariffs are in most of cases higher than those of voice telephony35 , 
is evidence that there is a calling card market which is distinct from the voice telephony 
one. Calling card providers have developed this new market tailoring the services to the 
customers and billing them accordingly. This evolution creates new opportunities for the 
users in the Union and should not be delayed by restrictions aimed at preserving the 
traditional voice telephony market. 
The prohibition of leased line routing for the provision of calling card services would put 
providers of calling card services at a competitive disadvantage in this market relative to 
calling card providers with own facilities. In the absence of the routing facility they are 
merely resellers of voice telephony and would have no control over their main costs. 
They could therefore hardly compete with the Telecommunications Operators (TOs). TOs 
have a further advantage in that they can offer their customers both voice telephony and 
calling card services and develop their card service by building on their database of high 
volume users. 
Such a state of affairs would promote possible scenarios whereby national TO's offering 
calling card services would limit their offer to residents of their national territory without 
entering neighbouring geographic markets. 
An individual assessment of the envisaged calling card service may, however, be 
necessary, in particular of the additional features offered, in order to determine the nature 
of the service and upon which market it will be offered. The criteria used should be the 
34 To allow the relevant national regulatory authorities to assess the envisaged service, the applicants 
may be required to provide them with all the necessary information, including draft advertisements 
and envisaged tariffs lists, if any. 
"contrary to widespread belief, cost saving is not the main driver (for the development of calling 
card services). Indeed, calling card and international direct dial (IDD) tariff comparisons for 
calls originating from the EC reveal that convenience is the main driving factor for a service 
essentially targeted at business users" . See : New forms of competition in voice telephony 
services in the European Community, BIS Strategic Decisions, October 1993, study carried out for 
the European Commission. 
Additional features, such as billing and usage convenience (no local currency required, operator 
speaking the same language) seem to be the main driving factor for this service. 
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degree of functional interchangeability between the services and the possible barriers to 
substitution. Such assessment must take into account the specific circumstances of the 
markets concerned. 
b) Enforcement of the Voice Telephony Monopoly in a liberalised environment 
Since certain categories of voice services have been opened up to competition, and since 
such categories may not be defined in a rigidly technical sense, certain Member States 
feared that service providers would offer what is in effect "voice telephony" and thereby 
by-pass the monopoly. In fact, experience has shown that such fears were not founded. 
The main reason is that such "un-official" by-pass will not occur to any significant extent 
without being noticed by the relevant Member State. A service which is offered to the 
public must be, "ipso facto", public knowledge. 
In particular, given that any commercial offer would normally involve advertising (of the 
services available) or, at the very least, issuing price lists, contracts and invoices, such by­
pass should be evident from an early stage. Furthermore, any breach leading to a 
substantial diversion of traffic on to a competitor's network is rapidly detected by the 
public operator providing the competitor's leased line capacity. The TO would clearly 
have an interest in bringing the situation to the attention of the appropriate national 
regulatory authority. 
In the framework of the licensing or declaration procedures, various Member States, 
however, still request the applicant to provide a description of the intended service. 
Where networks are connected to the public switched telephony network (PSTN), for 
example in the case of voice services provided on leased lines, Member States often 
require evidence of how the applicant will prevent dial-in and dial-out facilities being 
available at the same time. It should be noted that, under Article 4 of the Directive, 
technical restrictions may not be imposed on the service provider. It suffices that the 
service provider clearly sets out in the contracts, signed with its clients, the extent of 
services authorised. 
New operators generally have shown that they will respect the voice telephony monopoly. 
Service providers do not want to take the risk of having their authorization revoked or 
having the national regulatory authority requesting the disconnection of the relevant leased 
lines and not being able to fulfil their obligations towards their clients. Many service 
providers did therefore, before starting their services, investigate first the matter with the 
national regulatory authorities or with the Commission services. 
c) Corporate networks and Closed User Groups 
As mentioned, the special issue of corporate networks and / or closed user groups (CUGs) 
has been of particular importance amongst the issues encountered in the course of 
implementation of the Directive. 
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Effective liberalisation of corporate networks and CUG services is, without doubt, critical, 
for the development of advanced business communications and therefore the 
competitiveness of EU industry vis a vis its counterparts in Japan and the US. It is, thus, 
a central goal of the Directive. The economics of competition, and markets themselves 
are becoming increasing global. Where business is denied the clear benefits of lower cost, 
and increased quality and choice which competition ensures, it will ultimately either suffer 
from the competitive disadvantage this implies, or, where possible, will seek to relocate 
to a less restrictive environment. 
In this context, the goals of the Directive have still not been achieved in a number of 
Member States. Two reasons for this are : 
i disputes as to the extent of allowed 'membership' of CUGs, which are broader 
than strict corporate networks. This has led to lack of full or effective 
implementation of the Directive 
ii bottlenecks in the supply of capacity to the new service providers caused by 
restrictions on use of alternative infrastructure (this will be addressed more fully in 
Section V) 
The Commission has considered the cases where Member States have issued provisions 
under the Directive for authorizing the provision of voice to CUGs. Various definitions 
have emerged36. On the basis of experience gained, the Commission will use the 
following definitions37 : 
"corporate networks" 
those networks generally established by a single organisation encompassing distinct 
legal entities, such as a company and its subsidiaries or its branches in other 
Member States incorporated under the relevant domestic company law. 
"closed user groups": 
those entities, not necessarily bound by economic links, but which can be identified 
as being part of a group on the basis of a lasting professional relationship among 
themselves, or with another entity of the group, and whose internal 
communications needs result from the common interest underlying this relationship. 
In general, the link between the members of the group is a common business 
activity. 
36 
37 For country by country information, see Annex 
The Commission has acknowledged these definitions in its "Green Paper on the liberalisation of 
telecommunications infrastructure and cable television networks, Part I, Principles and Timetable", 
COM(94)440 final, Brussels 25.10.1994, p.27. 
- 19 -
Examples of activities likely to fall into this category are fund transfers for the. 
banking industry, reservation systems for airlines, information transfers between 
universities involved in a common research project, re-insurance for the insurance 
industry, inter-library activities, common design projects, and different institutions 
or services of intergovernmental or international organisations. 
Services provided concerning such categories of networks or entities are fully liberalised 
according to the définition of "voice telephony" in Article 1 of the Directive. Some 
Member States did, however, only authorise such services after further discussions with 
the Commission. 
.38 d) Data services for the public 
Article 10 of the Services Directive provides that the Commission shall assess the effects 
of the measures adopted by the Member States regarding simple packet- or circuit-
switched data services under Article 3 of the Directive in 1994, to see whether any 
amendments need to be made to the provisions of that Article, particularly in the light of 
technological evolution and the development of trade within the Community. 
During the consultation on the 1987 Green Paper, various Member States stressed the need 
for a special regime for basic switched data network services such as X.2539. No 
justification could be found for the maintenance of exclusive rights as regards the 
provision of such services per se. The Commission, however, acknowledged that 
developed data switching networks might have a structural effect on investments and 
regional planning, and could therefore qualify for a specific regime, set out in Article 3 of 
the Directive, in particular the application of public service spécifications in the form of 
trade regulations relating to conditions of permanence, availability, and permanence of 
service. 
38 Article 1 defines 'packet and circuit-switched data services' as "the commercial provision for the 
public of direct transport of data between public switched network termination points, enabling any 
user to use equipment connected to such a network termination point in order to communicate with 
another termination point" 
39 X.25 is a standard protocol for packet switched networks. Another advanced protocol for high 
speed data transfer is frame-relay. 
- 20 -
Moreover, given the substantial difference between charges for use of the data _ _. 
transmission service on the switched network and charges for use of leased lines at the 
time of adoption of the Directive, Article 3 allowed that exclusive rights for data services 
which represented "simple resale of capacity"40 could be maintained until 31 December 
1992, with possible additional deferments until 1 January 1996 for those countries where 
the relevant network for the provision of the packet or circuit switched services were not 
yet sufficiently developed41. The aim was to allow that equilibrium in such charges would 
be achieved gradually. Two Member States42 initially requested such an extension of 
deadline, although in neither case the request was maintained. 
As regards the special regime, only three Member States43 notified draft specifications to 
the Commission before the deadline provided in the Directive, i.e. 30 June 1992. The 
Commission has assessed with the Member States concerned, whether the planned 
specifications were objective, non-discriminatory, transparent and proportionate to the aim 
pursued. These bilateral discussions were very useful and provided a basic experience of 
how a liberalised service can. be regulated to guarantee certain public service objectives, 
without restricting competition. It appeared in particular that, given the different starting 
positions of incumbent operators and potential new entrants, special attention should be 
given to avoid burdening the latter in a way which could constitute a barrier to entry and 
which would comfïrm the market power of the dominant operator. In such cases Member 
States should not necessarily impose the same conditions on new entrants as imposed on 
the dominant public operator. 
40 The Directive defines the latter as "the commercial provision on leased lines for the public of data 
transmission as a separate service, including only such switching, processing, data storage or 
protocol conversion as is necessary for the transmission in real time to and from the public switched 
network". 
41 Recital 11 of the Directive. 
42 Greece and Spain 
43 Three Member States (Belgium, France, and Spain) have adopted additional licensing conditions for 
the provision of simple resale for packet or circuit-switched services. In Spain, for example, there 
is a scheme regulating the granting of concessions for the provision of packet or circuit switched 
data services which does not tie in completely with the Commission's comments concerning this 
area. The scope of the Spanish scheme is too broad, since it applies to data services between 
"network termination points" instead of "termination points of the public switched network". 
Italy was also considering the adoption of additional conditions, but failed to implement the 
Directive within an appropriate timescale. Given that under the direct effect of Articles 2 and 3 of 
the Directive simple resale of capacity was liberalised in Italy without any further restrictions, the 
Italian government shall have to provide appropriate justifications for the reintroduction of any 
additional restrictions in that respect. 
- 21 -
Over the last years, rapid technological evolution and, in particular, the development 
alongside the traditional X.25 of ATM44, has undermined the traditional justifications for 
the current specific regime for basic data services. One can assume that in the near 
future X.25 public backbone networks will continue to co-exist with frame-relay-networks 
and the new emerging ATM-backbones. Applying the same service-specific regulation to 
such different technologies will prove difficult. It could delay new offers of virtual 
private networks and value added services and thus limit technical progress in the area. 
Moreover the rationale behind quality or coverage obligations decreases with the 
increasing differentiation of the offer. The emergence of new services requires a degree 
of flexibility which cannot be steered by regulation. 
The current spécifie schemes in force in three Member States also have an impact on trade 
between Member States. The limited number of applicants for authorisations under the 
current schemes in the three Member State can, in part, be explained by the fact that 
many providers of the relevant service prefer to limit their offer to CUG's instead of 
having to apply for a license under these circumstances. 
On the basis of its assessment, given that most of the Member States have not deemed it 
necessary to adopt specific schemes for data services, without noticeable negative effect as 
regards the public interest objectives pursued by these schemes, the Commission considers, 
that the requirement for applying specific public service specifications with regard to data 
services should be reviewed in the framework of the general adjustment of the 
telecommunications regulatory framework to be presented before 1 January 1996 
according to Council Resolution 93/C 213/01, and that the termination of the current 
specific schemes for data services should be considered45. 
e) The Separation of Operation and Regulation 
The separation of the regulation of the telecommunications sector from the operation of 
the national Telecommunications Organisation was, without doubt, the most fundamental 
condition for achieving reform and liberalisation of the EU telecommunications markets. 
Whatever institutional, legal or structural means may be used to achieve it, Article 746 of 
the Directive requires that the Member States must separate telecommunications regulatory 
and operational functions. 
44 
45 
46 ATM : "Asynchronous Tranfer Mode", advanced high speed communications. See also Green Paper 
on the Liberalisation of Telecommunications Infrastructure and Cable Television Networks, op. cit. 
However, such schemes may be required as regards the provision of voice telephony for the public, 
once liberalised. See licensing criteria proposed for licensing mobile and personal communications 
networks, as well as for fixed networks (Green Paper for mobile and personal communications, 
Green Paper on the liberalisation of telecommunications infrastructure and cable television networks, 
op. cit. . 
Article 7 requires Member States to ensure that "from 1 July 1991 the grant of operating licences, 
the control of type approval and mandatory specifications, the allocation of frequencies and 
surveillance of usage conditions are carried out y a body independent of the telecommunications 
organisations" 
22 
Whilst National Regulatory Authorities (NRAs) now formally exist in most Member 
States, the Commission considers that the degree of separation between these and those of 
the operator functions is still not sufficiently clear in at least five Member States.47. 
This issue of the independence of the National Regulatory Authorities was raised in a 
number of preliminary referrals to the Court of Justice relating to Article 6 of Directive 
88/301/EEG (the 'Terminals Directive') , which required Member States, as of 1 July 1989, 
to ensure that the fixing of technical standards as well as supervision of type approval, 
were carried out by bodies independent from public or private undertakings involved in 
the marketing of telecommunications equipment. In its judgements of 27 October 199348, 
the Court found that this requirement had been infringed in France where, at that time, 
departments in the same Ministry were responsible for the commercial exploitation of the 
public network, and the fixing of technical standards, the supervision of conformity and 
the approval of terminal equipment. 
Article 7 of the Services Directive to a large extent mirrors the wording of Article 6 of the 
Terminals Directive. The implementation by the Member States of the former must be 
considered in view of this past judgement. A mere legal or administrative separation 
between the functions - such as that between two services of a Ministry - would only be 
sufficient to comply with Article 7 under the following conditions: 
o it must be shown that there is a 'real' separation 
o in particular, there must be financial independence of one from the other 
o any movement of personnel from the regulatory body to the operational body 
should be subject to special supervision. 
Forms of structural separation offering a reasonable guarantee that such conditions would 
be upheld, include : 
i the granting of the regulatory functions to a department of the relevant Ministry 
47 
48 For example, in the Netherlands, the regulation is carried out by the Ministry for Transport and 
Public Works through the Directorate General for Post and Telecommunications. The Ministry is, 
however, also the majority shareholder of KPN which has still the exclusive right to install, maintain 
and operate the telecommunications infrastructure, and provides the mandatory services to each 
applicant. 
Some questions have also been raised about how distinct a separation of powers exists between 
regulator and operator in Belgium, Spain, and Greece. The Belgian Government has, however, 
stated its intention to respect the complete autonomy of the public operator BELGACOM in the area 
of non-reserved services in response to Commission concerns. In Spain, the Director General for 
Telecommunications (responsible for regulation) is also the Government Delegate on the Board of 
directors of Telefonica, although such a delegate could legally come from another Ministry. 
In Greece, while functions have been formally separated, the continuous movement of personnel 
from the operational body to the regulatory body makes the practical separation of these bodies 
unclear. 
The cases Decoster et al (C-69/91) and Taillandier (C-46/90) 
- 23 -
when the telecommunications undertaking is itself controlled by private 
shareholders, or 
ii the granting of the relevant regulatory functions to a body, which is independent 
from the relevant Ministry (except for the control of its accounts and the legality of 
its decisions) when the latter is also acting as sole or dominant shareholder of the 
operator or where a considerable state shareholding in the operator remains. 
Alongside the legal guarantees and general rules implied by the Directive, actual practice 
and spirit are an important test of compatibility with Article 7. How "independence" is 
actually achieved institutionally will therefore vary, to a certain degree, according to the 
legal tradition and experience in each Member State. 
- 24 -
IV Inclusion of Satellite Networks and Services 
Directive 94/46/EC 
On 13 October 1994, the Commission adopted Directive 94/46/EC. This Directive extends 
the Terminal Directive49 to include satellite earth station equipment and extends the Services 
Directive to include satellite communications services50. 
a) The significance of the amending Directive 
The aim of the Union's policy in the area of satellite communications, shared by the Council 
and the Commission, is to stimulate without delay greater use of satellite communications in 
the EU. This is particularly important given the widening gap between the delay in 
development of EU business satellite communications compared to that which its major 
competitors enjoy. 
The Directive requires the abolition of all exclusive rights granted for the provision of satellite 
services, and the abolition of all special rights51 to provide any telecommunications service 
covered by the Directive. 
b) Voice telephony 
The amended Directive does not affect restrictions on offering voice telephony for the public 
via satellite network. However, this must not lead to technical restrictions. While recital 16 
states that "in the case of direct transport and switching of speech via satellite earth station 
networks, commercial provision for the public in general can take place only when the 
satellite earth station network is connected to the public switched network", this is merely a 
guide as to what is normally the case. It should not be understood as allowing technical 
restrictions to protect the voice telephony monopoly. The burden of proof that the new 
service actually constitutes "voice telephony" rests with the regulator. 
50 Commission Directive of 16 May 1988 on competition on the markets in telecommunications 
terminal equipment (88 / 301 / EEC, OJ L131 / 73, 27.5.88) 
Directive 94/46/EC constitutes the central measure for implementing the liberalisation objectives for 
the satellite sector, set forth by Council Resolution 92/C 8/01 (based on the Green Paper on 
satellite communications, COM(90)490). 
Other measures in this field are Council Directive 93/97/EEC of 29th October 1993, relating to 
mutual recognition of type approval for satellite terminals and the proposal for a European 
Parliament and Council Directive on a policy for the mutual recognition of licences and other 
national authorisations for the provsiion of satellite network services and/or satellite communications 
services, COM(93)652, 4.1.94. 
Special rights is defined in the Directive as "limiting the number of undertakings authorised to 
provide telecommunications services otherwise than according to objective, proportional and non­
discriminatory criteria or designating otherwise than to such criteria several competing undertakings 
to provide such services". 
- 25 -
In fact, the provision of voice for closed user groups will often involve such connections-with 
the public switched network, since some members of such groups will not be connected to 
the network via satellite stations52. 
c) Broadcasting services 
The status of broadcasting services are also unaffected by Directive 94/46/EC. One has, 
however, to distinguish between the content and the technical provision of broadcasting 
services. As mentioned in recital 17, the provision of satellite network services for the 
conveyance of radio and television programmes is, by its very nature, also a 
telecommunications service and there is therefore no justification for treating it differently 
from any other telecommunications service. The Directive, thus, makes a distinction between: 
*• the services provided by the carrier (transmission, switching and other activities) 
necessary for the conveyance of the signals, which are telecommunications services 
liberalised under the Directive, and 
* the activities of those bodies which control the contents of the messages to be 
broadcasted, which are broadcasting activities falling outside the scope of this 
Directive. 
Satellite broadcasting services which should now be liberalised under this Directive therefore 
include services provided over telecommunications operator's feeder links from studios/events 
to uplink sites, as well as uplink services for point to point, point to multipoint, direct-to-
home (DTH) satellite broadcast services and services to cable-head ends. 
d) Access to space segment 
Member States are required by the Directive to abolish all restrictions on the offer of space-
segment capacity on their territory. 
This means that the Member States now must ensure that: 
* any regulatory prohibition or restrictions on the offer of space segment capacity to 
any authorised satellite earth station network operator are abolished, 
* any space segment supplier is authorized to verify within its territory that the satellite 
earth station network for use in connection with the space segment of the supplier in 
question, is in conformity with the published conditions for access to his space 
segment capacity. 
52 According to the definition given, closed user groups are indeed not to be defined technically, by 
the network to which their members are connected and which should not be accessible by third 
parties but sociologically by the economic or professional relationship among their members. 
26 -
In its Communication of 10 June 1994 on satellite communications relating to the provision 
of - and access to - space segment capacity53, the Commission announced its intention to use 
the competition rules to remove all national restrictions within the European Union on access 
to space segment. The discovery procedures set out in Article 3 of the Directive will, in 
particular, be implemented to gather the necessary information to achieve this purpose. 
e) International Satellite Organisations 
The new obligations related to space segment do not directly affect the position of the 
telecommunications organizations as signatory of international organisations. However, 
Member States are obliged to ensure that there are no restrictive provisions in their national 
regulations which would have the effect of preventing the offer of space segment capacity in 
their territory by either another signatory of the relevant organisations or by independent 
systems. Similarly Member States are obliged to ensure that there are no regulatory or non-
regulatory restrictions preventing space segment capacity already leased by a licensed operator 
in one Member State from being freely accessed from any other Member State. Such 
restrictions include those preventing parties other than the signatory in the Member State(s) 
concerned from verifying the technical and operations specifications of satellite earth stations. 
Article 3 of Directive 94/46/EC requires Member States to communicate to the Commission, 
at its request, the information relating to international satellite organisations they possess on 
any measure that could prejudice in particular compliance with the competition rules of the 
EC Treaty. Recital 21 explains that this provision aims amongst others to monitor the review 
which is underway within these international organisations to improve access. 
Article 3 of Directive 94/46/EC does therefore also not directly affect the position of the 
signatories. However, if it appeared that signatories continue to maintain mechanisms 
dissuading multiple access and thus favouring market sharing for the provision of space 
segment, the Commission would have to assess whether action should be taken under the 
competition rules of the Treaty against the relevant signatories. 
The coupling of investment obligations and utilisation could constitute such a dissuasive 
mechanism, where it dissuades signatories to market space segment by the threat of having 
to bear an increased investment share. With international organisations, and in particular 
EUTELSAT, operating in increasingly competitive markets, the current investment 
requirements will therefore, if they are not amended, have to be thoroughly assessed under 
the Competition rules. 
53 COM(94)210 final. 
- 27 -
f) Time table for implementation 
The Directive gives Member States nine months to inform the Commission of the measures 
taken to transpose the Directive into national law. The Member States should thus 
communicate to the Commission before 8 August 1995, a copy of the measures taken to 
abolish the current restrictions on the provision of satellite services, and of any licensing or 
declaration procedure which is currently in force or is being drafted for the operation of 
satellite networks. The aim is to allow the Commission to assess whether these conditions 
are necessary with a view to satisfying essential requirements. The information provided to 
the Commission should include possible fees imposed as part of these authorization 
procedures as well as the criteria upon which these fees are based. 
Recital 22 which mentions that the Commission will also take into account the situation of 
those Member States in which the terrestrial network is not yet sufficiently developed must 
be seen in the framework of this notification requirement. Member States which would deem 
necessary a deferment of the date of full application of the above mentioned provisions54 
should request it formally and with the necessary justification within the time period provided 
for the communication of the implementation measures of the Directive, i.e. before 8 August 
1995. The Commission will then assess whether it should refrain from insisting on the 
immediate liberalisation of the relevant satellite services. This would, however, not prevent 
possible actions in national courts brought by third parties in these Member States. 
Given the wide variety of satellite services, the motivation given should, in the first place, 
include the list of satellite network services for which the deferment is requested, 
accompanied by estimates of the markets concerned. 
It should further explain which services of the national Telecommunications Organisations 
would be affected, and on the basis of the turnover of these services and their contribution 
to the financing of the public network, a potential negative impact on the future development 
of the public network should be demonstrated. 
The Commission will apply to the proportionality principle. The Commission will in any case 
insist on, for example, the liberalisation of services which are economically insignificant. 
54 This derogation can apply up to 1st January 1996 at the latest. 
28 -
FUTURE EVOLUTION IN THE CONTEXT OF SERVICES 
AND INFRASTRUCTURE LIBERALISATION 
While major attention will have to continue to be paid to the full effective implementation 
of the Services Directive, the future development of the Directive must be considered within 
the overall context, which was determined by the review carried out according to the 
provisions of the Directive during 1992, leading to Council Resolution 93/ 213/01 of 22 July 
1993 on full service liberalisation by 1 January 1998, now supplemented by Council 
Resolution 94/C3 79/03 of 22 December 1994, integrating infrastructure liberalisation into this 
time schedule. 
According to Council Resolution 93/ 213 / 01 the Commission should 
"... prepare, before 1st January 1996, the necessary amendments to the Community regulatory 
framework in order to achieve liberalisation of all public voice telephony services by 
1 January 1998.." 
Given its central role in lifting the restrictions to competition and ensuring fair market 
conditions, amendments to the Services Directive will represent a focal point of these 
measures. 
As set forth in the Green Paper (Part I) on telecommunications infrastructure liberalisation55: 
Under the Directive 90/388 on competition in the markets for telecommunications services, 
the provision of all telecommunications services was opened to competition, subject to four 
significant exceptions 
satellite services 
mobile telephony and paging services 
radio and TV broadcasting services to the public, and 
voice telephony services to the general public. 
Directive 90/388 in its original form did not address the use of alternative infrastructures and 
cable TV networks for the provision of liberalised services. Directive 90/388 only required 
the removal of restrictions on the use of a single source of infrastructure, namely leased lines 
provided by the TOs, for the provision of liberalised services. 
As regards the exceptions set out above, the following applies : 
Op cit 
- 29 -
o Commission Directive 94/46/EC56, amending Directives 88/301/EEC 
(telecommunications terminal equipment) and 90/388/EEC (telecommunications 
services) in particular with regard to satellite communications, adopted on 13 October 
1994 has lifted the exception with regard to satellite services. As set out under IV., 
Member States are given 9 months to communicate implementation measures taken. 
o On 21 December 1994, the Commission adopted, for consultation, a draft amending 
Directive concerning the liberalisation of the use of cable TV networks for the 
services already liberalised according to the Services Directive, providing for 
substantial opening of the further development of these networks, particularly with 
regard to multi-media. 
o The Commission Communication on the consultations following the Green Paper on 
Mobile and Personal Communications was published on 23 November 199457. It 
proposed the lifting of all special and exclusive rights with regard to mobile services 
by 1 January 1996. The corresponding amendments to the Services Directive will 
have to be considered. 
Finally, a major issue will be the adjustment of the telecommunications regulatory framework 
to the objectives of the Council resolutions of 22 July 1993 and 22 December 1994, 
integrating the date of 1 January 1998 for full liberalisation (with additional transition periods 
for certain Member States), to be proposed before 1 January 1996. As set forth in the 
Infrastructure Green Paper (Part II)58, such an approach must aim at creating the optimal 
environment for the future development of the European Union's telecommunications sector 
by combination of both competition policy and sector specific regulation. 
Besides the adjustment of the existing harmonization Directives in the telecommunications 
sector (such as ONP Directives) and the working out of proposals for maintaining universal 
service and ensuring interconnection, as well as the review of the institutional arrangements 
for regulating the sector, this will in particular require further adjustment of the Services 
Directive. 
At the Council of 17 November, the Commission has welcomed the agreement on the date 
of 1998 as the deadline for the liberalisation of infrastructure for all telecommunication 
services. It has also taken note of the concerns of a number of Member States expressed at 
this Council, to undertake early measures for the liberalisation of alternative infrastructures 
for services already liberalised according to the Services Directive. This aspect will need 
further consideration. 
58 see section IV 
COM(94) 492 final: Communication to the European Parliament and the Council on the 
Consultation on the Green Paper on Mobile and Personal Communications 
Op. cit. 
- 30 -
V. CONCLUSION 
Commission Directive 90/388/EEC represents the most significant legislative measure for 
liberalising EU telecommunications to date. The Commission will ensure that maximum 
effort and resources are directed towards solving identified problems and filling gaps in 
implementation. 
The 1992 Review revealed that the effectiveness of the measures liberalising the 
telecommunications sector (concerning at that stage, in particular the liberalisation of data 
communications, value added services and the provision of data and voice services to 
corporate users and closed user groups) was questioned by many service providers and users 
of such services. It has also been understood that implementation of the Services Directive 
is hampered by the non-availability of infrastructure under reasonable conditions. 
In particular, high tariffs for and lack of availability of the basic infrastructure over which 
liberalised services are operated or provided to third parties have delayed the widespread 
development of high speed corporate networks in Europe, remote accessing of databases by 
both business and residential users and the deployment of innovative services such as 
telebanking and distance learning. Additionally, the regulatory restrictions in many Member 
States still prevent the use of alternative infrastructure operated by third parties, such as cable 
TV-networks and networks owned by energy companies, railways, or motorways to meet their 
internal communications needs. Many user associations and companies have stressed that 
European business is less competitive, that innovative services are more slowly deployed and 
that the creation and development of pan-European networks and services is being delayed 
as a result. 
The importance of effective and affordable infrastructure is increasingly recognised in political 
debate within the Member States themselves. The European Parliament has called on the 
Commission to adopt, as soon as possible, the necessary measures. 
The continued bottleneck situation has been emphasized as a key obstacle to the development 
of the European Information Infrastructure in the report on Europe and the global information 
society. The Action Plan towards the European Information Society adopted by the 
Commission in response has set a general framework. 
Further emphasis on effective implementation of the telecommunications Services Directive 
and its future evolution will take account of these general objectives. It is with this intention 
in mind, that the Commission transmits this Communication to the European Parliament and 
to the Council. 
- 31 -
ANNEX I 
MEMBER STATE IMPLEMENTATION OF DIRECTIVE 90/388/EEC 
The following represents a short overview of the state of implementation of the Directive in 
individual Member States. Given the rapid development in this field, reference should be 
made to National Regulatory Authorities for more detailed information. 
The overview does not include information with regard to implementation in the European 
Economic Area. 
BELGIUM 
The Directive is implemented in Belgium by the law of 21 March 199159. With regard to 
telecommunications it transforms the Régie des Télégraphes et des Téléphones/Régie van 
Telegraaf en Telefoon (RTT) into the public autonomous company BELGACOM. 
As regards the definition of the reserved service in the Belgian law, Article 68 defines the 
Telephone Service' as the telecommunications service intended for the direct carrying and real 
time switching of vocal signals at the start and at the destination of the connection points, 
including the services necessary for its operation. In letters of July 1991 and June 1993 the 
Belgian Government confirmed that it interprets the law in the way intended by the Directive. 
Where a provider wishes to supply liberalised services, a list of non-reserved services can be 
established by Royal Decree which, by derogation, would automatically be authorised 
providing that the applicant informs the IBPT of the service. Thus far, however, the 
Commission is not aware of such a list. In its absence, the applicant must give the IBPT two 
months prior notice of its intention during which time the IBPT can oppose the provision of 
the service if it deems it contrary to the 1991 law. Article 89(5) states that the IBPT must 
provide a reasoned decision if it refuses to authorise the provision of a service. 
Belgium is one of three Member States to have adopted additional licensing conditions for 
the provision of packet- or circuit-switched data services for the public. This is allowed under 
Article 3 of the Directive as long as the Commission approves the conditions, which it did 
in July 1993. 
59 Moniteur Belge, 27 March 1991, p.6155 and corrigendum in Moniteur Belge 20 July 1991. The 
same law also implements the Directive on competition in the markets for telecommunications 
terminal equipment, Commission Directive 88/301/EEC. 
- 32 -
Under Article 85 of the 1991 Belgian Law, BELGACOM can only refuse a user access to a 
leased line on the basis of the essential requirements recognised by Community Law. Further, 
as defined in the management contract (Art 21(3)), BELGACOM must satisfy at least 90% 
of the registered applications for ONP-leased lines within three months unless otherwise 
agreed with the customer. 
With respect to the issue of the independence of BELGACOM from the regulatory authority 
as required by Article 7 of the Directive, under the 1991 law regulatory powers are assigned 
to the Minister .responsible (assisted by the national regulatory authority, Institut Belge des 
Services Postaux et des Télécommunications, IBPT). The Belgian Government has stated that 
it will respect the complete autonomy of BELGACOM in the area of fton-reserved services. 
DENMARK 
The Directive has been implemented in Denmark by Law No. 743 of 14 November 1990 and 
the Consolidating Order No.398 of 13 May 1992. 
Under the Act, the Minister of Communications can grant a concession to TeleDanmark on 
the establishment and operation in relation to public radio and fixed services as well as of 
voice telephony, text and data communication, provision of leased lines, mobile 
communications and satellite services, and transmission of radio and TV programmes. 
An area of concern, and indeed the issue which led to the commencement of infringement 
proceedings against Denmark, was the definition of "voice telephony" which is reserved to 
TeleDanmark. The initial law reserved all of the non-public transmission of traffic to 
TeleDanmark with the sole exception of voice telephony over leased lines between different 
legal entities (i.e. shared use). This clearly left too many restrictions on the usage conditions 
of leased lines in place, in contravention of the Directive. 
The Commission closed its proceedings after the adoption by the Danish Government of 
Order No. 905 of 2 November 1994 which allows anyone to provide domestic public voice 
telephony without requiring any form of authorization or declaration. As regards international 
calls, a license is required where calls originating from the PSTN are carried via leased lines 
and then returned back to the PSTN. Such licence is only granted for traffic to countries 
which have liberalised voice telephony. 
The Order was adopted under Article 3 of the 1990 Danish Act, which entitles the Minister 
to issue regulations for the establishment and operation of services which are not covered by 
TeleDanmark's concession or special rights. 
The rules to be applied to packet- and circuit-switched data services after 31 December 1992 
were stated in the Danish Order of December 1992. There is a slight discrepancy between the 
scope of these rules, and that intended by Article 3 of the Directive since the Order covers 
all data communications services. 
- 33 -
FRANCE 
The French government has implemented the Directive mainly through the adoption of Law 
No. 90-1170 of 29 December 1990 on the regulation of telecommunications. This Law is a 
modification of the "Code des Postes et Télécommunications" (the Code) which gives France 
Telecom an exclusive right to establish telecommunications network infrastructures open to 
the general public. 
Article L 34 specifies that only services provided to the public are covered by the Law. 
Article L.32-7 of the Code defines reserved voice telephony as the commercial provision of 
a system of direct, real-time voice transmissions between users connected to termination 
points of a telecommunications network. All other services provided to the public are 
liberalised subject to a declaration procedure or, for services of 5 Mbits/sec or more, to a 
licensing procedure60. 
According to Article L.34-2, France Telecom is authorised to supply any bearer service (this 
is how the French regulation qualifies the provision of simple resale of packet or circuit-
switched services). Other providers need a licence. France has adopted additional licensing 
conditions for the provision of such bearer-service. A final draft Decree for the application 
of Article L.34.2 relating to bearer services was transmitted to the Commission which 
decided, on 26 November 1992, not to object to its entry into force. The Decree was formally 
adopted on 30 December 1993 and published in the French Official Journal of 31 December 
1993 (p. 18276). This decree sets out a number of conditions relating to: 
the essential requirements, 
the measurement and the publication of the characteristics and the area of coverage 
of the service (Article 2) 
the respect of technical constraints concerning access to the service (Article 3) 
the interconnection with other bearer services (Article 4) 
national defence and public security as regards the encryption of data (Article 5), 
fair competition. 
The authorization of France Telecom to provide this service, cannot be transferred to its 
subsidiaries. TRANSPAC, which is a subsidiary of the Compagnie Générale des 
Communications (COGECOM), itself a 100 % daughter of France Telecom, had therefore to 
request a licence which was granted by order of 15 July 1993 (French Official Journal of 
8 August 1993, p. 11224). 
As regards the separation of regulation and operation (Article 7), the Minister for Industry, 
Posts and Telecommunications and Foreign Trade ensures that the regulations are respected 
by the public operators and, furthermore, that the regulation of the telecommunications sector 
on the one hand, and the operation of networks and the provision of telecommunications 
services on the other hand, are performed independently. He exercises his rights through the 
"Direction Générale des Postes et Télécommunications" (DGPT). 
The following companies were granted a licence: SITA, BT, SPRINT, SLIGOS, GSI, EDT and 
ESPRIT TELECOM. 
- 34 -
GERMANY 
Two German laws adopted on 8 June 1989 define the legal framework for the provision of 
telecommunications services: the Postverfassungsgesetz (PVG), which delimits the 
organisation and tasks of the Ministry for Post and Telecommunications and of Deutsche 
Bundespost Telekom; and an amendment of the Fernmeldeanlagegesetz (FAG), defining 
among other things, the monopoly retained by the State. The legal framework was 
substantially amended by Law of 14 September 1994 (Postneuordnungsgesetz -PTNeuOG), 
which came into force on 1 January 1995. 
The new Act did not however alter the definition of the "voice telephony" reserved to the 
DBP Telekom, although the Commission had in April 1994 drawn the attention of the 
German Government to the fact that it is broader than that in the Directive. Essentially three 
issues arise. Firstly, the definition uses the wording "for third parties" as opposed to "for the 
public". As a consequence, the switching of voice for closed user groups is part of the 
monopoly. Secondly, the terms "switching of voice" in the Law are interpreted in practice 
as including also mixed telecommunications (voice combined with data or images) in the 
monopoly, when the exchange of speech can technically be dissociated from data 
communication as is the case as regards videophony on ISDN. Finally, the definition covers 
all switching of voice, without distinguishing whether the voice both originates in and is 
switched to the public switched network. According to the Directive the switching of voice 
originating in a leased line network or switched to such a leased line network should not be 
reserved. 
Following bilateral contacts, the first issue was provisionally settled to a large extent. The 
German Law (FAG) reserves voice telephony for third parties, which is more than voice 
telephony "for the public" as allowed according to the Directive. To restore conformity 
between German and Community Law, the German Ministry for Post and 
Telecommunications, instead of changing the Law, used its licensing powers to allow by order 
(Verfugung) No. 1/1993, of 6 January 1993 and 8/1993 of 13 January 1993, private 
companies to provide telephony to closed user groups. The order established a class license 
(Allgemeingenehmigung) for the provision of the service to entities which are economically 
integrated. 
As regards Article 6 of the Directive, Section 29 TKV provides that a connection licence 
(Anschalteerlaubnis) is required for terminal equipment for connection to the network 
termination of transmission lines. The Commission views such a restriction as contrary to 
Article 6 of the Directive since it delays the use of equipment, already type approved, used 
in the switching and processing of signals (such as concentrators) to connect leased lines 
networks with the public switched telecommunications network. The issue has been raised 
with the German authorities which will abolish the relevant provision. In the meantime, the 
ministry has granted a class connection licence (Vfg 269/1994). 
The powers referred to in Article 7 of the Directive were until 31 December 1994 exercised 
by The Minister for Posts and Telecommunications. Under the new regime, the Ministry will 
be assisted by a Regulation Council (Regulierungsrat), including representatives of the Lander 
and the Federal Parliament (Bundestag). On the other hand, the government share in DBP 
Telekom, which was transformed into a joint stock company, will now be managed by a 
distinct office: the Bundesanstalt fur Post und Telekommunikation (BAnst PT). 
- 35 -
GREECE 
Greece implemented the Directive by means of Law No. 2075/92 of 21 July 1992, which has 
never been brought fully into effect as the Greek government failed to adopt the order setting 
out the internal working rules of the independent regulatory body set up by the Act. On 20 
October 1994, this law was replaced by Law No. 2246/94. The legislation does also not 
provide a complete regulatory framework and will necessitate further secondary legislation 
which has not yet been adopted. 
Given the failure of the Greek government to adopt timely implementation measures of the 
Services Directive the Commission has started proceedings before the Court of Justice under 
Article 169 of the Treaty. 
Article 2 (15) of Law No. 2246/94 defines "voice telephony" using the same wording as the 
Directive. However, Article 3 (2) of the Law states as principle that voice telephony is 
reserved and acknowledges only in a second stage that all other services are liberalised. 
Consequently, there is a threat of a broader definition of the reserved voice telephony in 
Greece. Moreover, this Article makes the liberalisation of these services subject to the 
condition that their provision is compatible with the proper fulfilment of the mission assigned 
to the public operator OTE. 
Liberalised services are, according to this Article 3 (2), subject to either an individual licence 
or to a declaration, depending on the limit of the capacity of leased lines used. The threshold 
has not yet been established. 
As regards simple resale of packet - and circuit - switched data transmission, Greece applied 
by letter of 7 February 1992 for the derogation until 1 January 1996 under Recital 11 of the 
Directive. After the adoption of Law No. 2075/92, which did not distinguish packet- and 
circuit-switched data transmission from other liberalised telecommunications services, Greece 
confirmed by letter of 27 May 1993, that it did no longer seek such a derogation and that 
packet- and circuit-switched data transmission was liberalised. 
According to Law No. 2246/94, the independent regulatory authority referred to in Article 7 
of the Directive, is the National Telecommunications Commission (EET), under the 
supervision of the Minister of Transport and Communications. The EET is the relevant 
authority for frequency allocation, numbering, licensing and type approval, as well as for 
ensuring compliance with national and EEC Treaty competition rules. It is not yet 
operational. In the mean-time, the Ministry exercises its competence. 
IRELAND 
Ireland has adopted specific regulations to give effect to the Directive. These are contained 
in "Statutory Instrument S.I. No.45 of 1992, European Communities (Telecommunications 
Services) Regulations 1992." which have amended the Postal and Telecommunications 
Services Act, 1983. 
- 36 -
In the area of voice telephony, the definition of "public voice telephony" expressed ia ST. 
No.45 mirrors that in the Directive. The exclusive right granted to Telecom Eireann under 
Section 87 of the 1983 Act is restricted to offering, providing and maintaining the public 
telecommunications network and offering, providing and maintaining voice telephony services 
under Regulation 3(1) of S.I. No.45. Value added licences can be obtained under Article 111 
of the Act of 1983 for provision of any other service, including voice for closed user groups 
or voice services making use of only one connection point between leased lines and the public 
switched network. By end 1994, 20 such licences were granted. 
Statutory Instrument No.45 of 1992 sets out the rights of these licensees as regards access to 
and use of the public telecommunications network. The conditions applied must be objective, 
non-discriminatory and published. Similarly, under Regulation 4(3) of the S.I., requests for 
leased lines have to be met within a reasonable period , and there should be no restrictions 
on their use other than to ensure non-provision of telephone services, the security of network 
operations, the maintenance of network integrity and, in justified cases, the interoperability 
of services and data protection. 
With respect to Article 7 of the Services Directive, The Minister for Transport, Energy and 
Communications is responsible for surveillance of Telecom Eireann according to Regulation 
5 of S.I. No.45. 
ITALY 
The Directive has been included in the Law No. 142 of 19 February 1992, "Legge 
Comunitaria for 1991" (LC 1991), which delegated to the Government the power to issue, 
within one year after its coming into force (i.e. by March 6, 1993), a number of legislative 
decrees for the implementation of the EEC Directives listed in Annexes A and B, including 
the Services Directive. The legislative decree implementing the Services Directive was, 
however, not adopted within this deadline. Subsequently, the Italian Government included 
the Services Directive in Article 54 of Law No. 146 of 22 February 1994 (legge comunitaria 
1993). 
This Article repeats the specific principles and criteria to be followed in the preparation of 
the legislative decree implementing the Directive, which were mentioned in LC 1991. 
Consequently it still provides for a specific licensing procedure for the supply of packet- or 
circuit-switched data services although the deadline set out in Article 3 of the Service 
Directive for the introduction of such scheme had already elapsed. Given that under the direct 
effect of Articles 2 and 3 of the Directive simple resale of capacity was liberalised in Italy 
without any further restrictions, the Italian government shall have to provide appropriate 
justifications for the reintroduction of any additional restrictions in that respect. 
The legislative decrees have not been adopted yet, and the Commission is considering taking 
Italy to the Court of Justice for failure to notify the implementation measures of the Services 
Directive. 
- 37 -
In the meantime, Article 1 of the Italian Postal Code of 1973, stating that "telecommunication 
services ... exclusively pertain to the State" remains applicable although Article 2 of the 
Directive implies that this Article, as well as all other provisions setting out the state 
monopoly for telecommunications services, should be changed to allow private operators the 
right to provide all telecommunications services excluding well defined areas reserved to the 
State. According to the Italian legal framework, only value added services listed in Article 
3(para.2) of the National Regulatory Plan for Telecommunications, enacted by a Ministerial 
Decree of 6 April 1990, may be provided. 
However, in a decision of 10 January 1995, the Italian Antitrust Authority (Autorité Garante) 
stated, disregarding the mentioned Italian regulation, that a refusal of Telecom Italia to 
provide leased lines to a private company wanting to offer voice services liberalised under 
the Directive is an abuse of dominant position and requested Telecom Italia61 to present, 
within 90 days, the actions taken in order to remove the restrictions to competition in the 
market for voice services for corporate networks/closed user groups, including virtual private 
networks. The Antitrust Authority bases this decision on the direct effect of Articles 1 and 
2 of the Services Directive in Italy. Telecom Italia has appealed against the decision. 
With the implementation of Act 58/92 on the reorganisation of the telecommunications sector, 
regulatory and operational functions were, in principle, separated by transferring the operating 
bodies of the Ministry, namely ASST, to Iritel, a company of the IRI Group. A bill on 
"Public Utility Services Regulatory Authorities" (No. 359) is currently pending at the Italian 
Parliament., which will, if adopted, create, inter alia, a regulatory body for post and 
telecommunications. However, no date is yet anticipated for its adoption. 
LUXEMBOURG 
Two legislative acts were adopted in 1990 in order to implement the Directive, the Regulation 
(Règlement grand-ducal) of 3 August 1990 establishing the general rules applicable to public 
telecommunications services and the Regulations of 8 October 1990 concerning public 
telephone service, telecommunications leased lines, public luxpac service, public alarm 
transmission service and public automatic telephone service - Serviphone. 
The Luxembourg authorities have, by letter of 22 October 1991, declared their intention to 
amend the definition of "basic telephonic service" in the Regulation and add the term "to the 
public". 
The Law of 20 February 1992 transformed the former Administration des P&T into a public 
undertaking with a separate legal identity, to comply with the requirement of Article 7 of the 
Directive to separate regulatory and operational functions. The Minister for Posts and 
Telecommunications exercises all regulatory responsibility in respect of the establishment and 
operation of the telecommunications networks. 
Telecom Italia was created on 18 August 1994 out of a merger between SIP, Italcable, IRITel, 
lelespazio and SIRM. 
- 38 -
NETHERLANDS 
The basic telecommunications legislation in the Netherlands (Act No. 520 on the 
telecommunications facilities (Wet op de Telecommunicatievoorzieningen),("WTV") of 26 
October 1988, which came into force on 1 January 1989, was drafted before the publication 
of the Commission Green Paper of 1987. It therefore uses a terminology which is 
substantially different from the terminology used in the Directive. 
Reserved voice telephony is defined in Article 2 of Decree No 551 of 1 December 1988 
which lists-the mandatory services of KPN (Koninklijke PTT Netherlands). According to the 
definition, the reserved service is not limited to a service which is provided on a commercial 
basis. Secondly, it does not limit the monopoly to voice telephony "for the public". Thirdly, 
it does not take into account whether the provision of the service implies the use of two 
connection points of the relevant leased lines. These issues have been discussed in bilateral 
contacts between the Dutch authorities and the Commission services. The Dutch authorities 
have subsequently published a notice on 30 May 1994 allowing voice services to closed user 
groups. However, the issue of voice services provided on leased lines and using only one 
connection with the public switched network is still under discussion. 
The Ministry for Transport and Public Works (Verkeer en Waterstaat) is the body entrusted 
with regulatory responsibilities for telecommunications and it may give detailed instructions 
to KPN concerning the execution of the general Directives (BART) and the obligations 
relating to mandatory services. This ministerial responsibility includes general tariff policy 
for public telecommunications services (which, in application, is similar to 'price capping' in 
the UK). 
PORTUGAL 
As in the case of the Netherlands, the regulatory framework for telecommunications in 
Portugal predates the adoption of the Directive. The "Basic Law on the Establishment, the 
Management and the Exploitation of Telecommunications Infrastructures and Services", Law 
88/89, ("Basic Law") was adopted on 11 September 1989 before the adoption of the Directive. 
This explains in part why the terminology used often differs markedly from that of the 
Directive. The Basic Law, and in particular the distinction between complementary and value 
added services, is technology-based rather than services-based. 
- 39 -
On the issue of reserved services, the Portuguese legislation does not define services whose 
provision is reserved to public carriers as narrowly as the Commission Directive. Firstly, 
Article 2(2) of the Basic Law defines "telecommunications for public use" as all services 
which are designed to meet the generic collective requirements for transmitting and receiving 
messages and information. This is a broader definition than the concept of public in the 
Directive. It is true that the Basic Law lists telecommunications for private use in Article 
2(3) and that this list encompasses at point h) "other communications reserved for the use of 
specific public or private entities by means of an authorization granted by the government 
under the terms of treaties or international agreements or special legislation". However, since 
the entry into force of the law, the Portuguese government has not adopted the necessary 
legislation to liberalise voice telephony or telex services provided for closed user groups. In 
September 1991, the Portuguese government announced the adoption of a ministerial order 
(diploma) on private networks to resolve this issue. By letter of 18 November 1993, the 
Portuguese authorities confirmed that they were still studying the issue and, in a subsequent 
bilateral meeting on 31 January 1994, no more precise undertaking on timing could be given. 
Secondly, under Portuguese legislation voice telephony is defined more broadly than in the 
Directive. The Basic Law does not define voice telephony. The definition is included in 
Article 1 of the former Regulation of the Public Telephone Service annexed to the Decree 
(Decreto-Lei) 199/87 of 30 April 1987. The Basic Law refers to the technical operation of 
a fixed subscriber access system (which it defines as the set of transmission means located 
between a termination point and the first concentration, switching or processing node) without 
distinguishing between the situation, where this "access system" is a leased line or the PSTN ; 
nor does it take into consideration the number of connections to the leased line which may 
be used. 
A third issue is the licensing conditions. According to the Directive, Member States may 
make the supply of telecommunications services subject to a licensing scheme, but only to 
warrant compliance with the essential requirements listed in the Directive. However, the 
Portuguese licensing scheme encompasses other obligations. 
The liberalised services are divided in two categories: "complementary telecommunications 
services" and "value added services" according to a technical criterion : the use of own 
infrastructure, and in particular, concentration, processing and switching nodes. Therefore, 
most liberalised services come within the fixed complementary services category. The two 
types of services each have their own licensing conditions. 
Article 4 paragraph 2 of the Directive requires Member States to ensure that there are no 
restrictions on the use of leased lines except those justified by essential requirements or the 
existence of the voice telephony monopoly. Article 14 of the Basic Law appears more 
restrictive as it allows only the use of leased lines voice traffic to the suscriber's own use or 
to the provision of complementary and value added services, and even requires a licence for 
the shared use of leased circuits. 
Portugal claims that its complementary services scheme (Portaria 930/92) is in accordance 
with Article 3 of the Directive. This issue is however not settled. 
Portugal separated regulatory and operational functions in 1989. According to the Basic Law, 
the Ministry is responsible for supervising and monitoring telecommunications. This includes 
the planning and co-ordination of the national public infrastructure and services which are 
- 40 -
considered essential. 
In practice the regulatory functions are delegated to the Institute for Communications of 
Portugal (ICP), leaving the Ministry to supervise the ICP and approve directives proposed by 
the ICP. 
SPAIN 
The Ley de- Ordenaciôn de las Telecomunicaciones, Law No. 31/1987 of 18 December 1987, 
("LOT") is the legislation in force relating to telecommunications activities in Spain. In light 
of the Directive, the LOT has been amended by Law No. 32/1992 of 3 December 1992, which 
limited the reserved services to the basic telephone service, telex and telegrams, and a Royal 
Decree 804/1993 of 28 May 1993 implementing Article 3 of the Directive as regards basic 
data switching services. 
As has been the case in some other Member States, the major issue in the Directive's 
implementation has concerned the definition of voice telephony and, hence, the reserved area. 
The LOT defines "basic voice telephony", in paragraph 15 of its annex, in terms identical to 
the definition of "voice telephony" in the Directive. However, following a complaint to the 
Commission, it seems that the Spanish authorities' understanding of this definition was not 
so clear and that, although defined in the Law, an administrative order would be required to 
define further Telefonica's basic voice telephony monopoly. This definition is not yet 
adopted. 
Spain originally requested an extension period for exclusive rights for simple resale, as 
allowed under Recital 11 of the Directive, although such a request was not maintained. As 
regards the grant of concessions for the provision of packet or circuit switched data services, 
a scheme for its regulation was created by the Royal Decree of 28 May 1993. The draft had 
been notified to the Commission, but the text adopted did not take account of all the 
Commission's remarks. Issues relevant to this, particularly regarding the scope of the scheme, 
are being further discussed with the Spanish authorities 
The regulatory powers referred to in Article 7 of the Directive are the responsibility of the 
Directorate General for Telecommunications (DGT). The DGT was created by Royal Decree 
of 19 June 1985. It grants concessions, authorizations and administrative licenses for 
equipment and services. The Director General for telecommunications is, however, also the 
Government Delegate on the Board of Directors of Telefonica He has the right to veto 
decisions of the Board on grounds of public policy. Moreover, Article 15 of the LOT allows 
for the appointment by the Government of five other members of the Board. 
UNITED KINGDOM 
The legislation in force applying to telecommunications services is the 1984 
Telecommunications Act which predates the Commission's Green Paper and Directive. The 
Act has been extended by a new policy building on the 1991 White Paper comprising 
amendments to existing licences, extensions of cable licences to include the provision of voice 
telephony services and the issuing of new licences. 
- 41 -
UK legislation has generally preceded the Commission's Directive. For exampler -the 
exclusive rights of BT to provide the telecommunications services covered by Article 2 of the 
Directive were abolished in the UK by section 2 of the Telecommunications Act of 1984. 
Section 5 requires all persons who run telecommunications systems to have a licence (which 
may be an individual or class licence) . 
As regards the provisions of Article 4 of the Directive, no precise definition of infrastructure, 
such as exists in Germany or the Netherlands has been set down. Section 4 of the TA instead 
defines a "telecommunications system" as : A system for the conveyance, through the agency 
of electric, magnetic, electro-magnetic, electro-chemical or electromechanical energy, of 
speech, music and other sounds 
visual images 
signals serving for the impartation (whether as between persons and persons, things 
and things or persons and things) of any matter otherwise than in the form of sounds 
or visual images; or 
signals serving for the actuation or control of machinery or apparatus 
The Secretary of State designates certain of these systems as "public telecommunications 
systems". Operators of public telecommunications systems are authorised by individual 
licences and are generally granted PTO status. Around twenty public fixed link operators have 
been granted such licences, as well as 126 cable TV franchisees. 
The 1984 Telecommunications Act, in conjunction with the Wireless Telegraphy Act 1949 
also ensures that the regulatory functions specified in Article 7 are carried out independently 
of the Telecommunications Operators. This is largely through the work of OFTEL, a non-
ministerial government department under the Director General of Telecommunications who, 
for the duration of his appointment, is independent of ministerial control. 
SWEDEN 
There has never been a legal telecommunications monopoly in Sweden. The de facto 
monopoly of Telia ("Televerket" at the time) was the result of a commercial process. 
The current Regulatory framework of telecommunications is set out in the 
Telecommunications Act (Telelagen) of 1993. Under this Act there are no exclusive rights 
to provide telecommunication services (Art. 2.1. and 4). Any operator has the right to obtain 
a licence and to supply telecommunications services. Reasons are given in case of refusals 
and Article 37 of the Act states that appeals against such refusals may be lodged with the 
administrative court of Appeal. 
Licences are required only for the operation of public networks and the provision of leased 
lines. Other services are subject only to a registration procedure. 
There are no restrictions on the processing of signals before or after transmission via the 
public network (Art. 6.1), nor is there any discrimination in the conditions of use or in the 
charges payable (Art. 6.2). 
As regards the separation of regulation and operation (Article 7 of the Directive), the 
- 42 -
Telestyrelsen (Telecom Agency) is responsible for ensuring that regulations are respected by 
all operators. The Agency was set up on 1 July 1992. Its functionning is laid down in 
Fôrording 1992:895. The Agency may adopt sanctions, including the revocation of licences, 
against operators which do not comply with their obligation. 
The Agency is headed by a Director General, under the supervision of a board, which is 
appointed by the Government. Telestyrelsen has also responsibilities in the defence area. 
The Agency is financed through fees levied on the basis of gross turnover of licencees and 
parties which registered. 
The main telecommunication operator in Sweden is Telia, which was incorporated as a private 
limited liability company on 1 January 1993 according to Law 1992:100. It is a 100 % 
publicly owned company, supervised by the Ministry of Transport and Communications. 
AUSTRIA 
Austria implemented the Directive mainly through its Telecommunications Act 
(Fernmeldegesetz) Nr. 908/1993, which entered into force on 1 April 1994. Austria has 
however not yet notified the implementing decrees of this law, nor the general usage 
conditions of the public network. 
The reserved telephone service is defined in Articles 44(2) and 2(6) of the Act. This 
definition does not fully correspond to the definition in the Directive. However, no licenses 
are required for the provision of liberalised services. Conditions for access to the public 
network and use of leased lines will, under Article 44(6) of the Act be laid down in the 
general usage conditions (Geschàftsbedingungen). 
The public telecommunications operator is the Post und Telegraphenverwaltung (PTV). The 
law entrusts the regulatory tasks to the Ministry of Public Economy and Communications. 
FINLAND 
The basic regulatory framework of telecommunications is the telecommunications act 87/183 
(Teletoimintalaki), which was amended in 1988, 1990 and 1992. 
Under this framework, there are no more special or exclusive rights for the provision of 
telecommunications services, including voice telephony, in Finland. The whole 
tlecommunications sector has been opened to competition. Public telecommunications 
networks are operated by organizations with an operating licence granted by the Government. 
Article 10 of the Act sets out the rights and duties of subscribers and in particular the right 
to lease lines as well as to use them to provide telecommunications services or to sub-lease 
them to others. 
Public switched data communications are subject to notification only (Article 5(2) of the Act). 
In 1994, there were 63 organizations with operating licences and 13 notified organizations 
operating public switched data communications. 
Articles 18 - 23 of the Act entrust the Ministry of Transport and Communications with the 
- 43 -
general supervision and promotion of telecommunications. The day to day enforcement of 
the Telecommunications Act is, however, entrusted to the Telecommunications Administration 
Centre, which is an agency under the Ministry of Transport and Communications. In 
principle the costs of the centre are covered by licence and inspection fees. 
Telecom Finland is 100 % state-owned but operates at arms length from the Ministry of 
Transport and Communications, although the members of its board as well as the top 
executives are appointed by the Government. 
- 44 -
ANNEX II 
LIST OF NATIONAL REGULATORY AUTHORITIES IN THE FIELD OF 
TELECOMMUNICATIONS 
The survey of the national regulatory framework of the Member States in annex I has 
been drafted on the basis of the information officially notified to the Commission. 
For more detailed information, interested persons should contact directly the National 
Regulatory Authorities of the Member States. The full address of these authorities were 
published in the Official Journal C 277/9 of 15 October 1993. 
Belgium 
i 
-+• Institut belge des services postaux et 
des télécommunications (IBPT) 
Avenue de l'Astronomie, 14 
1000 Brussels 
Denmark 
i 
•+-Telestyrelsen 
Holsteingade 63 
DK - 2100 Kobenhaven 0 
Germany 
i i i i 
i i i "+" i i 
i -+-i Bundesministerium fur Post 
und Telekommunikation 
Postfach 80 01 
D-53005 Bonn 
Greece Ministry of Transport 
Sygrou 49 
Athens 
Spain 
i i 
-+-Direction General de 
Telecomunicaciones 
5 a. planta 
Plaza de Cibeles S/N 
E-28701 Madrid 
France 
-+-Direction générale des Postes et 
Télécommunications 
20, avenue de Ségur 
75700 Paris 
Ireland Department of Transport, Energy 
and Communications 
Scotch Hause, 
Hawkins Street 
Dublin 2 
45 
Italy 
i 
i i Ispettorato générale delle 
telecomunicazioni 
Viale Europa 190 
00 144 Roma 
Luxembourg 
i 
-+-Ministère des Communications 
18, montée de la Pétrusse 
L - 2945 Luxembourg 
The Netherlands 
i Ministerie van Verkeer en Waterstaat 
Hoofddirectie telecommunicatie en Post 
Postbus 20901 
NL - 2500 EX 's Gravenhage 
Portugal 
-+-ICP 
Av. José Malhoa Lote 1683 
1000 Lisboa 
United Kingdom 
i 
•+• DTI 
151 Buckhingham Palace Road 
London SW1W 9SS 
Sweden 
-+• Telestyrelsen (Telecom Agency) 
Box 5398 
S-10249 Stockholm 
Austria 
i i 
-+• Bundesministerium fur ôffentliche 
Wirtschaft und Verkehr 
Kelsenstratëe 7 
A-1030 Wien 
Finland TelefÔrvaltningscentralen 
Hallonnâsgatan 8 
BP 53 
00211 Helsingfors 
ISSN 0254-1475 
COM(95) 113 final 
DOCUMENTS 
EN 08 15 
Catalogue number : CB-CO-95-144-EN-C 
ISBN 92-77-87692-1 
Office for Official Publications of the European Communities 
L-2985 Luxembourg