COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 13.03.1996 
COM(96) 73 final 
COMMUNICATION FROM THE COMMISSION 
TO THE COUNCIL, THE EUROPEAN PARLIAMENT, 
THE ECONOMIC AND SOCIAL COMMITTEE 
AND THE COMMITTEE OF THE REGIONS 
UNIVERSAL SERVICE 
FOR TELECOMMUNICATIONS 
IN THE PERSPECTIVE OF A FULLY 
LIBERALISED ENVIRONMENT 
AN ESSENTIAL ELEMENT OF THE INFORMATION SOCIETY 

TABLE OF CONTENTS 
I INTRODUCTION 3 
II THE CURRENT CONCEPT OF UNIVERSAL SERVICE IN 
TELECOMMUNICATIONS IN THE EUROPEAN COMMUNITY 4 
III ISSUES FOR THE EVOLUTION OF UNIVERSAL SERVICE IN THE 
SHORT TERM 8 
IV THE EVOLUTION OF UNIVERSAL SERVICE FOR 
TELECOMMUNICATIONS AND ACCESS TO ADVANCED SERVICES IN 
THE CONTEXT OF THE INFORMATION SOCIETY 17 
V CONCLUSIONS 21 
ANNEX 1 TIMETABLE FOR ACTION IN THE SHORT TERM (1996-1998) 
ANNEX 2 UNIVERSAL SERVICE FOR TELECOMMUNICATIONS IN 
THE EUROPEAN COMMUNITY TODAY 
QUESTIONNAIRE SENT TO MEMBER STATES 
ANNEX 3 LIST OF ORGANISATIONS PROVIDING WRITTEN RESPONSES 
TO THE THEME PAPER ON UNIVERSAL SERVICE 
ANNEX 4 SUMMARY OF THE MAIN ISSUES RAISED 
IN THE PUBLIC CONSULTATION ON THE UNIVERSAL SERVICE 
THEME PAPER 
INTRODUCTION 
In the emerging information society more and more people - m private life and at 
work - depend on modern communications. To be atole to communicate and 
interact whether by telephone, fax, e-mail or electronic media is a crucial and 
decisive factor for every citizen and business. The policy of the European 
Commission towards the information society has from the beginning taken into 
account the need to avoid a "two-tier-society", divided between those who have 
access to the new possibilities and are comfortable using them and those who are 
excluded from fully enjoying their benefits. 
Universal service is a dynamic and evolving concept, it is one of the essential 
elements of this information society and the priority attached to it must be 
considered in the context of the Community's policy of fully opening 
telecommunications markets to competition from 1 January 1998'. 
The telecommunications sector is an area of startling innovation and rapid 
technological evolution. It is critical for the overall competitiveness of Europe's 
economy. 1998 is a central gateway to the information society as effective 
competition ensures that both business and residential users have the benefits in 
terms of choice, quality and the best possible prices. Within this framework, the 
current concept of universal service, found in the Voice Telephony Directive*, 
corresponds to the obligation to provide access to the public telephone 
network and to deliver an affordable telephone service to all users 
reasonably requesting it. This concept is improving the level of service 
currently found in the Community and operates as a guarantee that these 
advantages are widely spread and that the interests of consumers are actively 
promoted. 
In the light of the political agreements of 1993 and 1994 resulting from the 
Commission's 1992 Telecommunications Review3 in favour of the full liberalisation 
in the sector, the Council , the European Parliament , the Economic and Social 
Committee and the Committee of the Regions have all, recognised that 
liberalisation goes hand in hand with parallel action to create a regulatory 
framework which secures the delivery of universal service. 
The European Parliament emphasised: "the central importance of universal 
service principles, in order to ensure the complementarity between economic and 
social goals ... and the balance between liberalisation and the need to maintain 
basic, affordable services for all consumers", whilst Council identified universal 
service as permitting "access to a defined minimum service of specified quality to 
all users everywhere and, in the light of specific national conditions, at an 
affordable price". 
To respond to these positions, the regulatory framework for universal service at a 
Community level which has been put in place identifies the scope of such service; 
addresses the notion of affordabiiity and is in the process of establishing rules for 
financing that service in a liberalised environment. 
It is against this background that the Commission has prepared this 
Communication. It has done so in the light of the results of a survey of the level 
and quality of service found in the Member States and of a public consultation on 
universal service issues during Autumn 19958. (The detailed results are set out in 
the annexes two to four of the Communication). The aims of the Communication 
are threefold: 
Firstly, to describe the current concept of universal service in 
teJecommunications, both in terms of the regulatory framework and in terms of 
the current level of universal service provision in the Member States; 
Secondly, to address practical issues and propose solutions and action for the 
future development of universal service; and 
Thirdly, to place universal service for telecommunications in the broader 
context of the information society. 
THE CURRENT CONCEPT OF UNIVERSAL SERVICE ÏN 
TELECOMMUNICATIONS «SI THE EUROPEAN COMMUNITY 
The need for a concept of universal service at a European level 
In the past there was no harmonisation at a European level of universal service in 
the telecommunications sector. Priorities were set at a national level and in the 
absence of competitive forces in most Member States this produced mixed results; 
positive developments such as full network digitalisation in France or the very high 
levels of service penetration in Scandinavian Member States, but also worrying 
failures in certain countries in terms of poor service, long waiting lists to get a 
phone or long delays in repairing faults". 
Were such a pattern of very different levels of development, which characterised 
the monopoly environment, to continue unchecked, it would substantially 
undermine the goal of strengthening economic and social cohesion set out in the 
Treaty. The same concern to achieve balanced development within the different 
parts of the Community must also apply in a liberalised environment. 
In addition, the existence of a certain minimum set of services is essential for the 
development of the internal market. Different levels of service obligations in the 
Member States would hamper the take-off of Europe-wide telecommunication 
services. 
The absence of coherent national approaches to universal service could also 
create new barriers to effective competition. 
A further political impetus has been given with the entry into force of the 
Maastricht Treaty introducing the obligation to maintain a high standard of 
consumer protection within the Community's policies . In this regard, the 
competitive forces which liberalisation will unleash will be major factor in improving 
consumer choice and service quality. 
What is the universal service obligation being put in place in the European 
Community today? 
With the adoption by the European Parliament and the Council of the Voice 
Telephony Directive in December 1995 the Community has now for the first time 
identified the common scope of universal service obligations in the EC. In doing 
this it has chosen to create obligations which will guarantee a defined level of 
service in a liberalised environment and which will improve the current level of 
service in many parts of the Community. 
This detailed description of universal service found in the Voice Telephony 
Directive is completed by the package of measures, (which address the practical 
arrangements for universal service), which have been tabled as part of the 
preparation for a liberalised environment11. 
The final element in the current concept will be provided by guidelines which the 
Commission w'li use in assessing the way Member States propose to finance 
universal service. These will be published in September 1996. 
The definition of universal service which emerges from the framework outlined 
above sets the maximum scope of services which can be included in any 
calculation of the cost of the universal service. Only those costs may be shared 
amongst other market players. 
At the same time, Member States in line with subsidiarity remain free to set 
additional telecommunications-related obligations to provide particular 
technologies or facilities (such as digital mobile networks or ISDN services) and/or 
to set service and coverage targets at a national level, providing these are 
proportional, non-discriminatory, imposed in a transparent manner and consistent 
with the competition rules. Any additional financial burden associated with 
meeting such obligations must not funded out the mechanism established for 
funding universal service.. 
a. Scope 
The obligations set out in the Voice Telephony Directive comprise the 
provision of voice telephony service via a fixed connection which will also 
allow a fax and a modem to operate12, as well as the provision of operator 
assistance, emergency and directory enquiry services (including the 
provision of subscriber directories) and the provision of public payphones. 
Users should also have access to published information about the cost and 
prices of services, about their quality and whether targets for quality are 
being met13. 
By including network access within the scope of universal service, users are 
given the possibility of accessing not only the defined voice telephony 
service but all services that can be provided over today's 
telecommunications networks (i.e. every citizen will be able to access inter­
active and on-line information services including the Internet, provided they 
have a computer and a subscription with an Internet service provider14). 
Nevertheless, the quality and speed of the connection will influence the ease 
with which these services can be used. 
This scope meets the concerns of the European Parliament that users should 
have an efficient, reliable and affordable service, with defined (and monitored) 
levels of service in respect of the time taken to get a telephone connection 
installed; the quality of transmission and reception of calls and the time taken 
to repair faults. The Directive in promoting new services also meets the 
Parliament's call for highly specific service elements, such as the availability of 
itemised billing, calling line identification, touch-tone dialling and number 
portability15. 
b. Affordabiiity 
Whilst a political consensus has emerged on affordabiiity as a key element in 
any concept of universal service, this is not yet an explicit requirement of the 
Voice Telephony Directive. Affordabiiity is a matter to be determined at a 
national level because it is so closely linked to specific national circumstances 
and national policy objectives (such as regional development policy). 
The current concept of universal service simply allows national regulatory 
authorities to impose controls on pricing linked to universal service and 
regional development policies. Such an approach is consistent with the 
principle of subsidiarity. In contrast to areas such as technical performance or 
quality of service, where objective standards may be defined, it does not 
appear appropriate to establish a maximum or minimum level for affordabiiity 
(implying price regulation at a European level) which should apply to all 
Member States. 
Nevertheless, affordabiiity is crucial to the extension of 
telecommunications service to every citizen and progress made in Member 
States will be closely monitored (see Section III below). 
c. Financing of universal service 
The shift from a monopoly environment to competition means that rules are 
needed to determine the extent to which any financial burden associated with 
providing universal service is shared out amongst market players. Common 
rules across the Community are also needed to calculate how much providing 
universal service costs. 
The measures identifying the scope of universal service is therefore 
accompanied by principles for its costing and funding through the proposed 
framework for interconnection16, as well as a mechanism allowing the 
Commission to verify whether national schemes for universal service are in 
17 
line with the Community framework . 
This framework envisages payments being made either (i) into an 
independent universal service fund at a national level which would make 
payments to operators providing universal service or (ii) directly to operators 
providing universal service as an additional payment to the commercial 
charges for interconnecting with their network. 
These rules will be complemented later this year by the guidelines on costing 
and funding identified above. 
The regulatory certainty which the current framework is establishing has been 
essential to allow Member States to prepare their national regulatory environment 
in time for the 1998 deadline. Where this Communication refers to the Community 
framework it is therefore referring to this whole package of measures preparing 
the environment for full liberalisation, unless otherwise specified. 
The improvement of service levels between 1990 and 1995 
The level and range of telecommunications services offered in the European 
Union has improved over the last five years (See Tables in Annex 2). Users are 
seeing this in very practical ways. Choice is no longer limited to the colour of the 
telephone set. Waiting lists for a telephone line have been substantially reduced 
in almost every Member State. Faults occur less frequently and are repaired more 
quickly. In many countries customers are compensated if appointments are 
missed or the line is out of action for too long. 
In Denmark, France, The Netherlands, Finland, Sweden and the UK more than 9 
out of every ten homes have a telephone (see Table A1 in Annex 2), whilst in 
Germany the figure in very close to nine out of ten, even taking account of 
reunification. Improvements have also be seen in some of the less favoured 
regions of the Union, for example, the national phone network in Ireland and 
Portugal have been substantially extended with the percentage of homes with a 
telephone growing from 66% and 47% respectively in 1990 to 80 and 75% today, 
partly reflecting the investment provided through the Community's Special 
Telecommunications Action for Regional development (STAR) programme. 
In relation to the prices of telecommunications services, the general trend since 
1990 has been for fixed elements, (connection charges and rentals) to increase, 
as well as increases in peak rate local calling. At the same time, important 
reductions have been seen in international and long-distance prices and many 
Member States have extended the availability of cheap rate local calling to 
compensate for the increases in peak rate charges. From the questionnaire 
completed by the Member States, seven out of eight Member States who were 
able to provide an average figure for price changes showed that overall prices had 
decreased \n real terms by between 5 and 43%. 
User demands are becoming much more sophisticated. A rapidly increasing 
proportion of citizens are using a mobile telephone. In Scandinavian Member 
States the figure is close to one in four. At home the telephone line is no longer 
just connected to a telephone or an answering machine, it may be shared with a 
fax or a modem. There are a wide range of freephone and value-added services 
available and even in the basic telephony service many users are offered new 
advanced telephone facilities, such as the possibility of forwarding their calls to 
another telephone number or being informed that there is another call on the line. 
Whilst the overall trend is one of improvements in the level and quality of service, 
continued pressure through competitive forces and through regulation is required 
to ensure that this process continues and accelerates as competition takes hold. 
What are the reasons for this steady improvement in telephone services? 
Improvements in quality and choice are a direct response to the falling costs and 
greater reliability of new services and equipment. Competition too in terminals, 
value-added service and mobile communications have stimulated innovation, 
lower prices and better customer service. The separation of the operator and the 
regulator of telecommunications services, a requirement of Community law since 
1990, has led to more effective regulation as the State has sought to impose clear 
targets, often in the form of licence conditions or negotiated contracts, with its 
incumbent operator. 
Ill ISSUES FOR THE EVOLUTION OF UNIVERSAL SERVICE IN THE SHORT 
TERM 
It is clear from the public consultation that a range of concerns remain about both 
the current level of service and the impact of a liberalised environment. 
Concerns remain despite the overall improvements in service. 
Why does the Community at present not take a broader definition of universal 
service? 
How will the affordabiiity of universal service be maintained in a liberalised 
environment? 
- What will happen to uniform national prices in a fully liberalised environment? 
- How can universal service be improved in the less favoured and less 
populated regions and areas of the Community? 
- Is adequate service provided to users with disabilities or special needs? 
- Are quality of service standards being effectively monitored and enforced in 
the Member States and what will be the European Community's role in setting 
those standards? 
- How can users compare service levels, prices and even affordabiiity in 
different Member States more effectively and how can users have a stronger 
role in setting quality of service standards and the level of affordabiiity? 
Why does the Community at present not take a broader definition of 
universal service? 
Defining the scope of the universal service obligation represents a delicate 
balance. Too narrow an vision of universal service arid citizens may be kept out 
of full participation in society. Too broad a vision and the competitive forces which 
are the principal driver of better services, lower prices and greater innovation will 
be held back as new players in the market will be deterred from entering the 
market, it is in striking that balance that the interests of every citizen can be best 
secured. 
The universal service obligation does not include at this stage a requirement to 
provide leased lines18 or ISDN1". These are services whose provision on the basis 
of cost-oriented tariffs is, however, already either required or recommended 
throughout the European Union. Any broad extension of universal service 
obligations is felt to be premature at this stage, particularly because : 
- it could end up making users and households pay for services they neither 
need nor use; 
- the costs involved (where these have to be shared with the other players in the 
market, e.g. through a universal service fund) might actually deter market entry 
by those companies, delaying the arrival of the benefits which competition will 
offer to all users; and 
- it risks providing or even subsidising services which users may be able to pay 
for on a normal commercial basis. 
The provision of an affordable voice telephony service will already mean that 
households and businesses in any part-of the Community can talk to each other, 
send faxes and electronic mail, hook up computers to "surf" the Internet and other 
on-line services. This is the same telephone line over which services such as 
telephone banking, tele-shopping and on-line information services are already 
being consulted and down which even video-on-demand services could be sent. 
At the same time, the current failure in some parts of the Community (as shown by 
the results of the survey of Member States) to guarantee even this basic level of 
service would, if not corrected by a regulatory framework allowing new investment 
to proceed and a strong and active national regulatory authority, have risked 
increasing regional disparities and the creation of the two tier society identified 
above A first priority must therefore be the delivery of genuine universal 
service throughout the Community, and, in particular, throughout the Community's 
less favoured regions. 
All the same there is broad recognition that universal service is a dynamic and 
evolving concept and must respond to changes in the needs and 
expectations of Europe's citizens. This implies that the scope of universal 
service must be reviewed as a basis for more concrete policy action, where 
appropriate. Nevertheless those subject to universal service obligations require a 
degree of certainty against which investment decisions can be made. The speed 
of evolution of the concept has therefore to be balanced against the need for 
predictability for investment decisions. 
The Commission will therefore report by 1 January 1998 and, at regular intervals 
thereafter, on the scope, quality, level and affordabiiity of the universal service in 
the European Community and consider the need, in the light of the prevailing 
circumstances for adaptation of the scope of universal service at a European 
level, bearing in mind the need to ensure a predictable regulatory environment. 
The main issues to be addressed in that Report as well as the criteria for this 
evolution are returned to in Section IV below. 
How will the affordabiiity of universal service be maintained in a liberalised 
environment? 
Whilst costs have fallen dramatically for operators, these have not often been 
passed on in the form of lower prices for users. Price levels vary considerably 
between Member States (See Table A7 in Annex 2 for a comparison of 1995 price 
levels in ECU). Now, as competition approaches, operators are attempting to 
adjust their prices. This reflects both existing requirements of the Community 
framework for prices in a monopoly environment to be cost-oriented20, and the 
threat of competitors charging lower prices for the most profitable services (i.e. 
business, long-distance and international communications). 
This process of tariff rebalancing, resulting from the political decisions in favour of 
the liberalisation of the sector, means that for some users, particularly in the short-
term before real competition bites, telephone bills could rise21. This process 
remains a fundemental element of the preparation for a fully liberalised 
environment22. At the same time, it is essential to ensure that further 
progressive and necessary rebalancing does not adversely affect users, 
particularly residential consumers who make few long-distance and international 
calls and so cannot benefit from the lower rates in those areas. This fundamental 
concern was well reflected in the public consultation which raised the fact that the 
current framework, whilst promoting affordabiiity, does not yet impose 
explicit obligations for services to be provided at an affordable price 
In the short term it is very important to protect the most vulnerable groups of 
users, and residential users in general, from the effects of the rebalancing 
process. Member States should ensure that National Regulators adopt, where 
necessary, special tariff packages23, price caps24 and other mechanisms in order 
to moderate the effects of the rebalancing process on connection charges, 
monthly rental and tariffs. This is particularly important in the run up to a 
liberalised environment and for users in the Community's less favoured and less 
populated regions. Such targeted and special tariff schemes are already in place 
to varying degrees in all Member States and are listed in Table A10 of Annex 2 
Potential burdens associated with their provision may be financed out of the 
funding mechanism for universal service. 
As mentioned above, the Monitoring Report before 1 January 1998 will also 
assess developments in the pricing of different telecommunications services and 
consider the need for further action at a Community level to ensure affordable ' 
access for every citizen. 
Even so, the issue is affordabiiity rather than stopping any adjustment of pricing 
structures. The affordabiiity of the overall service for all users, and, especially for 
particularly vulnerable groups, such as the disabled, or those on low incomes must 
be maintained. Assessment of affordabiiity is principally an issue to be decided at 
a national level by the appropriate national regulatory authority within the 
framework provided by Community legislation, taking account of the specific 
national situation and the views of user and consumer organisations. Consumer 
organisations have also suggested the need for comparison at a European level 
of the relative affordabiiity of services. 
Affordabiiity is not only a matter of overall price, for many users it is also a 
question of managing weekly and monthly expenditure and being able to 
predict what the telephone will cost. 
As soon as competition is effectively established a much wider range of payment 
packages are likely to be offered, for example, spreading the installation charge 
over a series of quarterly payments or paying a higher monthly rental, but with free 
or cheaper local or national calling. Such flexibility would allow users, particularly 
those on low incomes, much better predictability over what the telephone would 
cost them each month. 
At the same time, many users also want more information from their bills about 
what they spend. 
Finally, users also want greater control over what they spend, for example, the 
possibility of barring calls to particular numbers, such as "premium" rate services 
or international calls. 
What will happen to uniform national prices in a fully liberalised 
environment? 
In a fully liberalised environment the way services are packaged and priced is 
likely to be much more innovative, offering real choice and potential savings to 
most users. At the same time, as highlighted above, a fundamental 
responsibility for national regulatory authorities will be to ensure that 
universal service is affordable for all groups of users, whether as a response 
to competition or as a result of regulatory intervention. 
This involves an assessment by the regulator of what in light of specific national 
circumstances can be considered as a "reasonable" price for users in particular 
regions. 
Member States currently require at least the incumbent operator to provide a 
standard nation-wide package of prices (effectively, a set of geographically 
averaged tariffs) for most, if not all telecommunications services (including basic 
voice telephony services). The result is that the same tariff bands are offered 
throughout the country, even if the cost of providing a connection and services in 
one region may be higher than in another. In the past this helped to ensure that 
services remained affordable for citizens in every part of a country. 
In a monopoly environment such geographic price averaging does not 
automatically mean that operators are making a loss in providing every service in 
10 
those high cost areas, because in the absence of competition they can charge 
prices for services which are not part of universal service, such as leased lines, 
which ensure a profit even in high cost areas.. 
In a liberalised environment, any approach to uniform pricing must guarantee 
and improve affordabiiity. However, the situation is altogether more complex 
than before. 
As competition establishes itself, particularly in cities and other areas which can 
be served relatively cheaply, new players may concentrate on customers there 
and offer lower prices than the incumbent. 
Strictly maintaining uniform national prices would (i) if prices were maintained at 
current levels, risk the incumbent operator losing substantial parts of its market 
share in the cities and low cost regions; (ii) if prices were lowered nationally to 
meet lower prices offered by competitors in certain areas, raise the amount of 
funding required from other market players to cover the gap left by the potentially 
lower revenues in high cost areas from which universal service had be funded . 
Competitive pressures are likely to encourage over time a progressive move away 
from strict geographic averaging towards considerably more flexible tariff 
structures, This is likely to mean that different tariffs are offered for the same 
services in different areas within a Member State. 
Greater flexibility must be conditional upon the regulatory framework (i) 
including adequate measures to ensure affordabiiity (such as those outlined 
above); (ii) ensuring that price increases for users in remote and rural areas, 
other than adjustments to achieve cost-orientation, are not used to 
compensate operators for losses in revenue resulting from price decreases 
elsewhere and (iii) ensuring that any differences in pricing between high cost 
areas and low cost areas do not endanger the affordabiiity of universal service. 
How can universal service be improved in the less favoured and less 
populated regions and areas of the Community? 
Whilst the current regulatory framework, (and in particular, the obligations in 
respect of the voice telephony service, interconnection and the minimum set of 
leased lines), has been designed to guarantee the provision of universal service 
throughout the Community, the Commission and Member States remain aware of 
the particular pressures faced in the less favoured and less populated regions . 
The issues of scope and affordabiiity of universal service, and of 
telecommunications services in general, are of critical importance to the 
Community's less favoured regions. This reflects the traditionally lower level of 
development, demand and incomes in such regions and the sometimes higher 
costs of installing, operating and maintaining facilities due to the location or 
climate. 
These concerns, highlighted by a number of operators, regulators and user 
associations located in these regions, become all the more critical in the context of 
the information society. The Commission will continue to work to ensure that 
a combination of liberalisation and new technologies reduces rather than 
widens existing regional differences within the European Community. 
Given that fuir liberalisation has not yet touched many of the Community's less 
favoured regions, it is difficult to assess its real impact and the positive effects 
which may be brought in terms of improvements in service quality, choice and 
11 
prices, as well as increasing private investment. Additionally, the costs of 
providing service in remote and rural areas are continuing to fall as a result of new 
technologies (such as mobile or wireless solutions) and may fall further, where 
telephony services can be offered in combination with other new services 
(including audio-visual services and information services). 
Experience in liberalised markets, such as the United Kingdom, Finland and 
Sweden, or in the rapid growth of digital mobile communications under a duopoly 
environment are however, encouraging, though some caution must be exercised 
in directly extending the experience of more developed countries in the 
Community with relatively higher standards of living to other regions in the 
Community, particularly given the higher relative current costs associated within 
providing universal service in less favoured regions27. 
On the other hand, there are important concerns about the more marked impact of 
price changes on both residential and business users in these regions and the 
speed with which they will enjoy benefits associated with competition compared 
with developed areas within the EC. Additionally, the process of liberalisation in 
releasing private investment may favour investment in services and infrastructure 
in areas of high demand and relatively low cost. 
The Commission must be vigilant against the danger that the different speeds at 
which territories of the Community equip themselves with the infrastructures, 
services and skills needed for the emerging information society may contribute to 
sustaining a "time gap" and to further widening of social and economic disparities. 
These issues must obviously be taken into account within the Community's 
cohesion policy. 
In relation to the twin concerns of encouraging network investment and the 
provision of services throughout each Member State and avoiding a significant 
time gap in development in different Member States, priority must continue to be 
attached at a national and Community level to the development and 
extension of existing networks. 
In addition to the framework provided by universal service, the Community 
Structural Funds, as well as other initiatives at Community and national level, will 
continue to contribute as a complement to private financing - to the task of 
upgrading and developing the telecommunications infrastructure in less favoured 
regions within the Community, as has been successfully achieved in many parts of 
Ireland. 
In particular, the completion of the programmes of network digitalisation, 
especially in Greece, Portugal, Spain and Southern Italy, should be an important 
priority. Account is also taken of the need for relevant training initiatives and for 
pilot projects aimed at stimulating awareness and demand. 
For all these reasons, there is a particular need for close monitoring of 
developments in these regions in order to take appropriate action to strengthen 
economic and social cohesion. Detailed aspects of this monitoring, particularly 
with regard to the evolution of prices and the collection of data allowing a 
comparison of the relative affordabiiity of services are set out below. 
In the light of such monitoring, the Commission will determine periodically whether 
the definition and scope of universal service has to be revised, or new or existing 
mechanisms (for example, regional development policies) used to take account of 
specific effects of liberalisation in these regions. 
12 
Is adequate service provided to users with disabilities or special needs? 
Certain groups of customers have special needs, which universal service today 
either does not always meet, or does not do so at an affordable price. This 
concern has been highlighted by the European Parliament. Telecommunications 
offers such users a real lifeline with the rest of their community and the concept of 
universal service should ensure that such users benefit from an equivalent level 
of service at an affordable price to that offered to users without disabilities, 
taking into account the state of network development and market demand. 
Examples cited in the consultation included both the provision of services in the 
home (such as video- or textphones for the deaf) and in public places. It could 
also include, where necessary, the provision of special services (such as relay 
services allowing textphone users to communicate with users without textphones), 
or specially adapted equipment. 
A second element in extending the current coverage of service to specific users 
might include the offer of special and innovative services (such as voice mail 
boxes in the public network) for users who cannot easily receive calls because 
they do not have access to their own telephone. Those benefiting from such a 
service, which is being trialed in a number of Member States, might include groups 
such as the homeless, thereby recognising the role of telecommunications in 
fighting social exclusion. 
It would be a matter of national social policy, rather than universal service funding 
mechanisms as to whether specific financial support was made available to 
ensure the affordabiiity of such services for particular groups of users. 
Are quality of service standards being effectively monitored and enforced in 
the Member States and what will be the European Community's role in 
setting those standards? 
The Voice Telephony Directive already requires Member States to set quality of 
service indicators for a range of different things, such as how long it takes to get a 
telephone, how long it takes a call to connect and what proportion of public 
payphones are in working order. This simply builds on current practice in most 
Member States. Results must be published of the performance of the operators 
required to meet these targets. 
Whilst this provides greater transparency, it will only be fully effective if supported 
by active monitoring, and where appropriate, enforcement of such standards (with 
an appropriate range of sanctions up to the possible withdrawal of licences, where 
there is a consistent failure to meet service targets) by the telecommunications 
regulator in the Member State. Furthermore, there should be clear and straight­
forward procedures allowing users to initiate complaints against the operator. 
Looking beyond the current framework, it is important that the different levels of 
service quality, as well as differing targets set at a national level, do not create 
barriers to the development of the internal market and distort competition within 
the Community. Equally, it is essential that in setting service levels Member 
States maintain a high standard of consumer protection. 
In this context and subject to the principle of subsidiarity, minimum quality of 
service targets should be defined at a European Community level as a reference 
within which detailed national targets (taking account of the specific situation of 
each Member State) would be set. 
13 
How can users compare service levels, prices and even affordabiiity in 
different Member States more effectively and how can users have a stronger 
role in setting quality of service standards and the level of affordabiiity? 
It is clear that despite overall improvements, there remains considerable variation 
in the quality and level of service in the Member States and in the degree to which 
sanctions exist and are used , where targets are not met by operators. This 
concern is compounded by the difficulties faced by some national regulatory 
authorities in obtaining basic indicators of universal service, such as the number of 
households with a telephone, and by the lack of comparability of certain of data 
between Member States. 
The obligations in the Voice Telephony Directive should help by imposing 
obligations to set and publish quality of service indicators at a national level. 
However, users seek more than this and the varying levels of service in the 
Member States impacts the provision of pan-European networks and services. 
More generally consumer involvement at both a national and European level in the 
setting of quality of service targets, and more generally, in decisions as to the 
future evolution of universal service, should be strengthened. 
MONITORING THE EVOLUTION OF PRICES AND THE RELATIVE AFFORDABILITY OF 
TELECOMMUNICATIONS SERVICES IN THE EUROPEAN COMMUNITY AND ADAPTING 
EUROPE'S TELECOMMUNICATIONS FRAMEWORK IN THE SHORT TERM IN RESPONSE 
TO THE CONCERNS OUTLINED ABOVE 
I. MONITORING THE EVOLUTION OF PRICES AND RELATIVE AFFFORDABILITY OF 
SERVICES 
In line with the overall proposal to review by 1 January 1998 the scope, level, 
quality and affordabiiity of universal service in the Community, the 
Commission intends, in close co-operation with the Member States and 
building on on-going work at a national level, to : 
V define a "basket of services" in order to provide comparable information 
about the relative affordabiiity of services within the Community and 
between different regions within the Member States; 
V identify the structure of spending on universal service in the Community 
(i.e. what proportion (at both a national and regional level) of average 
residential and business bills relate to rental; local, long-distance and 
international calls; and calls to value-added ("premium-rate" services), and 
V identify where the major costs of universal service are incurred (i.e. within 
urban or rural areas; on targeting subsidies to specific groups of customers or 
to particular high cost areas), within the Member States. 
The results collected will allow the Community and Member States to better 
target support and identify best practice. 
II ADAPTATION OF THE EUROPEAN TELECOMMUNICATIONS FRAMEWORK IN THE 
SHORT TERM 
The Commission intends to address the following issues, in particular through an 
amendment to the Voice Telephony Directive28: These steps will: 
14 
V Develop further the definition of universal service to provide a clear obligation 
for Member States to ensure its affordable provision29; to ensure that an 
equivalent level of service is offered to users with disabilities at an affordable 
price; to provide users with more information about and more control over 
what they are spending30, and to ensure users can access and use inter­
active services (such as tele-banking or automated switchboards)31. 
V Require Member States to remove restrictions which currently limit the offer of 
targeted or flexible tariff schemes; and to ensure that they take appropriate 
measures (e.g. targeted tariff schemes and price caps) necessary to 
maintain the affordabiiity of services for all users, as well as for particularly 
vulnerable groups, such as the elderly, those with disabilities, those who do 
not use the telephone very much or those on low incomes. These measures 
are particularly important in the run up to full liberalisation. 
V Taking account of the obligation progressively to adjust tariffs towards costs, 
require Member States to ensure: 
- that price increases in remote and rural areas are not used to compensate 
losses in revenue resulting from price decreases elsewhere; and 
- that differences between prices in high cost areas and low cost areas do 
not endanger the affordabiiity of universal service. 
V Ensure more information on the scope, level, affordabiiity and quality of 
service in the EC is collected". This is essential if universal service is to be 
kept under effective review and appropriate targets are to be set for service 
quality within the existing Community framework. 
V Define minimum quality of service targets at a European level as a basis upon 
which detailed national targets (taking account of the specific situation of 
those countries) would be set. 
Furthermore the Commission will 
V Encourage Member State and Community action to allow all users to have 
improved access to computer networks, such as the Internet", (in terms of 
faster network access speeds). 
V Report by 1 January 1998 and, at regular intervals thereafter, on the quality, 
level and scope of the universal service in the European Community. This 
Monitoring Report will look in particular at developments in relation to 
residential users and in the less favoured regions, including the progress 
made in rebalancing tariffs, . (Other issues to be addressed in that Report are 
set out in Section IV below). As mentioned above, the report will consider the 
need, in the light of the prevailing circumstances for adaptation of the scope of 
universal service at a European level, bearing in mind the need for predictably 
for investment decisions. 
15 
V Promote the greater involvement of consumer representatives in the decisions 
on the current and future scope of universal service (and in particular, in 
relation to establishing and monitoring of the quality of service and the 
affordabiiity of service). This will rely on the adequate availability of 
information on the scope, level, quality and affordabiiity of universal in the EC 
in order to ensure greater transparancy and effective involvement of 
residential users. Consideration will be given to a possible monitoring 
committee at a European level to represent consumer interests. 
A Timetable reflecting these measures is set out in Annex 1. 
IV THE EVOLUTION OF UNIVERSAL SERVICE FOR TELECOMMUNICATIONS 
AND ACCESS TO ADVANCED SERVICES IN THE CONTEXT OF THE 
INFORMATION SOCIETY 
Universal service is recognised as an essential element of the global information 
society. This was acknowledged at the special G7 Summit on the information 
society in Brussels in February 1995. The participating ministers identified 
"ensuring universal provision of and access to services" as one of the eight core 
principles behind the realisation of their common vision of the information society. 
The Community is supporting through the regulatory framework the delivery and 
development of universal service, whilst at the same it is looking beyond the 
current concept of universal service for telecommunications to promote actively, 
through a diverse range of initiatives the use of advanced telecommunications 
services in fields, such as education and healthcare, in the context of the 
information society, (for example, through pilot and stimulation projects, 
awareness building and development of public-private partnerships). 
The recent reform of telecommunications in the United States also looks beyond 
the current concept of universal service for telecommunications, which in their 
legislation consists, for example, in promoting widespread access to quality 
services at reasonable rates and ensuring that rural and high cost areas have 
access to telecommunications and information services at prices reasonably 
comparable with those offered in urban areas34. 
The US telecommunications legislation, however, looks beyond their basic 
definition of universal service to tackle within a regulatory framework the same 
priorities which are now on the Community's agenda. The US legislation identifies 
the provision of access to advanced telecommunications services for schools, 
healthcare and libraries as one of the principles for the "advancement of universal 
service" in the future. In contrast, to the approach in the Community, the United 
States appears to mix a policy on universal service for telecommunications with 
objectives linked to education, healthcare or information policies at a national 
level. 
In the Community, the regulatory approach to universal service for 
telecommunications is carefully circumscribed by the application of the principal of 
subsidiarity. This has limited action at a Community level to what is necessary for 
the internal market for telecommunications services and for the maintenance of a 
high standard of consumer protection. In any event, the evolution of the definition 
of universal service for telecommunications is only one of a number of factors 
which is influencing the roll out of advanced telecommunications services in the 
Community. 
16 
Criteria for the evolution of universal service for telecommunications 
in the information Society 
Determining the basis for the future evolution of universal service raises 
fundamental issues. Should universal service for telecommunications continue to 
be subsidised only by undertakings in the sector or should other means of funding 
(e.g. greater direct funding by the State / stimulation of public-private partnerships) 
be envisaged? Should the framework being put in place at a Community level 
simply provide a response to the risk of that market forces alone will not provide 
an adequate guarantee of affordable service for every citizen or should it be 
something more - seeking to steer and develop the evolution of markets and/or 
technologies? A simple answer cannot be given at this stage. In reality the 
challenges of the information society will be met by both an evolving concept of 
universal service and by a range of other public and private sector initiatives to 
stimulate demand for and supply of information society services. 
User demand and technological evolution must be the principal determinants of 
the future evolution of universal service35. 
Any extension is therefore likely .to combine a market-based analysis of the 
demand for, and widespread availability of, a particular service, and a political 
assessment of its social and economic desirability. Only when these two criteria 
are satisfied would it be justifiable to impose a legal obligation to guarantee that 
the service is universally available at an affordable price. 
This Communication does not attempt at this stage to identify telecommunications 
services which should be considered in the future for inclusion in universal 
service, but rather it points to the general areas where work is already underway in 
the context of preparing the information society. At the same time, the existing 
framework already requires Member States to set targets for the Community-wide 
introduction of certain advanced telephone facilities36 (which are not currently part 
of universal service) and this will remain an important element in the Community 
approach. 
As mentioned in Section II above, the Commission will carry out a comprehensive 
review by 1 January 1998 of the scope, level, quality and affordabiiity of universal 
service in the European Community and consider the need for adaptation of the 
scope of universal service at a European level, in the light of the prevailing 
conditions and taking account of the criteria outlined above. 
Examples of the issues linked to the future evolution of universal service 
obligations which will be considered in the First Monitoring Report 
In addition to assessing issues linked to the level and quality of the current 
universal service obligation, the Report will examine: (i) technical indicators of 
service levels (and whether cost burdens were associated with their provision), (ii) 
evidence of particular social or economic need, (iii) evolution of prices and 
relative affordabiiity of services and (iv) developments in other parts of the World. 
In relation to the first two issues, the report would consider, inter alia: 
Technical indicators would include for each Member State: 
- Level of household personal computer penetration and households with 
access to on-line services 
17 
'"*vmi 
- Level of network digitalisation 
- Level of business, residential and local community ISDN penetration 
- Level of penetration of tele-working 
- Percentage of schools, hospitals, libraries with access to on-line information 
services 
Issues of particular social or economic need would include: 
- Issues associated with educational and healthcare establishments 
- Issues associated with less favoured and less populated regions 
- Specific social needs of particular groups of users (such as users with 
disabilities) 
Promoting the information society 
In addition to the maintenance and development of universal service, public-
private initiatives will play a major role in promoting the availability of new 
telecommunications services in the information society. 
In the context of the information society, new inter-active services should be 
accessible to every citizen in the Community, so that the benefits of new 
technologies and services are felt in areas, such as education and training, 
healthcare and access to public information. This should in turn benefit the 
overall economic effectiveness of society. The principal role for 
telecommunications is to act as the highway over which many of these new 
services can be offered and competitive forces are stimulating the price reductions 
and innovation which are at the heart of the current revolution. 
There was a widespread consensus within the public consultation that whilst 
universal service for telecommunications cannot be divorced from this broader 
political vision of the information society, that neither access to such services nor 
the services themselves should be included at this stage in the current concept of 
universal service. 
Nevertheless the Commission has stressed the importance of education and 
training in the Information Society, notably in relation to equipping the workforce 
with appropriate skills for the information age with a view to fostering employment 
possibilities and overall competitiveness. The Commission has therefore 
committed itself to promoting access to and use of advanced communications and 
information services within the educational field. The provision of advanced 
telecommunications services, as well as improvements in service quality, prices 
and the speed of the network are all likely to result from a fully liberalised 
environment. 
At the same time, consideration should be given to the extent to which these 
developments can be further promoted by regulatory or other action. One specific 
issue may be whether schools, colleges and universities should be offered 
reduced prices for high speeds of network access or for the use of current or 
advanced telecommunications services. That in turns raises issues of the 
relationship between universal service for telecommunications and broader policy 
objectives in the educational area, and of how such discounted tariffs might be 
funded, where they represent a financial burden for the operator providing them. 
18 
(For example, should they be funded directly by the State as part of its education 
budget; through the mechanism set up for funding universal service for 
telecommunications; or through other mechanisms?). 
Such issues will be further considered in the forthcoming Communication on the 
Citizen and the Information Society, and also more broadly in the light of the 
comprehensive review of universal service for telecommunications in 1998. 
Generally, however, new and advanced telecommunications and information 
services are appearing primarily in response to market forces and user demand. 
The role of the Community, public authorities and other public institutions is, on 
the one hand, that of catalyst, and, on the other, to ensure a regulatory climate 
which is favourable to innovation. 
Action flowing from the recent legislation in the United States has been highlighted 
above. In Europe, a range of initiatives are underway, aimed at stimulating public-
private partnerships and strengthening awareness and demand. This reflects 
priorities established in the Communication "Towards the Information Society", 
COM(95) 24437. 
That Communication emphasised that the Community's role focused on (i) 
stimulation of projects (through provision of information and increasing awareness 
of information society initiatives; through brokering partnerships between actors in 
different sectors and between public and private sector organisations, and 
providing guidance on available finance) and (ii) the provision of financial support 
for certain projects by the Community which either cater for the relevant 
infrastructure and the development of awareness, skills or services (through 
funding via the trans-European networks framework; the Community structural 
and cohesion funds; the European Investment Bank and the European Investment 
Fund and through Community programmes dedicated to education and training, 
such as the SOCRATES and LEONARDO programmes), or which stimulate the 
necessary research and development activities, leading to new concepts, 
prototypes or services which are key to the advancement of the Information 
Society (through the RTD Framework Programme, and, in particular through the 
Advanced Communication Technologies (ACTS) programme). 
Public access to information society services 
The Commission through these measures is supporting the extension of "public 
access" to the information society. This involves the connection of schools, 
colleges, hospitals, oublie offices, libraries and other public access points into the 
information society . 
The Commission will explore ways of better co-ordinating the various on-going 
initiatives at a national level to enhance the impact on everyday life in 
Communication on the Information Society and the Citizen mentioned above. 
Public and "community" access may be of particular importance in less favoured 
regions, where there may be a risk of delay in accessing advanced 
telecommunications services if left to market forces alone. The Commission, in 
the framewoik of the Monitoring Report before 1 January 1998, will closely 
monitor developments, as public access may be a means, within a reasonable 
time scale, of overcoming the difficulties in providing access to many advanced 
services and sources of information for individuals and for the non-profit and 
voluntary sectors. These are groups which may otherwise be excluded because 
of the high-cost initial investments required in terminals, computers and network 
connections). 
19 
The Commission will keep the actual progress made in extending public access 
under review, both in the less favoured regions and in the Community as whole, in 
order to assess periodically the need for additional action or for any reshaping of 
the concept of universal service at a European level. 
Issues for further consideration 
A range of factors must be taken into account in the developing framework for the 
information society. 
- Low tariffs for use of the network are essential to the widespread take up of 
on-line information and services. 
- Many information society services will be provided without regulatory 
intervention. 
- Action may be needed to ensure that public institutions can access these new 
services. 
- Initiatives, in particular, stimulating public-private partnership, should continue 
to promote the availability and take up of new information society services, 
especially, with regard to their development and broader take up amongst 
residential users. 
- "Public access" should go beyond promoting physical connections to include 
adequate training, support and investment in equipment. 
Some of these issues such as the needs for low tariffs, are closely linked to the 
current framework for universal service; others, extend far beyond 
telecommunications to touch on policies for education, healthcare and training. 
The integration of a policy on universal service into the broader development of 
the information society is a matter for further consideration. This process will be 
helped by the Review announced in this Communication for 1998 of the scope, 
level and quality of universal service in the Community. In this respect, a Council 
Resolution is being examined on the use of multimedia technologies and services 
for educational purposes. The definition of future policy on universal service will 
also take account of the outcome of on-going and future debates, in particular, in 
relation to the White Paper on "Teaching and Learning : towards the learning 
society" in the context of the European Year of Lifelong Learning 1996, and the 
forthcoming Green Paper on the Social Aspects of the Information Society. 
V CONCLUSIONS 
This Communication has identified universal service as an essential element of 
the information society, but it is only one of several factors which are allowing 
Europe's citizens to enter into a new and exciting age of information. In order to 
accelerate and support the process of transformation, three sets of conclusions 
can be drawn: 
1 The current concept of Universal Service forms a firm anchor for the 
regulatory reforms underway at a national level to achieve the full liberalisation 
of the telecommunications sector in Europe. 
20 
- The current concept of universal service corresponds to the obligation to 
provide access to the public telephone network and to deliver and 
affordable telephone service to all users reasonably requesting it. 
The detailed elements comprising that service are defined in the Voice 
Telephony Directive and are sufficient for the drafting of national schemes 
for universal service according to the Full Competition Directive. 
- A framework for the costing and funding of universal service is found 
in the Interconnection Directive and the 'Full Competition Directive. 
Common principles are proposed to identify how much universal service 
obligations cost. These costs may be shared with other market players 
either (i) via a universal service fund at a national level or (ii) by direct 
payments to those providing universal service. Guidelines to be used in 
assessing national approaches to costing and funding are in preparation. 
- Where additional telecommunications-related obligations outside the 
scope of universal service are imposed by Member States, any additional 
financial burden associated meeting such obligations must not funded out 
the mechanism established for funding universal service.. 
Universal service in the Community can and should be strengthened In the 
short term: 
- Affordabiiity is at the heart of the framework for universal service for 
telecommunications. The requirement for affordabiiity must be made 
clearer. At the same time, Member States should ensure that 
appropriate measures are taken, (e.g. price caps, targeted tariff 
schemes) necessary to maintain the affordabiiity of services for all 
users, particularly in the run up to full competition. The Monitoring Report 
announced for 1 January 1998 will include an assessment of 
developments in pricing and the relative affordabiiity of 
telecommunications services within the Community. 
- For users in the rural or remote areas, price increases, other than 
adjustments to achieve cost-orientation, must not be used to 
compensate losses in revenue resulting from price decreases 
elsewhere. Furthermore, any differences in pricing between high cost 
areas and low cost areas must not endanger the affordabiiity of 
universal service. 
- The definition of universal service will ensure that an equivalent level of 
service is offered to users with disabilities at an affordable price and 
Member States are encouraged to provide citizens with improved access 
to computer networks and on-line services (in terms of faster network 
access speeds); 
- The Commission will place greater emphasis on quality of service and 
the level of affordabiiity at both a European and national level, (including 
on monitoring, enforcement and compensation when targets are not met); 
as well as providing a stronger role for the consumer voice, particularly, 
in defining standards, the level of affordabiiity and the future scope of 
universal service. 
21 
- The Commission will encourage action in the less favoured regions to 
accelerate the process of network digitalisation there. Developments 
will be carefully monitored to ensure that citizens in such regions benefit 
from the arrival of competition and the Commission will continue to 
work to ensure that a combination of liberalisation and new 
technologies reduces rather than widens existing regional differences 
within the European Community. 
3. Universal service is an evolving and dynamic concept and will play an 
important role in the meeting the challenges of the information society: The 
Commission will report by 1 January 1998 on the scope, level, quality and 
affordabiiity of universal service in the Community and consider the need, in 
the light of the prevailing circumstances, for adaptation of the scope of 
universal service at a European level, bearing in mind the need for 
predicatability for investment decisions. 
- Any extension of the current concept of universal service must combine a 
market-based analysis of demand for and availability of the service with 
a political assessment of its social and economic desirability. 
Public-private initiatives will play a major role in promoting the 
availability of new telecommunications services in the information 
society, particularly in the less favoured regions of the Community. 
- Public access is an important means of bringing the information 
society to every citizen. Progress in extending such access will be kept 
undei review to assess periodically the need for additional action or for 
any reshaping of the concept of universal service. 
The information society raises issues far beyond universal service for 
telecommunications. An overall Community policy for the information 
society must integrate aspects of education, healthcare and social 
policy. 
ENDNOTES 
1 See Commission Directive [../../EC] amending Commission Directive 90/388/EEC regarding the implementation of full 
competition in telecommunications markets ("the Full Competition Directive"). 
2 Directive 95/62/EC on the application of Open network provision (ONP) to voice telephony ("the Voice Telephony 
Directive"), OJ L321, 30.12.95 
3 Commission Communication on the consultation on the Review of the situation in the Telecommunications Services 
Sector, COM(93) 159 
4 Council Resolution 94/C48 of 8 February 1994 on Universal Service principles in the telecommunications sector, OJ 
C48, 16.2.1994 and Council Resolution 95/C258 of 18 September 1995 on the implementation of the future regulatory 
framework for telecommunications, OJ C258, 3.10.95 
5 European Parliament Resolution of 19 May 1995 on the Green Paper on the liberalisation of telecommunications 
infrastructure and cable television netwoiks - P.nt II A4-0111/95; OJ C151, 19.6 95 
6 Opinion of the Economic and Soci.il Committee ol 13 September 1995 on the Green Paper on the liberalisation of 
telecommunications infrastructure and cable television networks - Part II, OJ C301, 13.11.95 
7 Opinion of the Committee of the Regions on the Commission Communication: Europe's way to the information society. 
An action plan (COM((94) 347 final). CdR 21/95 ESP/ET/AG/ym and CdR 21/95 Appendix D/BAN/JKB/NF/as. 
8 A detailed questionnaire was completed by Member States on the level and quality of telephone services in their 
territory. The results of the Member State questionnaire are set out in Annex 2. More than 100 organisations 
attended a public hearing in October in Brussels and more than 60 written comments were received in response to a 
Theme Paper sent out to more than 400 organisations. A list of participants and a summary of the main issues raised 
is set out in Annexes 3 and 4. 
9 See the detailed description on the current level of service in Member States in Annex 2 
22 
10 Article 129a EC Treaty 
11 See Proposal for a European Parliament and Council Directive on interconnection in telecommunications ensuring 
universal service and interoperability through the application of the principles of open network provision (ONP), 
COM(95) 379, 19.7 95 ("the Interconnection Oiieclive") and the Full Competition Directive These set out in particular 
the principles to be used in working out the cost ol providing universal service and the systems (either a universal 
service fund or a system of supplementary charges) which can be used to share out any costs involved 
12 The Interconnection Directive sets out a technical description of the type of connection over which services are 
provided. It specifies that only the provision of the public fixed telecommunications network is part of universal 
service. Universal service does not mean that users have a right to a mobile telephone, although wireless technology 
represents an important way of delivering universal service in remote regions (for example by using a radio-link to 
connect a fixed telephone in a remote home or farm, instead of having to provide a fixed telephone line. 
13 Member States are required to implement the obligations set out in the Voice Telephony Directive by 13 December 
1996. 
14 Monthly subscriptions with on-line service providers are generally in the region of 4 - 15 ECU. The trend towards 
telecommunications organisations offering cheap Internet access to subscribers is likely to develop in Europe, 
lowering further the cost of accessing certain inter-active services. 
15 The Interconnection Directive requires Member States to introduce number portability in all major population centres 
by 2003 at the latest. For a description of these other services see the glossary with Table A6 in Annex 2. 
16 See the Interconnection Directive and the Full Competition Directive 
17 According to the Full Competition Directive these schemes must be sent to the Commission by 1 January 1997 and 
will be assessed to ensure, in particular, that the obligations proposed are non-discriminatory; proportional, transparent 
(i.e. clearly formulated so that applicants know the extent of their obligations in advance); based on objective criteria 
(allowing judicial review in the case of conflict) and imposed only on those undertakings foreseen by the Community 
framework. 
18 Council Directive 92/44/EEC of 5 June 1992 on the application of open network provision to leased lines, OJ L165, 
19.6.92 
19 Council Recommendation 92/383/EEC of 5 June 1992 on the provision of harmonised integrated services digital 
network (ISDN) access arrangements and a minimum set of ISDN offerings in accordance with open network 
provision (ONP) principles, OJ L200, 18.7.92 
20 See the Voice Telephony and Leased Lines Directives. In a monopoly environment operators enjoyed considerable 
freedom in setting their prices which tended to lead to substantial profits being made on international and long­
distance calls. Prices were not constrained by competitors who could otherwise have charged their customers lower 
prices, hi the absence of competition, the regulatory framework in the Community has obliged certain tariffs to be 
cost-oriented in the run up to effective competition 
21 indications of the level of rebalancing between 1090 and 1995 are set out in Tables A8 and A9 in Annex 2 
22 The requirement for cost-orientation is a central element in the principles governing tariffs for telecommunications 
services in the European Community (see the 1990 Open Network Provision Framework Directive (90/387/EEC) and 
the subsequent ONP directives on Leased Lines and Voice Telephony). 
The Full Competition Directive in Recital 17 calls for Member States to "phase out as rapidly as possible all unjustified 
restrictions on tariff rebalancing by telecommunications organisations and in particular those preventing the 
adaptation of rates which are not in line with costs and which increase the burden of universal service provision". 
Article 4C of the Full Competition Directive provides that where such rebalancing cannot be completed before 1 
January 1998 the Member States concerned shall report to the Commission on the future phasing out of the remaining 
tariff imbalances and that such a report shall include a detailed timetable. 
23 Targeted tariffs schemes designed, for example for low users, the elderly, or those on low incomes, can combine a 
low initial connection charge, low monthly rental and a limited number of free or cheap call units each month. 
24 Price caps operate by pegging annual price rises either for the whole telephone service or for specific components, 
(such as rental for residential users) at or below the rate of inflation. This can lead to real reductions in prices for 
users, whilst encouraging the operator to improve its efficiency. 
25 in reality, lower prices in a competitive environment are likely to stimulate telecommunications traffic lessening the 
overall impact of price competition on the total revenue of such operators. 
26 See Commission Communication on the consultation of the Green Paper on the liberalisation of telecommunications 
infrastructure and cable television networks, COM(95) 158, 3.5.95 and Council Resolution 95/C258 of 18 September 
on the implementation of the future regulatory framework for telecommunications, OJ C258, 3.110.95 
27 Estimates of the cost of universal service prepared for the Infrastructure Green Paper suggested a cost associated 
with universal service of between 1 to 2% of total turnover for most of the 12 Member States at that time. The figures 
for Ireland and Italy were around 3%, Spain around 6%, Portugal 7% and Greece 15%. It should be emphasised that 
these figures were estimates prepared without full details of the underlying cost structures. More comprehensive 
23 
studies are currently underway in almost every Member State. Initial indications point to figures well within the ranges 
suggested in the Infrastructure Green Paper 
28 Article 32 of that Directive already requires the Commission to propose a revision of the directive in good time to allow 
the European parliament to decide on it by 1 January 1998 
29 Affordabiiity will be assisted by the provision of free itemised billing on request and availability of selective call barring. 
Users should also be able to spread the costs of initial connection and operators should replace disproportionate or 
discriminatory deposit schemes with more proportionate means of credit control (such as pre-agreed credit limits). 
30 Examples of action to achieve this are itemised billing and giving all customer the possibility of call-barring. 
31 This requires completion by Member States of the on-going deployment of "touchtone" dialling in their networks 
32 An important element of quality of service at a national level is enforcement of quality of service targets and the 
existence of rights of redress for users and appropriate compensation mechanisms. 
33 This requires the provision of networks with the necessary transmission quality to allow users to access data 
communications services at commonly available speeds. 
34 The approach in the US envisages , in particular, a compensation mechanism to meet burdens associated with the 
provision of preferential tariffs offered to schools and libraries, though much of the detail still has to be worked out. A 
private foundation, The National Education Technology Funding Corporation aimed at promoting the financing and 
development of additional services is also being set up to attract private funding into the sector. 
35 In the United States four criteria have been identified against which possible candidates for universal service would be 
assessed: "(A) essential to education, public health or public safety, (B) have, through the operation of market 
choices by customers, been subscnbed to by a substantial majonty of residential customers; (C) are being deployed 
in public telecommunications networks by telecommunications carriers; and (D) are consistent with the public 
interest, convenience and necessity". These criteria highlight the mixture of universal service objectives and broader 
policy objectives linked to education or healthcare found in the draft legislation. 
36 The Voice Telephony Directive lists of these services. Table A6 in Annex 2 shows the extent to which some of these 
are already available in the EC. 
37 Communication of 31 May 1995 on a methodology for the implementation of information society applications and 
proposal for a European Parliament and Council Decision on a series of guidelines for trans-European 
telecommunications networks, COM(95) 224. The Communication identified a diverse range of projects related to 
applications, generic services and basic networks. 
38 The issue of public access has been addressed in "Building the European Information Society for us all" Interim 
Report of the High Level Expert Group on social and societal aspects of the information society. It is also being 
tackled in the on-going work of the Information Society Forum. The goal of connecting schools, hospitals and 
libraries is already being explored in some Member States and underpins the developing approach in the United 
States. 
24 
Annex 1 : Timetable for Action 
ANNEX 1 : TIMETABLE FOR ACTION IN THE SHORT TERM (1996-1998) 
PIH Action 
Before 30 June 1996 Proposal for a European Parliament and Council Directive 
amending the Voice Telephony Directive. 
Member States commence drafting authorisation schemes for 
voice telephony and public network providers as provided by 
the Full Competition Directive 
Member States concerned apply for derogations to the 1998 
deadline and provide all necessary economic data necessary 
for the assessment of the justification of such derogation as 
provided by the Full Competition Directive 
Common Position on the ONP Interconnection Directive 
(including principles for the costing and funding of universal 
service). 
Common Position on the proposed European Parliament and 
Council directive on a common framework for general 
authorisations and individual licenses in the European 
Community. 
Before 30 
September 1996 Communication on the Commission criteria for costing and 
funding of the universal telephone service in the EC 
Before 31 December 
1996 Common position on the proposal for a Council and European 
Parliament Directive amending the Voice Telephony Directive. 
Adoption of the ONP Interconnection Directive. 
Adoption of the Licensing Directive. 
Communication by the Member States of authorisation 
schemes for voice telephony and provision of public 
telecommunications networks including obligations related to 
universal service 
Before 30 June 1997 Decisions of the Commission on the authorisation schemes 
submitted. 
Publication in the Member States of information required by the 
Full Competition Directive with regard to licensing procedures 
and terms and conditions for interconnection. 
Adoption of the proposal for a Council and European 
Parliament Directive amending the Voice Telephony Directive. 
Before 1 January 
1998 Full Ifoeralisation of telecommunications services and 
networks, subject to possible transitional arrangements for 
certain Member States, where justified and subject to scrutiny. 
First Commission Report on the monitoring of the scope, level, 
quality and affordabiiity of the universal telephone service in 
the Community. 
25 
Annex 2 : The Universal Telephone Service in the European Union Today 
ANNEX 2: UNIVERSAL SERVICE FOR TELECOMMUNICATIONS IN THE 
EUROPEAN COMMUNITY TODAY 
This Annex presents the results of survey of the level of service currently found in 
the European Community. It addresses five areas : 
(I) General developments in the provision of telecommunications services; 
(II) Quantitative indications service penetration; 
(III) Qualitative indications of service quality 
(fV) the availability of advanced telephone services and 
(V) the level of tariff changes and the existence of special or targeted tariff 
schemes. 
The information is based primarily on the responses of the Member States to a 
questionnaire sent out by the Commission in Summer 1995. A copy of that 
questionnaire is provided at the end of this Annex. 
I GENERAL DEVELOPMENTS IN THE PROVISION OF TELECOMMUNICATIONS 
SERVICE 
In the last decade, a number of technical and service developments have had a 
considerable impact on the nature of the basic telephone service. 
1. The development of relatively inexpensive fax machines and modems means 
that ordinary telephone lines are being used to an ever increasing extent to 
communie ate data and images as well as voice, although at a relatively slow 
speed. 
2. The digitisation of the telephone network combined with improved signalling 
means that a range of supplementary telephone services are being offered on 
the basic telephone line. These services include call-forwarding, call transfer 
and call-waiting, voice-mail and services which allow the identification of the 
calling-party ("calling line identification"). These add-on services have the 
potential to generate significant revenues for telecommunications operators. 
In addition, it is now far easier to provide more sophisticated billing details to 
customers including itemised billing. 
3. Although many of the above-mentioned services are not yet extensively 
provided or marketed by all telecommunications operators, particularly to 
residential customers, most operators offer ISDN (integrated services digital 
network) service and some are planning to offer an ISDN connection at the 
same price as an analogue link in certain areas. ISDN is beginning to be used 
for applications where users require additional functionality. Examples include 
desk-top video-conferencing or data transfer, as an alternative to or back-up 
for leased lines, and for Group 4 or higher speed fax. 
4. There has been a dramatic growth in wireless telephony and in particular 
mobile cellular networks and subscribers. 5 per cent of telephone subscribers 
in the European Community are currently based on mobile networks1. 
Wireless-based telecommunications now demonstrates some significant 
operational and cost advantages over wire-based telecommunications for 
certain types of usage. In particular, providing a wireless connection to 
26 
Annex 2 : The Universal Telephone Service in the European Union Today 
customers in remote or scarcely populated areas is considerably cheaper than 
the installation of a fixed line. Wireless applications in the local loop are also 
being seen, particularly in central and eastern Europe, as one means of 
rapidly upgrading the network and meeting unsatisfied demand for telephone 
service or for introducing competition into the local loop. Examples include the 
use of wireless telephony solutions to deliver rural service in Spain2 and 
Germany, whilst Digital European Cordless Telephone (DECT) technology is 
being used for local loop competition in Finland). 
5. Satellite communications have not yet fulfilled their earlier promise in relation 
to the delivery of a universal telephone service, as until recently regulatory and 
technical constraints existed which combined to inhibit growth. However, the 
new regulatory environment, together with the emergence of satellite personal 
communications services may develop further the role of satellite based 
communications in connecting the remoter regions within the Community and 
in order to support this the Commission has proposed a framework for the co­
ordinated selection and licensing of satellite-based personal communications 
systems3. There is also scope for making temporary use of VSATs4 to serve 
isolated areas pending roll-out of a more permanent terrestrial infrastructure. 
6. The process of deregulation is increasingly allowing full advantage to be taken 
of developments in hybrid fixed networks (using fibre and then coaxial cable 
and/or copper for part of the local network) which support the joint provision of 
telephone service with cable television service, where new franchises have 
been awarded and the regulatory situation has permitted. The use of such 
technologies, combined with the advent of ISDN / broadband networks and 
digital compression technologies, has the potential to rewrite the economics of 
delivering universal service, whilst the falling cost of transmission should lead 
to tariff structures which are less dependent on distance and on the duration of 
the call. In such an environment, the combined offering of telephone, 
information and entertainment services once effective competition is 
established, may allow operators to price the telephony elements at a lower 
level reflecting the more efficient use of their networks and the dual source of 
revenue. 
27 
Arme* 2 : The Universal Telephone Service in the European Union Today 
H. QUANTITATIVE INDICATORS OF THE LEVEL OF TELECOMMUNICATIONS SERVICES 
The quality and teve* of telecommunications services in the European Union has 
shown a steady and significant improvement over the last five years. This is 
reflected in the detailed responses to the questionnaire completed by Member 
States and in many of the comments made in response to the Theme Paper. A 
number of features of the current environment should be highlighted. 
1. Overall, there have been important improvements in the Community in the 
number of households with a telephone (see Table A1). Whilst household 
penetration in France, the Netherlands and Scandinavia was already weH 
above 90% in 1990 and has improved since then, even more impressive 
growth has been seen elsewhere. In 1990 only 66% homes in Ireland, whilst 
today its 80% and for Portugal the level has risen in the same period from 
47.1% to 74.8%. However, it is notable that at least five national regulatory 
authorities even today do not have publicly available data on this basic 
measure of universal service. Furthermore, where data has been provided, it 
is not directly comparable between Member States. 
2. The average number for the EC of residential main lines per hundred homes 
(see Table A1), has also seen a substantial rise from 87 to 96 lines per 
household. These figures provide a more comparable measure of the 
situation between Member States, do not distinguish between those 
homes/individuals with more than one telephone line (e.g. business and/or fax 
line and residential line) and those with no telephone. This results in Denmark, 
France, Luxembourg, Finland and Sweden ail have a residential main line 
penetration in excess of 100%. 
28 
Annex 2 : lb* UniversalTelephone Sendee In the European Union Today 
Tabte A1 Telephone penetration rates within the European Community 
Country 
V. 
B 
DKa 
°4 EL 
E 
F 
IRL 
1 
L 
NL 
AUT 
po 
FIN 
SWEO' 
UK 
EC Average Percentage of households 
with A telephone1 
1Ô90 
n/a 
94.3 
80 
n/a 
n/a 
94 
§& 
n/a 
n/a 
93 
n/a 
47.1 
95e 
98.7 
88 
-1994 
n/a 
n/a 
89 
n/a 
n/a 
96.4 
80 
n/a 
n/a 
96.5 
n/a 
74.8 
97e 
98.7 
91.1° 
-Residential Main Lines per 
100 Households2 
1990 
81 
103 
81 
80 
80 
104 
60 
90 
88 
96 
n/a 
43 
103 
121 
89 
87 1994 
92 
106 
93 
96 
89 
111 
75 
99 
105 
96 
n/a 
64 
104 
121 
99 
96 
Source: National Regulatory Authorities (1995). 
n/a indicates that the NRA does not have this data available. EC average excludes Austria. 
Notes 
1. All data provided in this section of the table relates to the most recent period for which 
information is available (normally 1994). Where available, additional data is given in these notes. 
2. This indicator of residential telephone penetration is imperfect as it is not the same as the number 
of households which have a telephone; the latter indicator would have an upper value of 100. 
3. Source: Tele Danmark. 
4. Figure includes the new Bundeslânder. 
5. Figures refers to penetration rate for Portuguese mainland (excluding Madeira and the Azores). 
The household penetration figure in 1994 including those islands was 74.8%. 
6. Estimated figures for 1990 and 1995 
7. % relates to 1989 which was the last year for which figures were calculated, given the very high 
level of penetration achieved 
8. Data relates to March 1995 (Source: UK Family expenditure survey). 
29 
Annex 2 : The Universal Telephone Service in the European Union Today 
3. The general growth in service penetration extends to most other areas : total 
main lines (business and residential); mobile subscribers.and in the provision 
of public payphones. (see Table A2) For public payphones, the EC average 
has increased from 2.9 to 3.1 per 1000 population, with the percentage at a 
national level either staying the same or increasing, with the sole exception of 
Italy (where penetration was already the highest within the EC). 
Table A2 - Penetration of fixed and cellular telephones per 
100 population and payphones per 1000 population in the EC 
Country 
B 
DK 
D 
EL 
E 
F 
IRL 
I 
L 
NL 
AUT 
P 
FIN 
SWED 
UK 
EC Average Main Lines 
per 100 
1990 
39 
57 
40 
39 
32 
50 
28 
39 
48 
46 
42 
24 
54 
68 
45 
43 1994 
45 
60 
48 
48 
38 
55 
35 
43 
55 
51 
47 
35 
55 
68 
49 
49 Cellular 
subscribers 
per 100 
1990 
0 
2.9 
0.4 
0 
0.1 
0.5 
0.4 
0.5 
0.2 
0.5 
0.5 
0.1 
5.2 
5.6 
2.1 
0.9 1994 
0.7 
9.7 
3.0 
1.4 
1.0 
1.4 
1.7 
3.9 
3.2 
2.0 
3.5 
1.8 
13.3 
16.0 
6.1 
3.6 Payphones 
perl 
1990 
1.3 
1.3 
1.7 
2.1 
1.1 
3.2 
1.5 
7.7 
0.8 
0.5 
4.3 
2.6 
4.1 
4.3 
1.6 
2.9 000 
1994 
1.5 
1.6 
2.1 
3.5 
1.4 
3.5 
1.8 
6.8 
0.9 
0.7 
4.3 
3.3 
4.6 
3.7 
2.1 
3.1 
Source: National Regulatory Authorities; (1995) 
30 
Annex 2 : The Universal Telephone Service in the European Union Today 
III QUALITATIVE INDICATORS OF THE LEVEL OF TELECOMMUNICATIONS SERVICES 
1. Alongside improvements in overall numbers, almost every Member State now 
sets, monitors and publishes results in relation to quality of service targets. 
This practice has now been reinforced by the requirements of the Voice 
Telephony Directive (see below). These indicators, which are generally, set in 
a manner to require annual improvements in the level of service, provide users 
with information about what they are entitled to expect and as such they are a 
crucial element of universal service. 
At the same time, the results of the questionnaire have indicated the 
considerable divergence between the standards set and/or achieved in 
different parts of the Community, and show the difficulty in comparing the 
position in each Member State. The results are summarised below: 
2. Length of time for installation of a telephone (see Table A3). 
Targets are set in almost all Member States for installation times with most of 
them also publishing some information on the supply times achieved. The 
average length of time to obtain a telephone in 1995 in the Member States 
varied from 1 day in Sweden to 45 days in Austria and 220 days in Greece. 
Operators in most Member States complete a high proportion (60-80%) of 
installations within 5 to 20 days. 
31 
Annex 2 : The Universal Telephone Service in the European Union Today 
Table A.3 Target periods for network connection and supply times achieved 
in the EC1 
B 
DK 
D 
EL 
E 
F 
IRL 
1 
L 
NL 
AUT 
P 
FIN 
SWED 
UK Information 
Published 
Yes 
Yes 
Yes 
n/a 
No' 
Yes 
Occasionally10 
n/a 
n/a 
n/a 
n/a 
Yes 
Yes 
n/a 
Statistics 
published regularly 
by BT and Mercury 
only Target 
90% within 20 working days* 
95% on installation date agreed 
upon with customer. 
Remaining 5% within 10 days. 
80% within 20 working days 
80% of new connections within 
30 days5 
n/a 
Within 5 working days0 
n/a 
For new connections: 60 days 
For take-overs: 30 days 
n/a 
1 month 
n/a 
Target: 2 months (95)/1.5 
m(96)/1 m(97)12 Minimum 
level : 
2.8/2.4/2 months 
n/a 
Within 5 days14 
87": For residential customers: 
within 8 working days. 
For business customers: within 
6 working days 
Mercury. Access for indirectly 
connected customers: within 2 
days of order16 Actual supply time 
90.9% within 20 working days 
61.3% within 5 working days3 
98% within target 
87.1% within 20 working days in Western Lander 
42.3% within 20 working days in Eastern Lander 
98.3% of lines provided on date agreed with 
user4 
220 days on average0 
5 working days on average 
8 days on averagey 
11 working days on average 
75% of customer orders completed within 2 
weeks11 
97.8% of connections within targets 
60% within 30 days 
89% within 3 months 
11% over 3 months 
96% within target 
45 days on average 
0.4 months average (Sept 95) 
5.4 days on average13 
Less than 1 day on average 
BT: For residential 85.3% satisfied target 
For business customers 76.4% satisfied 
target15 
Mercury. 72.8% of connections on date agreed17 
n/a=data not available 
NOTES Source: National Regulatory Authorities (1995). 
1 All data provided in the table relates to the most recent period for which information is available (normally 1994). Where 
available, additional data is given in these notes. 
2 Target set in Belgacom's Management Contract. The target set for 1995 is 80% of connections within 5 working days. 
3 In 1993:26.6% within 5 working days and 83.9% within 20 working days. 
4 These figures relate to the second half of 1994. In first half of 1994 83% of lines provided within 20 days in Western 
Lânder. 
5 Target set for 1995 
6 Data relates to 31.12.94 
7 Information provided to the Spanish Advisory Telecommunications Council. Public can obtain information given to that 
body. 
8 Target set in France Telecom's contract with the Direction Générale de Postes et Télécommunications (DGPT Annual 
Report (1994)). 
9 Figure as at 31 December 1993 (Source: DGPT Annual Report (1994)). 
10 The last set of information was published on 21 March 1994. 
11 In 1993:19 days on average. 
12 Target and minimum acceptable level set in contract between ICP and Portugal Telecom and covers period 
1995/1996/1997 
32 
Annex 2 : The Universal Telephone Service in the European Union Today 
13 In 1993:5.3 days on average; in 1992:5.5 days on average 
14 Target forms part of Telia's service warranty. 
15 In addition to requesting a direct connection to the Mercury Network, users can access Mercury's long­
distance/international network indirectly via BT or other local connection. Access is obtained by dialling a specific preface 
(132) after subscribing to Mercury. 
16 Figures relate to October 1994 to March 1995. For April 1995 to September 1995, corresponding figures are 86.9% and 
78%. 
17 Mercury completed on average 82.5% of connections on date agreed with the customer in 1993. 
33 
Annex 2 : The Universal Telephone Service in the European Union Today 
3 Fault repair time (see Table A4) 
Targets are used in all Member States, and are generally set for % of repairs 
within one working day and achievement of targets generally in the range of 
85-95%. Additionally, operators in twelve Member States currently offer 
compensation to customers, where certain repair targets are not met. 
Table A4 : Target periods for fault repairs, repair times achieved and 
compensation schemes available in the EC1 
Country 
B 
DK 
D 
EL 
E 
F 
IRL 
1 
L 
NL 
AUT 
p10 Fault repair times 
Target2 
71% before end of next working 
day3 
100% within 12 working hours 
80% within 3 working days 
60% within 24 hours1* 
Within 6 days0 
92% before end of next working 
day7 
n/a 
n/a 
Within 5 days0 
Within 12 working hours 
Within 1 day6 
Objective : within 2 working days 
83%(95)/ 85%(96)/ 90%(97) 
Minimum level: 75%/80%/85% Actual repair time 
81.3% of repairs within targets 
91% within target. 
82.5% of repairs within target 
57% within target 
98.4% of faults attended to 
within 24 hours 
86.3% of repairs within target0 
90% within 2 daysy 
67.3% same day 
97.1% within 2 days 
86.2% same day 
100% within 10 days 
98% of repairs within target 
93% within 24 hours 
92% within 2 working 
days(September 1995) Compensation 
Schemes 
n/a 
If Tele Danmark defaults on the 
time 
of execution concerning the 
change of an existing connection 
to the public telecommunications 
network, or if faults occur in the 
telecommunications network 
leading to interruptions of the 
connection, Tele Danmark shall 
make a proportional reduction in 
the subscription charge for the 
period in question, provided that 
the amount exceeds DKK 25. 
The amount shall be deducted on 
the subsequent invoice for 
subscription charges. 
Graduated system of discounts 
(up to a full 100% discount) for 
network connection delays and 
compensation schemes for 
network connection and fault 
repair delays depending on 
nature of service and length of 
delay4 
Basic charge reimbursed if repair 
time target not satisfied 
Reimbursement of a 
proportionate part of the monthly 
line rental for repairs exceeding 
repair time target 
n/a 
No schemes in operation 
n/a 
Rental charge reimbursed if 
repair time target not fulfilled 
Twice the monthly rental will be 
reimbursed if repair targets not 
met 
Reimbursement of 1/30 of 
monthly line rental for every day 
of delay to line repair in excess of 
repair time target 
Reimbursement of the monthly 
subscription corresponding to the 
number of days for which service 
was interrupted 
34 
Annex 2 : The URfcefeal Telephone Service In the European Union Today 
fm 
SWED 
UK n/a 
Within 1 working day12 
BT. by end of next working day0 
Special services guaranteeing a 
quick response are offered at an 
extra fee 
Mercury. For 2100 service, within 
24 hours; for indirect service, 90% 
of faults within 24 hours 66.4% within 24 hours1' 
93% of repairs within target 
98.9% of business customer 
faults 95.2% of residential 
customer faults repaired within 
2 working days13 
68.3% within 4 hours 
94.1% within 48 hours There is a reimbursement of a 
monthly basic fee if the line is out 
of order for more than 48 hours 
within one month. 
Discount of quarterly fee if new 
connection not within 5 days or if 
fault not repaired within repair 
time target 
Compensation available for 
various service failings either on 
the basis of a daily rate or actual 
financial loss, up to maximum of 
£100014 . 
Compensation available for late 
delivery of service depending on 
nature of service and length of 
delay, up to maximum of £5000 
n/a: data not available 
Source: National Regulatory Authorities (1995) 
NOTES 
1 All data provided in this table relates to the most recent period for which information is available (normally 1994). Where 
available, additional data is given in these notes. 
2 Where possible and where no specific target has been provided repair time targets have been adduced from time limits 
used in the corresponding compensation scheme for the purposes of determining entitlement to compensation. See 
footnote 6 below. 
3 Target set for 1994 by management contract between Belgacom and the Belgian Government. The target has been set at 
76% for 1995. 
4 For example, a network connection delay of up to 10 working days will entitle the subscriber to a discount of up to 30% on 
the connection fee and a delay of over 2 working days in repairs to basic telephone services entitles the subscriber to 
50DM. 
5 The Special Circular of 24 July 1995 amending the Greek Telephone Regulation imposed a target of 5 working days for 
1995 and of 3 working days for 1996. 
6 Target adduced from time limits adopted in compensation scheme for purposes of determining entitlement to 
compensation. 
7 Target set in France Telecom's general contract with the Direction Générale de Postes et Télécommunications (Source: 
DGPT Annual Report (1994)). 
8 Figure as at 31 December 1993 (Source: DGPT Annual Report (1994)). 
9 This figure relates to customer reported faults. With regard to line faults 88% are repaired within 2 days. 
10 Target and minimum acceptable level set in contract between ICP and Portugal Telecom and covers period 
1995/199671997. Compensation available after 3 days without if fault is operators responsibility and after 10 days without 
service if force majeure. 
11 In 1993,73.5% of faults were repaired within 24 hours. 
12 Target forms part of Telia's service warranty. 
13 Figures relate to period April to September 1994. In the same period, 87.6% of business and 75.5% of residential faults 
were repaired within 5 working hours or 9 working hours respectively or on a date agreed with the customer. 
14 On the daily rate basis, the customer is entitled to claim one month's rental for each day of delay. 
35 
Annex 2 : The Universal Telephone Service in the European Union Today 
4 Percentage of public payphones in working order (see Table A5) 
Payphones have a particular role in compensating for the lack of telephone 
penetration, especially in rural areas. For those Member States where data is 
available, a very high proportion of those payphones were in working order 
(between 92 and 96%). Nevertheless, National Regulatory Authorities in 6 
Member States were unable to provide data on the percentage of public 
payphones in working order. 
Table A5 Average percentage of public payphones in working order 
in Member States in 19941 
B 
n/a OK 
92^ 
973 D 
n/a EL 
95 E 
n/a 
4 F 
n/a 5 IRL 
Over 
93 \ 
n/a I 
Over 
97 NL 
95 AUT 
97 P 
99.9 FIN 
n/a SWED 
+/-9B UK 
94.6e 
n/a: data not available 
Source: National Regulatory Authorities (1995). 
NQTES 
1 AM date provided in the table relates to the most recent period for which information is available (normally 1994). Where 
available, additional data is given in these notes. 
2 Com operated payphones. 
3 Card operated payphones. 
4 The average repair time in public telephones of aH types (that is in public and private places) is 2.8 hours; for public 
telephone boxes it is 10.6 hours. 
5 France Telecom's general contract with the Direction Générale de Postes et Télécommunications stipulates that only 5% 
of public payphones should remain out of order for more than 24 hours. As at 31 December 1993 4.8% remained out of 
order for a longer period (Source: DGPT Annual Report (1994)). 
6 This figure relates to BT public payphones for the period October 1994 to March 1995. For the preceding 6 month period 
the figure was 95.9%. 
5. Supply time and quality of service indicators required by Annex II of the 
ONP Voice Telephony Directive 
According to the Voice Telephony Directive5, Member States will be required 
from the end of 1996 to set and publish targets for supply times and quality of 
service indicators for those operators covered by the Directive, in respect of: 
Supply time for initial network connection 
Fault rate per connection, fault repair time and call failure rate 
Dial tone delay and call set up delay, 
transmission quality statistics, 
Response times for operator services 
The proportion of coin and card-operated public pay-telephones in 
working order 
Billing accuracy 
Results must be published annually and the Commission will publish in the 
Official Journal, where that information can be found at a national level. The 
choice of indicators in part reflects the work already undertaken within the 
OECD, ITU and ETSI6. 
36 
Annex 2 : Trie Unr^rsaJ Telephor» Swvtae in the Eurorjean Union Today 
IV AMAtU^BJIJW OTAF^^ 
1. An increasing rangelof advanced telephone features (see Table A6) are now 
currently commercially available or on trial throughout the Community, though 
the level of deployment is often linked to the extent of digrtaltsation of national 
networks. 
• Touchtone (DTMF) dialling is available in aJl Member States (though 
sometimes confined to subscribers connected to a digital exchange). 
• Call waiting and call forwarding services are also fairly widely available, 
whilst calling line identification is offered in 5 Member States, with operators 
in a further three Member States including in an ISDN offering, and plans for it 
to be offered or piloted in three more Member States in 1996. 
• Call barring facilities are available in twelve Member States, (although in 
Austria, Belgium, Denmark, and Finland) this possibility is currently limited to 
certain value-added services). 
• Voice mail services are available in 7 Member States, with trials underway in 
a further three Member States, and the facility being a common feature within 
the GSM network. 
2. Three of these facilities (i.e. Touchtone Dialling / Call Forwarding / Calling Line 
Identification at a national level) are identified in the Voice Telephony Directive 
as elements of the telephone service which should be introduced according to 
nationally set dates. They are increasingly available in substantial parts of the 
network. 
Call Waiting is a service which permits a subscriber to be notified (by a specific tone) of an 
incoming call while engaged in another call. The user then has the choice of accepting, rejecting 
or ignoring the waiting call. 
Call Forwarding is a service which permits a served user to have the network send to another 
number all incoming calls for the served user's number. (This service should be distinguished 
from call forwarding when busy and call forwarding when no reply). 
Call Transfer is a service which enables a user to transfer an established call to a third party. 
For the original call, the served user may have been either the calling or called party. 
Calling Line Identification is a service which provides the calling party's number to the called 
party prior to the call being established. It may be possible that the calling party restricts the 
presentation of the calling party's number to the called party. 
Dial-Tone Multi-Frequency (DTMF) operation / Touchtone Dialling means the facility 
offering users Touchtone dialling, which is essential for the use of many new interactive 
telephone services. This is defined in the ONP Voice Telephony Directive i.e. the fixed public 
telephone network supports the use of DTMF telephones for signalling to the exchange, using 
tones as defined in ITU-T Recommendation Q.23, and supports the same tones for end to end 
signalling through tne network, both within a Member State and between Member States. 
Integrated Service* Digital Network (ISDN) is a network wfuch attows, via a stngte access, 
using the existing subscriber line, the transmission of voice telephony, text, data and Image®. 
37 
Annex 2 : The Universal Telephone Service in the European Union Today 
Table A6 : Availability of Advanced Telephone Facilities in the EC 
Country 
B 
DK 
D 
EL 
E 
F 
IRL 
1 
L 
NL 
AUT 
P 
FIN 
SWED 
UK Dual-tone 
Multi-
Frequency 
(DTMF) 
Dialling 
Yes' 
Yes * 
Yes 
Yes5 
Yes 
Yes 
Yes5 
Yes5 
Yes 
Yes 
Yes 
Yes10 
Yes 
Yes 
Yes Call 
Waiting 
Yes^ 
Yes5 
Yes 
Yes5 
Yesy 
Yes 
Yes5 
Yes 
Yes 
No14 
Yes 
Yeslb 
Yes 
Yes 
Yes Call 
Forward 
Yes^ 
Yes5 
No0 
Yes5 
Yesa 
Yes 
Yes5 
Yes 
Yes 
Yes 
Yes 
YesitJ 
Yes 
Yes 
Yes Voice-mail 
in the public 
network 
Yes 
Yes5 
Yes 
No 
No 
Yes 
Yes5 
No1"1 
No 
No11 
Yes1° 
Yes,D 
Yes 
Yes 
No11 Calling Une 
Identification 
YesJ 
NoD 
Yes 
No 
No'" 
Yes 
No 
Yes** 
No 
No15 
YesJ 
Yes 
Yes 
Yes 
Yes Call Barring 
Facilities 
Yes« 
Yes' 
Yes 
No 
No 
Yes 
No 
Yes1^ 
Yes1J 
Yes 
Yes1' 
Yes'lu4 
Yesiy 
Yes 
Yes 
Source: National Regulatory Authorities (1995). 
NOTES 
1 For 93.5% of PSTN lines. 
2 For 60% of PSTN lines. 
3 Available on ISDN 
4 Call barring available to block access to kiosk services. 
5 Commercially availability linked to whether subscriber is connected to a digital exchange (percentage of subscribers for 
those States indicated in brackets) : DK (55%), EL (3%), IRL (75%) and Italy (67%) 
6 Gradual introduction from February 1996. 
7 Commercially available blocking access to specific value-added services; per line or per call barring of call facilities (such 
as call identification) will be introduced in December 1995. 
8 Technical possibility on ISDN but this is not commercially available for the moment. 
9 47.8% of the subscribers have the possibility to access this service. 
10 There is a plan to offer such a service in 1996 for subscribers connected to digital switches. 
11 Voice-mail was on trial in 1995. 
12 Call barring facilities for trunk traffic and kiosk billing services. 
13 Customers have the possibility of per line barring of call facilities. 
14 Pilot in 1995 and introduction in 1996. 
15 Pilot in 1995. 
16 Available for mobile telephone (GSM). 
17 Barring access available only to specific value-added services (not per line or call blocking facilities) 
18 Available whenever it is technically feasible and for CLI, available on ISDN whenever it is technically feasible. 
19 Customers are offered the possibility of per line barring of call facilities and barring access to specific value-added 
services. 
38 
Annex 2 : The Universal Telephone Service in the European Union Today 
V THE AFFORDABILITY OF TELECOMMUNICATIONS SERVICES IN THE EUROPEAN 
COMMUNITY TODAY 
As indicated in the Communication, for the majority of users, it is the overall 
affordabiiity of the telephone service which is important. It was also stressed in 
many of the comments received that users needed to be better informed about 
what they are spending and to be given more control over that expenditure. This 
is all the more important in an environment in which the general volume of 
telephone usage is increasing and in which there are an increasing number of 
new audiotex services, providing information or entertainment, often priced at a 
premium above the normal cost of universal service. 
Price levels within the Community are already quite varied. - Indications of these 
absolute levels are provided in Table A7. 
39 
Annex 2 : The Universal Telephone Service in the European Union Today 
Table A7 : Telephone Charges1 for Residenial Users in the EC Member 
States 
(by fourth quarter 1995) 
Installation Rental 
Charges2 Charges3 
(New (Bi-monthly) 
Connection) • 
B 90 23 
DK 212 27 
D 46 23 
GR 160 V\ 
ES 13^3 16 
F 39 12 
IRL 148 25 
\ 99 12 
L 64 V\ 
NL 93 22 
A 90 24 
P 77 19 
SF 169 20 
S 79 20 
UK(BT) 1J7 17 
UK (MCI)4 | 117 I 25 
B 
DK 
D 
GR 
E 
F 
IRL 
1 
L 
NL 
AU 
P 
SF 
S 
UK (BT) 
UK (MCI)7 3-minute Local Call 
Peak period 
0.10 
0.13 
0.11 
0.10 
0.07 
0.09 
0.12 
0.13 
0.08 
0.08 
0.15 
0.06 
0.12 
0.08 
0.12 
n/a Cheap period5 
0.03 
0.07 
0.04 
0.10 
0.07 
0.03 
0.02 
0.09 
0.04 
0.04 
0.15 
0.02 
0.12 
0.05 
0.05 
n/a 3-minute Trunk Call 
Peak period 
0.58 
0.29 
0.87 
0.98 
1.00 
0.81 
0.67 
0.92 
0.08 
0.25 
1.21 
1.17 
0.28 
0.24 
0.30 
0.23 Cheap period6 
0.23 
0.14 
0.40 
0.65 
0.42 
0.28 
0.46 
0.34 
0.04 
0.13 
0.90 
0.59 
0.17 
0.14 
0.18 
0.15 
Notes 
1. All charges in the tables are in ECU and include value added tax. 
2. Charges are minimum charges excluding time and material charges which are levied in some Member States. 
3. Rental charges reflect the price for a single line in the capital city. Germany includes free call minutes equal to ECU 2.42. 
4 Mercury rental charge comprises the BT rental plus the charge for the authorization code. 
5. The cheapest off-peak rates have been taken into consideration 
6. Refer to note 5. 
7. Mercury does not offer local calls for residential users. 
40 
Annex 2 : The Universal Telephone Service in the European Union Today 
Progress made in adjusting tariff structures with the Community and its 
impact on the overall affordabiiity of universal service 
1. Table A8 indicates the overall percentage change in the general level of the 
prices of telecommunications services in the Member States of the European 
Community between 1990 and 1995. (A detailed breakdown of the different 
elements within the overall change is provided in Table A8). The information 
set out is based on the data provided by national regulatory authorities and is 
calculated according to national practice. It is not therefore possible to 
compare price changes directly between different Member States, making it 
difficult to compare price changes in different parts of the Community. 
Additionally, Tables A7 and A8 show percentage changes and do not 
indicate the prices actually charged. It is not therefore possible to draw 
conclusions concerning the effects of these rises on the overall 
affordabiiity of the services concerned. 
Nevertheless, the data shows that important changes in tariff structures are 
underway and, in particular, the general trend of increases in fixed elements in 
the tariffs for universal service (connection and rental), as well as higher 
charges for local calls at peak hours and, in most Member States, 
corresponding reductions in regional, long-distance and international calls. 
2. information on the current availability of targeted or special tariff schemes is 
set out in Table A-9. 
41 
Annex 2 : The Universal Telephone Service in the European Union Today 
Table A8: Average Overall Tariff Adjustments - (NRA Estimates) 1990 -
1995 
Tariff changes indicated are change in real terms, with nominal changes, where available, shown in 
brackets 
Detailed data on the changes for installation / rental / local / regional / national and international 
tariffs are set out in Table A8 
I Overall % Change in tariffs (1990-1995) 
_________ ... . .... 
-_§ 
DK j-0_5 
n/a 
EL2 - 43.2 (-7.2 nominal change) 
J_* n/a 
F3 - 14 (- 3.4 nominal change) 
J rj/a 
JRL - 42 (- 25 nominal change) 
J_ n/a 
NL4 +3.7 (Mandatory services) 
+ 6.6(Small user tariff) 
AUT1 n/a 
J_ - 10.2 (+ 27.6 nominal change) 
FIN _5 
SWED5 , 8 (+ 8 nominal change) 
UK6 I -23.7 (-10.2 nominal change) 
n/a : Data not available. 
Notes on Table A8 Source: National Regulatory Authorities (1995) 
1. Data provided for changes in individual tariff elements, but no overall figure available. 
2. Average overall tariff change for call charges only 
3. Period 1990-1994 
4. Data provided indicates price change of an unspecified basket of services in relation to 
consumer price index. 
5. Calculated on the basis of Telia's index of its tariff basket. 
6. The global figures for the overall percentage change in BT's tariffs between 1990/91-
1994/95 and relates to an overall weighted average of all the services in the price 
control basket, not just the ones listed in the table. 
Information and control over what customers spend on 
telecommunications 
3. Above indications were given about the increasing availability of call-barring 
facilities for residential users which can offer a degree of control, by allowing 
them to block calls to selected services (e.g. premium priced services), or 
potentially to long-distance and /or international calling. 
4. Additionally, the Voice Telephony Directive requires from the end of 1996 
Member States to set targets for the availability of itemised telephone bills - a 
service which is in any event increasingly common throughout the EC. This is 
an important means of providing users with sufficient information over what 
they have spent on the telephone. At the same time, a number of comments 
stressed that current long-billing periods made it difficult for some users to 
42 
Annex 2 : The Universal Telephone Service in the European Union Today 
control expenditure and that therefore warning should be given of excessive or 
unusual use of a particular telephone connection. 
The use of special and targeted tariff schemes in the EC 
As part of a general aim of ensuring affordabiiity for telecommunications 
services, special and targeted tariff schemes are provided in all Member 
States (see Table A8 for full details) to improve the overall affordabiiity of 
universal service for certain users, or for certain groups of users with specific 
needs or specific calling patterns. Low user schemes are available in France, 
Ireland, Sweden and the United Kingdom. Such schemes are particularly 
important in the context of tariff rebalancing as it is generally those users who 
make few calls, or few long-distance and international calls, who may be 
disadvantaged by the price changes resulting from rebalancing. In addition, 
social schemes for those on low incomes are available in Belgium, 
Germany, France, and Austria. All Member States, with the exception of 
Luxembourg, the Netherlands and Finland, also offer some form of special 
tariff packages for elderly users and for users with disabilities. 
A number of organisations, particularly those representing the interests of 
users with disabilities, stressed in this context the need for such schemes to 
be available automatically to such users or, at least, that the administrative 
formalities connected with benefiting from such schemes should be reduced, 
(for example, to avoid the requirement to register separately for each scheme). 
43 
Annex 2 : The Universal Telephone Service in the European Union Today 
Table A9 : Tariff Changes within the EC between 1990 and 1995 
Generally real % change is indicated (nominal change in brackets) : * indicates that figure is real change where no nominal figure is given 
Bl 
DK 
D3 
EL^ 
£5 
F6 
1 
IRL 
L*1 Overall Change 
n/a 
+0.5% 
n/a 
-43.2% 
(-7.2 in nominal 
terms) 
n/a 
-14% 
(- 3.4% nominal 
change) 
n/a 
-42% 
(-25% nominal 
change) 
n/a Installation 
Connection/ set 
up 
+ 39% 
Existing line - 37% 
+ 8.3% 
-15.4%* 
+ 105.2%* 
+ 2.38% 
+ 30%7 
(+16%) 
n/a 
No change 
No change Rental 
+ 35% large areas 
+50% med. areas 
+ 70% small areas 
+ 3.5% 
-15.4%* 
+ 68.1%* 
+ 24.2% 
Residential: + 42% 
Bus: No change 
No change 
No change Local 
+ 7.6% 
+ 8.5% 
-15.4%* 
+ 89.1%* 
+ 192.3% 
+ 25% 
(+11.5%) 
Peak : + 41% 
Bus: +12% 
+10% 
See national Regional 
+5.8% 
(interzonal 
traffic conti­
guous zones) 
No change 
n/a 
- 23.5% 
- 29.5%8 
(-37%) 
See national National 
-5.8% 
(interzonal traffic 
non-contiguous 
zones) 
- 20.6% 
- 55.4%* 
(>100km) 
+ 68.6%* 
+ 10.6% 
-19% (> 100km) 
(-27.5%) 
Peak: -11% 
Business - 6% 
-4.61» 
Peak : -6% 
Other: -13.4% international 
Examples: 
France -22.2%; 
Italy - 33.3%; 
Spain - 28.6%; 
USA - 40%; 
Japan - 55%; 
-5%2 
Examples: 
USA - 68.9%* 
Norway - 33.9%* 
-1.6%* 
Examples 
EC Calls - 23% 
USA -61% 
-18.7% 
(-27.5%)9 
Examples: 
UK Peak -20%; 
Cheap - 20% 
USA Peak-43% 
Cheap - 48% 
UK: - 4.7% 
Other: - 4.7% 
1995 -13 to 50% 
44 
Annex 2 : The Universal Telephone Service in the European Union Today 
NL<* 
AUT 
P 
FIN 
SWE1B 
UK18 Overall Change 
Mandatory services 
+ 3.7%* Small user 
tariff 
+ 6.6%* 
n/a 
-10.2% 
(+27.6% nominal 
change) 
-5%™ 
-8% 
(+8% nominal 
change) 
-23.7% 
(-10.2% nominal 
change)19 Installation 
No change 
+33% 
- 0.6% 
(+41.2% nominal 
change) 
n/a 
n/a 
Residential: -0.7% 
Business: -33.1% Rental * 
16.7% 
No change 
- 5.9% 
(+33.7% nominal change) 
n/a 
+ 15to20%17 
Resid'l exclusive: +37.5% 
Bus. exclusive: +37.7 
Wholesale: +54.4% Local 
Av: + 22% 
Peak +26% 
Cheap +18% 
No change 
+11.9% 
(+58.9% nominal 
change) 
+14.2%14 
+ 2.4 (%)* 
+ 60%17 
-13% Regional 
Av: + 22% 
Peak: + 26% 
Chp: +18% 
-40% 
+ 27.1%-
(+80.6% 
nominal 
change) 
n/a 
-19.8% National 
-11% 
-13.7% 
(+22.6% nominal 
change) 
Peak:-61.2% 
n/a 
B1-rate:-19.5% 
B-rate: -35.5% International 
-21.3% 
n/a 
Europe: - 32.2% 
(-3.6% nominal change) 
Other:-44.5% 
(-21.2% nominal 
change) 
Examples11): 
Sweden - 47.4% 
Germany -19.2% 
USA -16.8% 
n/a 
-22.3% 
n/a Source: National Regulatory Authorities (1995) 
Data showing % changes in specific tariff from 1990-1995 not provided by the NRA. 
Notes on Table 
1. Belgacom is paying back the guarantee previously required from customers. 
2. Period : 1994-1995. Since July 1995. calls from Denmark to other EC countries, Norway and Switzerland have been reduced by 20% (off peak). A similar 20% 
reduction to USA and Canada occurred in January 1995. 
3. Period 1990-1994. Inflation indicator for the period indicated an increase in prices of + 15.4% 
4. Average overall tariff change for call charges only 
5. Tariff changes refer to 1994 only 
6. Period 1990-1994 
7. Percentage change represents both connection and rental charge 
8. Decrease attributable to creation of enlarged local calling areas 
9. Data provided for a range of tariffs varying from intra-EC /cross-border -19% (-27.5%) to North American routes - 32% (- 29%) 
45 
Annex 2 : The Universal Telephone Service in the European Union Today 
10. Includes calls to Northern Ireland 
11. Since 1 July 1993 the duration of one tariff unit has been 4 minutes (peak rate) and 8 minutes (off peak). Since 1 May 1995 a monthly minimum of 20 units is 
charged per subscriber line. 
12. Data provided indicates price change of an unspecified basket of services in relation to consumer price index. 
13. The global figure has been calculated for residential users who mainly use local telephone services. The figure would be different for business users because 
they use more long distance and international telecommunications and in these services the prices have dropped considerably. 
14. Data provided indicates price change of a specified basket of local services in relation to consumer price index. The basket consists in 8% of connection fee; 
annual subscription fee and 750 local daytime 4 minute telephone calls. 
15. Cheapest rate and cheapest operator (1990) Telecom Finland and (1995) Telivo. 
16. Period 1993-1995. 
17. Calculated on the basis of Telia's index of its tariff basket. 
18. Price changes are for BT. 
19. The global figures for the overall percentage change in BT's tariffs between 1990/91-1994/95 and relates to an overall weighted average of all the services in 
the price control basket, not just the ones listed in the table. 
46 
Annex 2 : The Universal Telephone Service in the European Union Today 
Table A10 - Special tariff schemes for targeted user groups in the EC 
Country Description of scheme 
BE The contract between the Belgian State and Belgacom imposes certain tariff reductions for social or humanitarian reasons. 
0 social groups: Around 370.000 people are benefiting from the social telephone rate (8.1% of the total number of connections). The following tariff 
reductions are applied: 70% reduction of connection charges, 50% reduction of rental fee, and 50 free units of traffic for 2 months. 
ii) Elderly and handicapped: Reduced tariffs for elderly (over 65) and handicapped. 
DK Specific text-telephone service under operation for hearing impaired users, including provision of different types of terminal equipment. The 
service is provided on a non-commercial basis. 
Reduced tariffs for visually impaired and blind users when using Directory Services. 
Reduced tariff scheme for elderly, disabled, and low income croups. These special groups receive a 5 DM reduction on rental charges and 30 units 
free of charge per month. There will be a tariff re-balancing in 1996 which will make larger discounts. 
There is no low usage tariff scheme and there is none foreseen. 
EL i) Disabled: Special reduced rates have been introduced for blind subscribers. Blind subscribers are allowed 150 units a month free of charge on 
the first main telephone line subscribed in their name. Additionally, specially designed public card phones have been installed at airports, railway 
and bus stations and hospitals. 
There is no special policy on low user schemes within the context of universal service. 
ft Elderly and handicapped: Special "social subscription" that consists of a 95% discount on the monthly fee and a 70% discount on the initial 
connection fee for those citizens over 64 and handicapped (only when they do not receive a certain level of income). 
i) Handicapped, elderly and social groups: Reduced tariffs for special and social groups, such as handicapped, aged over 65 living alone or with 
their partner and war veterans. These reductions include a 50% reduction on subscription fee, 40 units free of charge per month (domestic calls), 
and free access to information services. 
ii) The low user scheme gives a reduction for those who use less than 26 units per month. 
47 
Annex 2 : The Universal Telephone Service in the European Union Today 
Country 
IRL Description of scheme 
Free rental and subsidised usage scheme provided to specific user groups such as the deaf, the aged and the disabled. 
i) Disabled: The deaf customers can use special text terminals (Minicom) to communicate with non-deaf customers. Due to the fact that this 
method is slower than normal speech, the operator has a refund scheme under which deaf customers are entitled to reclaim up to 70% of the cost 
of their calls subject to an annual maximum. Additionally, the State may refund the VAT element of the purchase price of the Minicom equipment 
for the deaf. 
ii) The company also provides financial assistance to other voluntary charitable groups, such as Samaritans, Irish Cancer Society, Rape Crisis 
Centre, etc. which allows the organisation to be contacted by users of their services either by freephone or at a reduced rate. 
iii) Low user scheme: there is a low user scheme on its analogue mobile service which provides service with connection charges as little as 41% of 
normal charges, rental charges as little over 103% of normal charges but which includes a credit per month on national calls. 
iv) Aged and disabled: The Department of Social Welfare provides state aid for the aged and disabled, i.e., free telephone rental for certain aged 
and disabled people living alone or with other excepted persons. ___________ 
Since January 1995, there is a special scheme for low consumption users upon request (it includes a low rental fee and low tariffs for low 
consumption per month, i.e., up to 40 units/month: 50 lira). 
P&T Luxembourg has no plans to introduce specific schemes targeted towards particular social groups as the basic telephone tariffs are very low. 
NL There is no special scheme targeted to a specific group of customers. 
AUT Certain social groups, including the blind, handicapped, pensioners, low income people, students, are exempted from paying the following fees: 
basic monthly connection fee and one free hour of telephone use per month. 
There are special tariff reductions for retirees and pensioners with a monthly salary less than the national minimum. The reductions are the 
following: a 60% reduction of subscription fees and at least 25 units free of charge per month. 
The operators are equally obliged to concede the following facilities for population with special needs: micro telephones with amplifier, a call 
warning, etc. ^_^ 
FIN There are no special schemes regarding telecommunications charges. The state budget finances special services targeted to some special groups, 
which operators are not willing to provide (i.e. special services for disabled). 
SWED There is an agreement between the State and Telia, where the latter has committed itself to provide the low consumption subscription (Telia Mini). 
The quarterly fee must not exceed 70% of the regular quarterly fee and at least 10% of household customers should benefit from to this type of 
subscription. 
43 
Annex 2 : The Universal Telephone Service in the European Union Today 
UK ; BT provides the following schemes: 
\ Spread connection fee - which divides the initial connection charge into 5 quarterly payments (plus an administration charge) 
Deposits - in 1996 BT plans to introduce Usage Limits, whereby new customers agree a financial ceiling on call expenditure. This should largely 
eliminate the need for deposits. 
Low User Scheme - BT provides this under its licence, the guidelines for which are negotiated with the regulator. 
Elderly gnd Disabled - new customers over 65 will not be asked for a deposit unless they owe BT money or are bankrupt (Kingston has a similar 
policy) 
Protected Service Scheme - enabling elderly and disabled customers to nominate a third party to deal with bill payment. 
Free Priority Fault Repair Service - for customers whose telephones are vital lifeline - scheme is designed to ensure priority treatment in the event 
of a fauit. 
Visually impaired and blind customers - are offered large print/Braillertalking" bills and free Directory Enquiries (all companies offer the latter in 
order to meet a licence requirement). Free Directory Enquiries is offered to visually impaired customers and others who are physically unable to 
use the printed phone book. 
Deaf users - have access to Type talk, a national telephone relay service, which BT is obliged under its licence to provide and fund. A Text User's 
Rebate is available to acknowledge that calls made on by text phones take longer than the voice telephony equivalent. Some cable companies 
>ffer disabled customers personal visits to collect their bill payments. 
Source: National Regulatory Authorities (1995) 
Annex 2 : Questionnaire 
QUESTIONNAIRE SENT TO MEMBER STATES 
I - THE CURRENT SITUATION WITH RESPECT TO UNIVERSAL SERVICE. 
Questions concerning the general level of telephone penetration. 
1. What was the total number of business telephone lines and residential telephone 
lines at the end of 1990 and at the end of 1994? Please give more recent figures 
if they are available? 
2. What was the ratio of residential lines to number of households at the end of 1990 
and at the end of 1994? 
3. What was the total number of public payphones at the end of 1990 and at the end 
of 1994? 
4. What was the total number of mobile cellular telephone subscribers at the end of 
1990 and at the end of 1994? Please give more recent figures if they are 
available 
Question concerning basic aspects of service quality 
5. Please give details of the main indicators of telephone service quality that are 
currently published. Please give details where they are available for supply time 
for network connection, fault repair times and compensation schemes and 
proportion of public payphones in working order. 
Question concerning the basic telephone service features that are offered. 
6. Please give details of the main service features that are offered by the fixed 
telephone service operators ? Please indicate whether any of the following 
service features are commercially available or the date planned for their 
introduction : DTMF dialling, call intenrupt/waiting, call forwarding or call transfer, 
voice-mail, calling-line identification. Please also specify whether customers are 
offered the possibility of per line or per call blocking of call facilities, (such as 
calling identification), or the possibility of blocking access to specific value-added 
services (such as premium-rate or "kiosk" services)? 
50 
Annex 2 : Questionnaire 
II - THE ADJUSTMENT OF PRICING STRUCTURES, AFFORDABILITY AND SPECIAL MEASURES. 
In most Member States, tariffs structures are changing in line with the process of 
rebalancing to reflect modern cost structures, competitive pressures and to encourage 
more efficient use of telecommunications networks. 
Questions concerning major pricing adjustments, whether there is a measure of decline 
in prices overall, if price-cap schemes are being used to control pricing adjustment, the 
affordabiiity of telephone service and whether special tariff schemes are available. 
1. What are the major tariff reforms that have been undertaken or are being 
planned? 
2. Is it possible to give a measure of the average change in tariff levels since 1990? 
(Please specify in relation to connection charges, rental/fixed charges, local, long­
distance and international call charges) 
3. What are the particular target levels, if any, for the adjustment of tariff structures? 
4. What price-cap schemes, if any, in operation? What are the plans, if any, to 
introduce price-cap schemes or modify existing schemes? 
5. Please give the latest information concerning specific schemes (either voluntary or 
as a result of regulation) which are being used or planned in order to provide 
service to a specific group of customers. This includes schemes targeted towards 
particular social purposes (schemes for customers with disabilities / the elderly/ 
those on low incomes, etc.), schemes to offset the adverse impact on certain 
customers of re-balanced tariffs? Additionally, what low user schemes (either 
voluntary or as a result of regulation) are available or being planned? 
51 
Annex 3 : List of participants 
ANNEX 3 : LIST OF ORGANISATIONS PROVIDING WRITTEN RESPONSES TO THE 
THEME PAPER ON UNIVERSAL SERVICE 
ANGA 
Antelope Consulting 
APEC - Association of Private European Cable Operators 
ARD - Radio + TV 
ASIMILEC 
AT&T 
ATC Finland 
Austrian Ministry of economy and transport 
Belgacom 
BellSouth 
British Telecom 
Bureau Européen des Unions des Consumateurs 
Conseil National du Patronat Français 
Compagnie General des Eaux 
COST 219 - National Research & Development Centre for Welfare & Health 
COST 219 The Mike Martin Consultancy 
CRID 
CURDS - University of Newcastle 
Dansk Industri (Dl) 
Department of Trade and Industry (UK) 
Deutsche Postgewerkschaft 
Deutsche Telekom 
Direction Générale des Postes et Télécommunications (FR) 
ETNO 
EU Committee of the American chamber of Commerce in Belgium 
European Conference of Data Protection Commissioners 
Forschungsinstitut fur anwendungsorientierte Wissensverarbeitung 
France Telecom 
Fundesco 
GEF - Global Electronic Finance Management 
INESC 
Ingeneria y Gestion de Redes 
INTEL 
International Council of Aircraft Owner and Pilot Associations 
IPTT 
Kooperativa Institutet 
Erika Mann M.E.P. 
Mercury Communications Ltd 
MFS Communications 
Ministerie Van Verkeer en Waterstaat (NL) 
Ministry of Transport & Communications (FIN) 
Ministry of Transport & Communications (SWED) 
Omnitel Pronto Italia 
Portugal Telecom 
PTT Force Ouvrière 
PTT Telecom 
STET 
TAG - Telecommunications Action Group 
52 
Annex 3 : List of participants 
TELECEL S.A. 
Telecom Eireann 
Telefonica de Espana 
Telenor 
TELIA AB 
The Finnish Consumers Association 
Thyssen Telecom A.G. 
The Telecommunications Managers Association 
United States Council for International Business 
Universidad de Valencia 
Universitât Potsdam 
VEBACOM 
v 
53 
Annex 4 : Summary of the main issues raised in the public consultation on the universal service theme paper 
ANNEX 4: SUMMARY OF THE MAIN ISSUES RAISED IN THE PUBLIC 
CONSULTATION ON THE UNIVERSAL SERVICE THEME PAPER 
A broad range of comments where made during the public consultation. It is 
appropriate to highlight five main issues raised: 
1. Scope of the universal telephone service 
There is recognition of a continuing improvement in the level and quality of service 
within the European Community. Few comments favoured a radical reshaping of 
the current concept of the universal telephone service, which should remain 
narrowly defined, but open to future evolution in the light of changes in customer 
and market demand. Nevertheless, some organisations, particularly, user 
organisations and operators from the less favoured regions suggested that the 
current concept of universal service could be more ambitious and should include 
both leased lines and ISDN. 
At the same time, there was support for measures at a European level to 
strengthen the current concept in order to overcome important gaps at present 
with regard to the scope of services within the universal telephone service and the 
need for an explicit obligation of affordabiiity. Emphasis was placed on ensuring 
users had adequate information and control over what they spend (e.g. itemised 
billing, flexible ways of paying, such as spreading connection charges over a 
series of installments or allowing users to block calls to particular numbers). 
2. Quality of service and comparability of service at a European level 
A particular concern resulting from the consultation was on the considerable 
variation in the quality of service targets currently established at a national level, 
as well as national enforcement of targets and the availability and nature of 
compensation schemes where targets were not met. This concern from users was 
compounded by the difficulties faced by some national regulatory authorities in 
obtaining basic indicators of the universal telephone service, such as the number 
of households with a telephone, and by the lack of comparability of certain of data 
between Member States. 
The situation is partly remedied by the Voice Telephony Directive, which provides 
for the setting and publication of national quality of service indicators. However, 
the consultation indicates that users seek more than this and that varying levels of 
service in the Member States impacts the provision of pan-European networks 
and services and, if not corrected could lead to widening the gap between the 
Community's developed areas and its less favoured regions, undemining the 
objective of economic and social cohesion. 
A further concern raised by consumer organisations was also whether adequate 
sanctions exist at a national level to allow quality of service to be enforced. 
More generally such organisations raised the issue of consumer involvement at 
both a national and European level in the setting of quality of service targets and 
measures of affordabiiity, and more generally, in decisions as to the future 
evolution of universal telephone service and of the information society. 
54 
Annex 4 :Summary of the main issues raised in the public consultation on the universal service theme paper 
3. Costing and funding of the universal telephone service 
The most recent consultation exercise did not invite detailed comment on the 
costing and funding of the universal telephone given their detailed discussion in 
the context of the infrastructure Green Paper (see COM(95) 158). These 
principles are reflected in the proposed Interconnection Directive and the Full 
Competition Directive. 
Nevertheless, where comments were made they tended to address practical 
issues associated with costing (for example, the calculation of the value to existing 
operators providing the universal telephone service) or with funding (the 
requirements of a universal service fund, the feasibility of "pay or play" 
mechanisms). Additional guidance on these practical issues at a European level 
was felt to be useful, even though the main regulatory principles were found in the 
proposed legislation. 
4. Tariff rebalancing 
There was general support for the process of tariff rebalancing to which the 
European Community is committed, with many of those comments stressing the 
need for completion of the process by the date set for full liberalisation. Many 
pointed to the benefits which overall lower tariffs would offer many users. 
At the same time, there was recognition of the need to protect particular groups of 
users from the effects of unconstrained rebalancing in order to ensure that 
customers are not forced to leave the network because of the costs involved. 
Consumer organisations stressed in this context the role to be played both by 
price cap mechanisms and specially targeted tariff schemes. 
5. Public access to the information society 
The fundamental importance of the information society was widely recognised, but 
the emerging services were not considered part of the universal telephone service 
today. At the same time, the idea of market-led "public access" (to connect 
schools, hospitals, libraries, etc.) was supported, though it was not considered 
necessary to define precise targets at this stage. 
At the same time, there was recognition of the need to put in place appropriate 
mechanisms to monitor the demand for, and take up of, new services at both a 
national and European level in order to keep the scope of the universal telephone 
service under review, and in particular to measure the extent to which "public 
access" was being developed, particularly in the less favoured regions in the 
Union. 
Stress was also placed by consumer organisations of the importance of their voice 
being heard in this monitoring process. 
ENDNOTES 
1 In Sweden, for example, new subscriptions to mobile services have for the first time exceeded subscriptions to the fixed network 
2 In Spain, for example, more than 180,000 subscribers benefit from wireless local loop services and there are more than 700 
wireless public call boxes. 
3 Proposal for a European Parliament and Council Decision on an action at a Union level in the field of satellite personal 
communications services in the European Union, COM(95) 529, 8.11.95 
4 VSATs - Very Small Aperture Satellite Terminals. 
5 Article 5 and Annex III 
6 Sec "Performance Indicators for Public Telecommunications Operators", Information Computer and Communications Policy 
series, No. 22, OECD, Paris 1990 and ETS1 Technical Report "Quality of service indicators lor Open Network Provision (ONP) 
of voice telephony and Integrated Services Digital Network (ISDN)" ETR 138, July 1994 
55 

ISSN 0254-1475 
COM(96) 73 final 
DOCUMENTS 
EN 15 08 10 
Catalogue number : CB-CO-96-118-EN-C 
ISBN 92-78-01688-8 
Office for Official Publications of the European Communities 
L-2985 Luxembourg