Opinion on the proposal for a European Parliament and Council Directive on a policy for the mutual recognition of licences and other national authorizations for the provision of satellite network services and/or satellite communication services (1) (94/C 295/04)

On 20 January 1994, the Council decided to consult the Economic and Social Committee under Article 100a of the Treaty establishing the European Economic Community on the abovementioned proposal.

The Section for Transport and Communications, which was responsible for preparing the Committee`s work on the subject, adopted its Opinion on 11 May 1994. The Rapporteur was Mr Mobbs.

At its 316th Plenary Session (meeting of 1 June 1994) the Economic and Social Committee adopted unanimously the following Opinion.

1. Introduction

1.1. The Satellite Licensing proposal is part of the Community liberalization process within telecommunications in general and satellite communications in particular.

1.2. The Commission published its Communication 'Towards Europe-wide systems and services - Green Paper on a common approach in the field of satellite communications in the European Community` [COM(90) 490] - 20 November 1990 (the Satellite Green Paper) in which it established the principle of Community involvement in Europe`s space effort which would be complementary to the role of the European Space Agency.

1.2.1. Council Directive 88/301 'Competition in the Markets in Telecommunications Terminal Equipment` (the Terminal Equipment Directive) liberalized terminal equipment for fixed networks.

1.2.2. Council Directive 90/388 on 'Competition in the Markets for telecommunications services` (the Services Directive) liberalized fixed telecommunication services, but only in respect of Value Added Networks (VANs), data and private voice.

1.2.3. The Commission published a satellite policy paper 'The European Community in Space; Challenges, Opportunities and New Actions` [COM(92) 360] - 23 September 1992, of which the basic principles involved had previously been endorsed by the Council in its Resolution of 19 December 1991 on the development of the Common Market for 'Satellite Communication Services and Equipment`.

1.2.4. Council Directive 91/263 'The approximation of the laws of the Member States concerning telecommunications and terminal equipment, including mutual recognition of their conformity` (the Satellite Terminal Equipment Directive) was extended by Council Directive 93/97 to cover earth station equipment.

1.3. The Commission issued a Proposal for a Directive on the Mutual Recognition of Licences and other National Authorizations to operate telecommunication services (the Mutual Recognition Proposal) in 1992. This concerned the mutual recognition of licences and other national authorizations to operate telecommunication services, including the establishment of a single Community telecommunications licence and the setting up of a Community Telecommunications Committee (CTC). That proposal did not deal with satellites. The Committee supported the 'Mutual Recognition Proposal` in its Opinion of 12 February 1993, subject to a number of reservations. The 'Mutual Recognition Proposal` was not approved by Council.

1.3.1. An amended proposal COM(94) 41 has been published. Generally the amended proposal adopts the same approach established for the Satellite Licensing Proposal taking into account the needs of telecommunication services. The Committee does not comment separately on amended proposals. Nevertheless, the Committee hopes that its Satellite Licensing views which are also applicable to the 'Mutual Recognition Proposal` will be noted. Since the Commission`s aim is to follow a similar approach for the two proposals, this should also apply to observations made by this Committee.

1.4. The Satellite Licensing Proposal for action in the satellite market follows upon the Council Resolution of 22 July 1993 in which all Member States: 'recognize as key factors in the development of future regulatory policy for telecommunications in the Community: ... the implementation of the principle of mutual recognition of national licences and authorizations based on harmonized conditions and with an interim solution based on one-stop-shopping procedure, as well as the develop-ment of the policy established in the Council Resolution of 19 December 1991 in respect of satellite communications, ...`.

1.5. Key actions taken so far are:

- Council Directive 93/97 supplementing Directive 91/263 in respect of satellite earth station equipment.

- The proposal for a Commission Directive [SEC(93) 1891], 1 December 1993, amending Directives 88/301 and 90/388 with regard to satellite communications. The Committee supports the Commission proposal in its Opinion of 26 January 1994. (1)

- This Satellite Licensing Proposal [COM(93) 652 final].

- The parallel Mutual Recognition Proposal formally issued as COM(92) 254, which has been amended and reissued as COM(94) 41 of 22 March 1994.

1.6. The Satellite Licensing Proposal marks a further step in the Commission`s important and continuing efforts to hasten the implementation of liberalization in the telecommunications sector generally.

1.7. The work of the Commission in the satellite sector (stemming from the Satellite Green Paper) is linked to the need for a coherent policy framework in the mobile sector as evidenced by its work towards a Green Paper on mobile communications [now issued as COM(94) 145 of 27 April 1994]. These initiatives confirm the comprehensive nature of the Commission`s work since the 1987 Green Paper on Telecommunications [COM(87) 290], which did not address those matters specifically related to satellite and mobile communications.

2. The Commission`s proposal

2.1. The aim of the Satellite Licensing Proposal is to remedy the current situation whereby any satellite network operator or satellite communication service provider who wishes to provide their services in more than one Member State must apply for the necessary licences in each of the Member States in which they wish to operate and in some States for each satellite they wish to use.

2.1.1. The Satellite Licensing Proposal aims for mutual recognition of licensing on the basis of harmonization of the national conditions for authorization of satellite services by service categories. It also provides for the possibility of mutual recognition for categories of services without harmonization where full harmonization does not seem required. Such a policy assumes that the full recognition of licences is a long term goal.

2.2. The main points of the Proposal are mutual recognition of national authorizations (Chapter II) and mutual recognition according to common licensing regimes and procedures for harmonization (Chapter III).

To achieve these, a two step approach is proposed:

First - ECTRA may be mandated by the Commission to elaborate the technical basis for harmonized licensing conditions.

Second - the Commission will test the technical basis provided against Community Law and policies.

After this, common licensing conditions would be adopted, in accordance with the responsibilities conferred on the Commission by the Directive.

2.2.1. The proposal provides for a transitional 'one-stop-shopping` regime (Chapter IV), prior to the development of the system of full mutual recognition (Chapter III). Under this regime, national procedures in respect of the application for and the granting of national authorizations and licences are to be coordinated. The advantages of such an interim system are recognized by four Member States - France, Germany, Netherlands and the UK. They are already operating an 'ad hoc` form of 'one-stop-shopping` procedure which proves that the idea, as an interim measure, is basically sound and can work.

2.2.2. In the 'Mutual Recognition Proposal` for a single telecommunication licence, now amended and reissued as COM(94) 41, the Commission proposed the establishment of a new Community Telecommunications Committee (CTC). This Committee will be set up by whichever Proposal - the Satellite Licensing Proposal or the amended 'Mutual Recognition Proposal` - is approved first. The CTC will comprise representatives of the Nation Regulatory Authorities (NRAs) and will assist the Commission in the implementation of the recognition procedure. The creation of a new Committee is necessary since the existing two Committees in this sector - the Open Network Provision (ONP) and the Approvals Committee on Terminal Equipment (ACTE) Committees - both have specific competence. The role of the CTC is to be broader in scope.

3. General comments

3.1. The Committee welcomes the Commission proposal and congratulates the Commission on its constructive efforts. Nevertheless, the Committee does have some specific comments which are set out in Section 4 of this Opinion.

3.2. Market

3.2.1. The European Satellite industry is a small one. According to the Commission, the market is currently about one percent of the total European telecommunication market. Of this about 80 % is broadcasting, 10 % telephony and 10 % business.

3.2.2. Satellite operators eagerly await an early introduction of measures for mutual recognition of satellite licensing. In particular, providers of satellite news gathering (SNG) services, to whom the ability to operate on a pan-European basis is essential, welcome a simplified procedure which should make the realisation of a pan-European service market a reality. Hitherto, the necessity for separate licensing by national regulators in Member States is time-consuming, expensive and time-wasting.

3.2.3. Development of the satellite sector, for example, for SNG and the utilization of the full potential of systems using Very Small Aperture Terminals (VSATs) can be of great benefit not only to large businesses but also to small and medium-sized enterprises (SMEs) with consequent benefits for the production of European equipment and the creation of European jobs.

3.3. Timetable

An early deadline for the adoption of this proposal will help the industry develop by creating a licensing regime designed to facilitate the provision and use of Europe-wide satellite telecommunication services.

3.4. Matters in the discretion of the Commission

3.4.1. To achieve harmonization of licensing procedures it must be recognized that substantial responsibilities will be given to the Commission, perhaps at the expense of discretion of the NRAs where there is a wider than national interest involved.

3.4.2. The Committee is concerned at the scope and scale of the discretion proposed to be given to the Commission under the Satellite Licensing Proposal. For example, the Commission has the power to identify the categories of services for which harmonization is required and to adopt the common licensing conditions implementing the essential requirements.

3.4.3. The Commission argues that it requires a certain amount of discretion in order to ensure a Community approach and to enable the realisation of a pan-European services market. The Committee recognizes that it may well be that, in order to kick start the Satellite Licensing Proposal, the Commission does need a certain amount of discretion. Notwithstanding this, the Committee submits that ultimately it should be the Council and the Member States that decide the appropriate amount of discretion required in the overall context of subsidiarity.

3.4.4. However, some of these concerns could be eased if the procedures for the adoption of measures by the Commission in this area are clear, open and transparent.

3.5. Licensing considerations

3.5.1. The principle of mutual recognition can only be applied fully where there are no limitations on the number of licences available. In view of this, such limitations should only be permitted if justifiable on the basis of essential requirements, which must be consistent with competition rules contained in the Treaty of Rome.

3.5.2. In this regard, the Committee is aware that the Commission is of the view that essential requirements should be limited only to justified areas such as the efficient use of radio frequency spectrum, electromagnetic compatibility requirements, security of network operations, maintenance of network integrity, interoperability of services in justified cases, data protection in justified cases and user safety and safety of employees.

3.6. Administrative procedures

3.6.1. In its Opinion on the proposed Commission Directive [SEC(93) 1891] (see Section 1.5) the Committee expressed the view that attempts at harmonization should not result in the formal requirements exacerbating the difficulties experienced by those operating and those providing services in the satellite communications sector. Cumbersome administrative procedures can have the effect of preventing the exploitation of rapid technical advances in the satellite sector.

3.6.2. Furthermore, in this regard, the judgement of the European Court of Justice of 27 October 1993 (OJ No C 316, 23. 11. 1993) on the national authorization of radio equipment should be taken into account. According to that judgment, Member States` governments are entitled to adopt their own authoriz-ation rules, but harmonized EC rules are to take precedence over national measures.

3.6.3. The Committee is concerned to ensure that procedures imposed under the Satellite Licensing Proposal do not result in procedures which will hamper the effective function of the satellite sector.

3.7. Frequency and site coordination procedure

3.7.1. The area of frequency allocation can present procedural problems and is not yet fully harmonized. In particular, problems arise where the band in question is not designated exclusively for use by satellite but is shared, for example with terrestrial services.

3.7.2. In some Member States restrictions (and in some cases total bans) are in place in respect of the use of certain bands or parts of bands in the radio frequency spectrum. For example, one Member State has placed a blanket ban on the use of the upper half of the 14.00 to 14.5 GHz band. This has important consequences in the licensing of VSATs and SNG.

3.7.3. The impact on the licencing process of conditions for frequency allocation cannot be underestimated. The Satellite Licensing Proposal fails to address this issue. The Committee therefore believes that greater attention should be given to overcoming impediments to the use of radio frequency spectrum for satellite network services.

3.7.4. The requirements as to whether site clearance is required vary throughout Europe as do site clearance procedures. The Satellite Licensing Proposal does not address this issue. As in the case of frequency allocation, the Committee believes that greater attention needs to be given to these problems.

3.8. Applicability

The Committee concurs with the view that those third countries whose markets are open to foreign owned service providers and who provide to Member States opportunities in the satellite services sector equivalent to those provided within the Member States should be afforded the opportunity to benefit from the provisions of the Satellite Licensing Proposal. This will help the extension of satellite services between those third countries and Member States; a goal stated in Section 4 of the Explanatory Memorandum to the Satellite Licensing Proposal.

3.9. IFRB

The Committee points out that the IFRB no longer exists. The Board functions of the IFRB have been transferred to the Radio Regulations Board and the secretariat functions of the IFRB have been transferred to the Radiocommunication Bureau.

4. Specific Comments

4.1. Article 2 - Definitions

4.1.1. The Committee understands the Commission needs to ensure that definitions are common to DIR 93/73, SEC(93) 1891, COM(93) 627 and COM(94) 41. It is important that the Commission definitions are understood by all the Sectors involved and are where possible already in use and thus leave no element of doubt as to their meaning.

4.1.2. This Article specifies a number of definitions and further provides that the definitions in the Directive contained in the Mutual Recognition Proposal shall apply, where relevant, to this Directive. The result of this is that the Satellite Licensing Proposal, as presently drafted, may contain some gaps. This is all the more relevant given the fact that it is not certain which Proposal will be adopted first. It may be more appropriate, in the circumstances, for each proposed Directive to contain definitions which stand alone.

4.2. Article 12 - One-stop-shopping

4.2.1. The transitional one-stop-shopping regime does not address the differing ways in which licences are granted within the Member States by NRAs or other relevant licensing bodies. This is particularly pertinent in relation to the selection of the single location at which applications and/or declarations can be filed. It is not clear whether this single location would be a particular NRA. The licensing procedure should be open, objective, transparent and non-discriminatory.

4.2.2. Ideally, the one-stop-shopping regime should be more precisely defined. In particular the Preamble to the proposed Directive envisages that bodies such as ECTRA and/or ERC could be relied upon for the administration of such a procedure. Article 12 does not go on to elaborate upon this. It is not clear whether the applicant would submit an application to a single NRA which would coordinate the licensing process on behalf of the NRAs in all other Member States to which the one-stop-shopping regime applies. Nor is it clear how the licence would eventually be granted under the one-stop-shopping regime (e.g. whether individual licences would be granted by each of the NRAs under their respective jurisdictions).

4.3. Article 21 - Access to Space Segment

The Committee has some doubt about the legality of what is proposed in this Article. Suffice it to say that the Commission has wide powers to ensure that undertakings within the European Union comply with their obligations under the Treaty of Rome and, in any event, each of the International Satellite Organisations has embarked on significant reforms. The Committee notes that the Commission is presently working on a paper on direct access to space segment capacity which is expected to amplify these matters.

4.4. Articles 23 and 24 - Appeal and Conciliation Procedure

Whilst it is desirable to have a form of conciliation and arbitration which provides some remedies without first having to resort to the Courts (see Articles 23 and 24 of the Satellite Licensing Proposal) there remains a question as to whether the Commission should be the ultimate arbiter. This touches on the discretion of the Commission and the composition of the CTC.

4.5. Articles 25 and 26 - The CTC

The Committee commented upon the position of the CTC in its Opinion on the Mutual Recognition Proposal. The Committee would like to restate its view that the CTC should not be an advisory but a regulatory committee, under the guidelines set out in the Council Decision of 13 July 1987: a procedure III(b) Committee would enable the Council to review the decisions of the CTC where appropriate, however, see comment in paragraph 3.4.3 above.

4.6. Article 27 - Applicability

4.6.1. It seems strange to see the legal basis of the Satellite Licencing Proposal as being both Article 100a and Article 235, as the former requires a qualified majority vote in Council, whereas the latter requires a unanimous vote. The use of Article 235 is based on advice taken by the Commission concerning the effect of Article 27(2) of the Satellite Licensing Proposal which seeks to withhold from third countries, or third country nationals, the benefits of the proposal. If this advice is correct, this particular provision will require a unanimous vote in Council in order to be adopted. The Committee is aware that there are like provisions in other proposals put forward by the Commission which favour countries affording equivalent opportunities to the Union because of the obvious benefit to the Union. The Committee suggests that the terms of this Article may be better expressed in terms of equivalence rather than to rules by percentage.

4.6.2. Article 27(1) states that 'Undertakings already established in a Member State shall be treated as Community Enterprises`. The implication of this provision is that an undertaking could qualify as a Community Enterprise merely by having, at the time when the Directive comes into force, a single office in any Member State. It is not clear from the wording of Article 27(1) exactly what is meant by 'already established`. This phrase should be clarified.

4.7. Article 30 - Fees

Member States may allow their NRAs to impose a 'reasonable fee` to cover the administrative costs incurred in the implementation of this Proposed Directive. It is not clear what is meant by 'reasonable` and concern is expressed that this fee should not be such that, for example, small and medium-sized enterprises cannot afford it. Account should be taken of the fact that what may be a reasonable fee for some may be prohibitive for others.

Done at Brussels, 1 June 1994.

The Chairman

of the Economic and Social Committee

Susanne TIEMANN

(1) OJ No C 36, 4. 2. 1994, p. 2.

(2) OJ No C 127, 7. 5. 1994.