Opinion on the abolition of the restrictions on the use of cable television networks for the provision of telecommunications services () (96/C 100/14)

At its meeting on 13 March 1995, the Bureau of the Committee of the Regions instructed Subcommission 3 to draw up an Opinion on the above-mentioned subject.

In order to comply with the deadline requested by Commissioner Karel van Miert, Subcommission 3, on application of Rule 9(3) of the Rules of Procedure, unanimously adopted the draft Opinion on 22 May 1995 (Rapporteur: Mr Koivisto).

At its 8th Plenary Session on 19 July 1995, the Committee of the Regions adopted, without debate, the following Opinion.

1. Background

Speaking at the February G7 meeting, Commissioner Karel van Miert described competition as the linchpin of development in the information society; the objective of open and competitive markets has also won virtually unanimous support. According to Mr van Miert, a greater challenge is the timetable for liberalization and the creation of a regulatory framework such that the transition takes place smoothly, ensuring true and fair competition and the preservation of non-commercial values.

Competition between telecommunications services and data communication services has also been identified in several reports as an important factor in the emergence of new products and thereby new jobs.

As regards free competition, one of the most significant decisions of recent times has been the political agreement that, apart from certain exceptions, restrictions in all Member States on the provision and distribution of telecommunications services will be lifted by 1998.

The next few years are expected to see a major breakthrough in multimedia applications, which has already been prefigured in part by the rapid growth in the popularity of the Internet. Services such as interactive television and video on demand are also part of this same development process.

On the whole networks dedicated to one particular service are on the decrease. An indication of this is, for example, the transmission of TV pictures and speech on Internet and ATM-type networks.

Existing cable television networks are one of the most important links between homes and the new multimedia services. For this reason the Commission has prepared a draft Directive on the abolition, from 1996, of restrictions on the use of cable television networks as a basis for discussion.

2. Draft Directive regarding the abolition of the restrictions on the use of cable television networks for the provision of telecommunications services

According to the draft Commission Directive, the various regulatory restrictions in force in the Member States on the use of cable television networks for other telecommunications services should be lifted amongst other things because:

- the regulatory restrictions specifically concerning cable television networks prevent the use of alternative infrastructure for the provision of new telecommunications services;

- in several Member States, service providers can use only transmission capacity provided by telecommunications organizations, even though the telecommunications organizations themselves also offer the same services;

- according to Commission studies, opening networks would give rise to new services combining image and telecommunications;

- the different rules in force within the EU not only stand in the way of joint action for development, they also limit the freedom to provide new services to or from other Member States;

- according to the Commission, the restrictions on cable television networks exist primarily to protect the telecommunications organizations' main source of revenues, which is public voice telephony;

- the restrictions are a breach of more than one Treaty article;

- the implementation of EU measures relating to the information society depends on decreasing infrastructure costs. The present particularly high level of costs compared with e.g. North America is a direct consequence of the restrictions imposed by Member States on the use of infrastructures other than those of the telecommunications organizations for the provision of telecommunications services;

- because of the restrictions, cable TV operators are not willing to risk investing in e.g. optical fibre, thus holding back the development of important new services.

Under the Directive 90/388/EEC on competition in the markets for telecommunications services, telecommunications services other than voice telephony to the general public, the telex service, mobile communications, and radio and television broadcasting to the public have already been opened to competition. The present draft amends this Directive to encompass cable TV networks as well. Satellite communications have already been included in the scope of the Directive at an earlier stage.

3. Cable television networks in EU Member States

3.1. Cable television network penetration

Cable TV network penetration varies considerably from one Member State to another. According to the Green Paper on competition in data communications, Part II, published by the Commission on 25 January, cable television does not exist at all in two Member States, Greece and Italy, and development of cable is just beginning in Spain and Portugal. In other countries the proportion of households connected to cable TV varies from more than 90 % in Belgium, the Netherlands and Luxembourg to around 5 % in France and the UK. In terms of subscribers Germany represents the biggest national market with nearly 15 million households (around 50 % of the total number of subscribers in the EU) and a penetration rate of 45 %.

Among the Member States, the highest numbers of separate cable TV network operators are found in Denmark, the Netherlands, Luxembourg, Belgium, Spain and the United Kingdom. Germany and Portugal rely on the services of a single operator.

3.2. Cable TV networks and licensing regulations

At the present time, only the UK, Finland and Sweden legally permit cable TV companies to offer all data communication services on their networks.

In France use of cable TV networks for the provision of services other than voice telephony is permitted, but take-up has been limited; one of the reasons is the limited geographic coverage of cable TV networks.

In the Netherlands, cable TV operators representing a majority of the market are in the process of setting up a consortium with certain other organizations which is intended to form the basis of a second national telecommunications operator.

4. Recommendations concerning the draft Directive

4.1. The content of the draft Directive

With reference also to calls made by the European Parliament in 1993, the Committee of the Regions feels that measures put forward in the draft Directive are justified and support the EU's development policy to promote the information society. So-called alternative infrastructure must be treated in the same way as traditional data communications network, and as such it must also be made to serve the same objectives relating to the development of the information society.

At least at this stage, there is good reason to require that cable television operators keep separate accounts in respect of their function as network capacity providers.

The Committee of the Regions feels that the broadening of Directive 90/388/EEC to include cable television networks could be put into effect on the basis of the present draft.

The Committee would underline the fact that the inclusion of cable television networks within the scope of Directive 90/388/EEC must be without prejudice to the media regulations of the Member States (radio, television, questions of content).

4.2. Other points relevant to the draft Directive

Media concentrations

It is already clearly noticeable how, by forming various strategic concentrations, companies have been preparing for the provision of services in the coming information society and for the abolition of the restrictions on competition in telecommunications services. On the positive side, these concentrations provide worldwide services at reasonable prices, but an alliance of large data communications and communications companies in particular can have detrimental effects on the content of services introducing an element of bias.

The COR therefore calls for continued vigilance with regard to enforcement of EU competition rules.

The content of new services

In the light of experience gained during the development of voice telephony services, it is clear that the new telecommunications services developing on cable TV networks will mainly be for entertainment. The Committee of the Regions feels it is important to use and channel the resources of the 4th research and technological development framework programme in particular, as well as other resources at the Union's disposal, to guarantee the development of services in the non-commercial sector as well.

The Committee of the Regions attaches particular importance to the idea of developing blueprints - in collaboration with local and regional authorities - for telematic systems which underpin local democracy, citizens' self-government and their ability to take an independent stance on issues affecting society. These systems should be developed with a view to being used to advantage by the whole population.

Legal questions

The expansion of multimedia services makes it essential to waste no time in tackling as yet unresolved problems, especially with regard to copyright and data protection.

5. The regional policy impact of the draft Directive

Because of the differences between present cable TV network infrastructures, the regional policy impact of the draft Directive will vary from one Member State to another. In Belgium, Luxembourg and the Netherlands, where networks cover the whole country, the abolition of restrictions is not expected to have any direct impact, for example in terms of increasing regional disparities.

In most Member States cable TV networks mainly cover the most densely populated areas where, generally speaking, the provision of other datacommunications services is also at its highest level. For instance, in Finland the geographic coverage of cable TV networks is not expected to increase very substantially over the next few years.

Although by abolishing restrictions on alternative infrastructures the Commission is seeking to create new services and generally to expand development in the direction of the information society, in most countries the measures will probably not have a directly and immediately noticeable effect in terms of reducing regional differences in the provision of telecommunications services.

At regional and local level, the increase in possible uses for cable TV networks may open up a whole range of possibilities for multi-faceted interaction with ordinary citizens. If nothing else, the dissemination of information by municipal and provincial bodies may be considerably enhanced.

Done at Brussels, 19 July 1995.

The Chairman of the Committee of the Regions

Jacques BLANC

() OJ No C 76, 23. 3. 1995, p. 8.