COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 03.05.1995 
COM(95) 158 final 
COMMUNICATION FROM THE COMMISSION 
TO THE COUNCIL AND THE EUROPEAN PARLIAMENT 
THE CONSULTATION ON THE GREEN PAPER 
ON 
THE LIBERALISATION OF 
TELECOMMUNICATIONS INFRASTRUCTURE 
AND CABLE TELEVISION NETWORKS 
SUMMARY 
THE INFORMATION SOCIETY: A POLITICAL CONTEXT FOR TELECOMMUNICATIONS POLICY 
The future development of Europe's telecommunications infrastructure is at the 
forefront of the debate on the Information Society, launched by the Bangemann 
Group Report on "Europe and the global information socjety"1, and in the 
Commission's Action Plan on Europe's way to the Information Society2. More 
recently this has been the focus of the discussions in February 1995 at the G7 
Summit in Brussels. At that meeting the definition of an adaptable regulatory 
framework was recognised as one of the 8 principles for the realisation of the 
Global Information Society. 
The Conclusions of the G7 Summit noted in that respect that: "the regulatory 
framework should put the user first and meet a variety of complementary societal 
objectives. It must be designed to allow choice, high quality services and 
affordable prices. It will therefore have to be based on an environment that 
encourages dynamic competition, ensures the separation of operating and 
regulatory functions as well as promotes interconnectivity and interoperability'. 
The Consultation which has just concluded on Parts I and II of the Green Paper on 
the liberalisation of telecommunications infrastructure and cable television 
networks has made a key contribution to the creation of such a regulatory 
framework in Europe. In proposing a timetable for liberalisation, the Green Paper 
has opened the door to further public and private investment in the kind of 
telecommunications infrastructure which the Information Society requires, and in 
setting out a clear and coherent regulatory framework it has identified the means 
to ensure the rapid development of greater choice, innovation and higher quality 
of service for every user. 
Now on the basis of the consensus established through the consultation, it is 
possible to move forward at a national, Union and global level. The approach 
- which has been confirmed goes beyond the key regulatory challenges of universal 
service, interconnection, licensing, fair competition and a consistent approach to 
the international dimension of the new environment. It extends to creating the 
conditions in which every citizen can access and draw benefits from the new 
services which the Information Society will offer in fields as diverse as health care, 
education and training and entertainment. 
The approach must also encompass the transformation in employment brought 
about by the Information Society - both in terms of changes in patterns of 
employment within the traditional operators in the telecommunications sector and 
in terms of the wider impact on employment and the organisation of work within 
the Information Society. In these wider areas, the Report sets out the comments 
expressed in the consultation and highlights the on-going work in the Union as 
part of the follow up to the G7 Summit last February. At the same time, the 
detailed action to meet these challenges, particularly, the challenge of 
employment falls outside the scope of the regulatory framework and as the Report 
acknowledges must be the subject of specific on-going initiatives at a Union-level, 
as well as further discussion in the new Information Society Forum and in the High 
1 Europe and the global information society, Recommendations to the European Council, 26 May 1994 
2 Communication on Europe's Way to the Information Society. An Action Plan, COM(94) 347 final, 17.7.94 
Level Group of Social Experts set up to consider issues linked to employment in 
the Information Society. 
THE ECONOMIC POTENTIAL OF THE TELECOMS SECTOR 
An unprecedented growth and transformation of the telecommunications and 
information sectors is occurring. The telecommunications sector in the European 
Union is worth over 140 billion ecu (over 3% of GDP) and growing strongly. The 
nominal growth rate over the last five years has averaged about 7% annually. As 
an indicator of direct telecommunications usage and growth, international and 
cross-border public telephone traffic in the Union rose by just over 10% in 1993 
compared to volume increases of about 11 % in 1991/1992. 
At the same time technological changes mean that new telecommunications 
services are developing, in particular in the areas of mobile and satellite 
communications but also in digital communications where new services based on 
various combinations of voice, data and image are becoming possible. The 
increased use of personal computers and other devices attached to 
telecommunications networks is reinforcing this trend. 
The prospect of the rapid growth and spread of the information society is, 
therefore, a very real one with telecommunications infrastructure and networks 
providing the base on which a wide range of communications can flow. 
It is against this background that the Commission adopted the two parts of its 
Green Paper on the liberalisation of telecommunications infrastructure and cable 
TV networks3, (the Green Paper). 
?H£ MAÎN ÎSSUIS A$0*ES$£C> ÏM THE OfcËEK PAPÊfc 
* How can universal service fce developed? How much does it cost and who 
should pay for It? 
* What should be the future framework for interconnection; and interoperability? 
* Now will télécoms networks be licensed? What restrictions can legitimately be 
placed on licence numbers and what conditions can be attached to licences? 
* How can a fair competitive environment be ensured? 
* How can Infrastructure competition contribute to the challenge of employment? 
How should Europe ^àûres^ the shift In employment in telecommunications? 
* How can Europe ensure comparable and effective access to global markets? 
m What are the broader societal effects of the Information Society and how can 
the regulatory framework address these ? 
Green Paper on the liberalisation of telecommunications infrastructure and cable TV networks - Part I : Principle 
and Timetable, (COM(94)440 final, 25.10.94) and Green Paper on the liberalisation of telecommunications 
infrastructure and cable TV networks - Part II : A common approach to the provision of infrastructure in the 
European Union (COM(94)682 final, 25.1.95). 
THE CONSULTATION ON THE GREEN PAPER AND SUMMARY OF THE RESULTS 
The public consultation period was initiated with the adoption of Part I of the 
Green Paper in October 1994 and continued until March 1995. The Commission 
received more than 100 written comments from European and national 
organisations and associations/companies and individuals active mainly in the 
telecommunications, but also in broadcasting and related sectors; trade unions; 
user and consumer organisations; and from the European Data Protection 
Commissioners. 
In addition, a series of consultation meetings which were held in February and 
March substantially contributed to the work of the Commission. These hearings 
involved a Round Table for the Chairmen of Europe's network operators (fixed, 
mobile and licensed alternative infrastructure providers ); a general two day 
hearing involving more than 125 organisations, companies and associations, a 
meeting with the a delegation representing European Trade Unions in the 
communications sector. The opinion of the Joint Telecommunications 
Committee was also given. 
The Commission also worked closely with the High Level Committee of National 
Regulatory Authorities, in line with Council Resolution 94/C379/034. 
Responses to the issues raised in the Green Paper were provided during the 
consultation and form the basis of the Commission's proposals for action set out in this 
Communication. Those proposals reflect both the areas of consensus and the general 
trends where different views were expressed which are set out in the table below: 
SUMMARY OF THE AREAS OF CONSENSUS 
• General support for the full liberalisation of telecommunications infrastructure for the 
provision of voice telephony services by 1 January 1998, subject to possible 
transitional arrangements. 
• Agreement on the need for an appropriate, transparent and effective regulatory 
framework to allow effective competition, particularly in the areas of universal service, 
interconnection and licensing. 
Recognition of the need for a common approach in defining the scope of universal 
service and in identifying its cost. ~' • 
Widespread support for an effective interconnection framework, based on commercial 
negotiation, but supported by a common regulatory framework at a European level and 
effective arbitration mechanisms to resolve disputes. 
General support for a common regulatory framework at a European level for licensing 
or granting authorisations within the European Union, based on the principles of 
transparency, non-discrimination and proportionality 
Council Resolution 94/C379/03 of 22 December 1994 on the principle and timetable for the liberalisation of 
telecommunications infrastructures, OJ C379, 31.12.94 
• General recognition that the competition rules will play an increasingly important role in 
the development of the sector. 
• Strong agreement on the heed for the European Union to seek comparable and 
effective access to third country markets both for operators and the equipment sector. 
• General recognition of the need for further action and assistance in relation to changes 
in employment in a liberalised telecommunications sector, in education and training 
needs, and in the evolution of the working environment. 
• General recognition that technological change is driving the convergence between the 
telecommunications, information technology and the broadcasting sectors. 
SUMMARY OF KEY AREAS WHERE DIFFERENT VIEWS WERE EXPRESSED, BUT NEVERTHELESS CLEAR 
TRENDS WERE IDENTIFIABLE 
• The pace of liberalisation infrastructure 
• The appropriate methodology for costing and financing of universal service 
• The future scope of application of the open network provision framework, the balance 
between general regulation and sector specific rules; and the methodology for 
calculating interconnection costs. 
• The grounds for limiting license numbers and the approach to licensing of trans-
European infrastructure and services 
• Mandatory sharing of essential resources, i.e. numbers, frequencies, rights of way 
THE REGULATORY AGENDA FOR TELECOMMUNICATIONS EMERGING OUT OF THE 
CONSULTATION 
The consultation on this Green Paper has necessarily extended beyond the pure 
issue of infrastructure liberalisation to encompass the overall regulatory 
environment to achieve the full liberalisation of telecommunications services and 
networks by 1 January 1998. On the basis of the comments and the consensus 
achieved, the Commission can now identify the following priorities in preparing 
the measures to ensure liberalisation of telecommunications infrastructure and 
services, and in particular, those measures which the Commission is required to 
table before 1 January 19965. 
This regulatory agenda for telecommunications complements the broader 
initiatives required to meet the employment, social and societal challenges and the 
preparation of other aspects of the regulatory environment (in areas such as data 
protection, intellectual property rights, audio-visual policy for the Information 
Society). The key points in this agenda are summarised below: 
5 See Council Resolution of 22nd July 1993 on the review of the situation in the telecommunications sector and 
the need for further development in that market (93/C 213/01 ; OJ 213/1, 6 August 1993). 
• Implementing the timetable for liberalisation 
The consultation has shown strong support for the linkage of full liberalisation of 
infrastructure to the full liberalisation of telecommunications services in 1998, 
subject to possible transitional periods6. 
At the same time, the Commission attaches considerable weight to thecalls from 
industry, business, service providers, users, and from mobile network operators 
and some fixed network operators with experience of competitive markets, for 
faster but limited infrastructure liberalisation now. For that reason, the 
Commission will put forward separate measures amending Directive 90/388/EEC 
(the services directive) with regard to the full liberalisation of telecommunications 
infrastructure and services from 1 January 1998; with regard to cable television 
networks, and with regard to mobile and personal communications. 
As regards the liberalisation of other alternative infrastructures the situation 
appears to be less Clear and has to be investigated further by the Commission. 
However, the Commission encourages, in particular, the use of such infrastructure 
for the pilot and other demonstration projects foreseen in the Information Society. 
Establishing a regulatory framework at an EU level for universal service in 
the area of telecommunications 
This should address, in particular, the scope, cost and funding of universal service 
Measures to liberalise telecommunications by 1 January 1998 will be 
accompanied by appropriate harmonisation measures designed to safeguard and 
ensure the development of universal service, in keeping with the policy followed 
by Council and European Parliament since 1990. 
In particular, the measures will ensure that any financial burden associated with 
the requirement on one or more operators at a national level to provide a public 
voice telephony service to all those reasonably requesting it can be properly 
assessed and shared out at a national level on a fair, efficient and equitable basis. 
Establishing a regulatory framework at an EU level for open access and 
interconnection to public telecommunications networks and services 
The framework at a Union level will also contain appropriate harmonisation 
measures designed to guarantee open access to public telecommunications 
infrastructure and services for both users and new market entrants. Such a 
framework will complement the application of general competition rules to 
interconnection arrangements. 
Subject to possible transitional periods if requested of up to 5 years for Greece, Ireland, Portugal and Spain; as 
well as a possible 2 years for very small networks, where justified, (i.e. Luxembourg). 
Harmonisation of the rules for interconnection to public telecommunications 
networks and services is a priority. New market entrants need access to existing 
public telecommunications networks and services under conditions that guarantee 
non-discrimination, equality of access and transparency. For these reasons, the 
Commission intends to present a proposal for a Directive on Interconnection to 
public telecommunications networks and services in the context of open network 
provision. 
Licensing in the field of telecommunications 
Licenses in the field of telecommunications implicitly restrict the freedom to 
provide services and can distort market structures. At the same time, licences 
can, within the limits set by the Treaty and, in particular, the competition rules as 
specified in Directive 90/388/EEC (as amended), provide an appropriate 
mechanism to ensure the achievement of aims such as the development of 
universal service or the establishment of conditions promoting the creation of a 
fair competitive environment. 
The Commission will propose before the end of 1995 amendments to Directive 
90/388/EEC7 in order to establish the grounds which may be used to limit the 
number of licenses, as well as to define categories of conditions which may be 
attached to licences, for the provision of public and private telecommunications 
services. 
The Commission will also propose amendments to its current approach to 
licensing8 to extend their scope to establish a common framework for licensing 
award procedures and the selection criteria used in such procedures, as well as 
promoting its approach in the field of mutual recognition of licenses. 
Initiatives are underway with regard to the co-ordinated national licensing of 
satellite-based Personal Communications services (PCS) in Europe, in order to 
allow such services to be provided throughout Europe at the earliest possible 
opportunity, with the opening of the licensing process by 1 January 1996 at the 
latest: 
7 Commission Directive of 28th June 1990 on competition in the market for telecommunications services 
(90/388/EEC ; OJ LI92,24.7.90) 
8 Amended proposal for a European Parliament and Council Directive on the mutual recognition of licences and 
other national authorisations for telecommunications services, COM(94) 41 final, 22.3.94, and Proposal for a 
European Parliament and Council Directive on a policy for the mutual recognition of licences and other national 
authorisations for the provision of satellite network services and/or satellite communications services, COM(93) 
652,4.1.94 
Ensuring a fair competitive environment 
It is clear from the consultation that there is a consensus that the balance 
proposed in the Green Paper between the application of general competition law 
and sector-specific regulation has to be maintained. At the same time, 
considerable weight is attached to those rules and the future development of the 
regulatory framework is likely to see a continuing reduction in direct regulatory 
intervention as the full effects of competition are felt. 
The Commission will also take into account the calls for more predictability, in 
particular as regards access and interconnection. In this respect, the appropriate 
measures to give further effect to the principles set out in Articles 85 and 86 will 
have to be assessed, in order to establish a more predictable environment if 
required. 
The international agenda 
The Commission recognises a clear consensus that priority must be given to multi­
lateral solutions within the framework of the on-going WTO Negotiations on Basic 
Telecommunications in order to achieve the overall aim of comparable and 
effective access to third country markets, and, in particular, the lifting of ownership 
restrictions, for EU network operators and service providers. Such an approach 
was recognised as preferable to bi-lateral initiatives between individual Member 
States and third countries. 
The consultation has confirmed that until the results of the WTO negotiations are 
clear, it will remain important for the Union to reserve its right to maintain 
equivalent conditions to those currently prevailing in third country markets with 
regard to market entry or the licensing of non-EU or EEA nationals or companies 
controlled by such nationals. The objective of proposing such conditions would be 
to promote open markets in third countries for European network operators and 
service providers through negotiations. 
Additionally, on-going action to promote the emergence of common European 
positions in international fora dealing with numbering and frequency allocations 
will be continued, as well as ensuring a global approach to many of the issues 
arising out of the Information Society. 
ACTION REQUIRED FOR THE FUTURE REGULATORY ENVIRONMENT 
Council Resolutions 93/C213/02 and 94/C379/03 call on the Commission to 
prepare before 1 January 1996 proposals for the future regulatory framework for a 
liberalised telecommunications environment. In the light of the priorities identified 
above the following timetable for action, respecting the necessary balance 
between the complementary areas of liberalisation and harmonisation, can now be 
established. 
Date Liberalisation Harmonisation 
Before 31 Draft amendment of Commission Common Position on proposal for a 
July 1995 Directive 90/388/EEC with regard to European Parliament and Council 
mobile and personal Directive for ONP Voice Telephony 
communications 
Draft amendment of Commission 
Directive 90/388/EEC with regard to 
the full liberalisation of 
telecommunications infrastructure 
and services from 1 January 1998 
Before 1 Adoption of amendment of Adoption of the proposal for a 
January Commission Directive 90/388/EEC European Parliament and Council 
1996 with regard to cable television Directive for ONP Voice Telephony 
networks 
Adoption of amendment of Proposal for amendment of Council 
Commission Directive 90/388/EEC Directive 90/387/EEC (ONP framework 
with regard to mobile and personal directive) and of Council Directive 
communications 92/44/EEC (ONP Leased Lines 
Directive) 
Adoption of amendment of Proposal for a European Parliament 
Commission Directive 90/388/EEC and Council Directive on the 
with regard to the full liberalisation application of the principle of open 
of telecommunications infrastructure network provision to interconnection to 
and services from 1 January 1998 public telecommunications networks 
and services 
If required, proposals for Adaptation of the current proposals in 
appropriate measures to give the field of licensing 
further effect to the principles set 
out in the Treaty (e.g. Article 85 and 
86), in particular, with regard to 
interconnection and access 
Proposal for a Council Decision of the 
co-ordinated licensing of Satellite PCS 
services within the European Union/ 
Date Liberalisation Harmonisation 
Before 1 Communication to the European 
January Parliament and the Council on the 
1996contd. preparations for a liberalised 
telecommunications environment, 
addressing in particular the issue of 
universal service 
Communication to the European 
Parliament and the Council on 
directory information and directory 
services 
Before 1 Adoption of any measures required Adoption by the European Parliament 
January to give further effect to the and Council of the measures set out 
1997 principles set out in the Treaty, in above 
particular in Articles 85 and 86 
Before 1 Completion of implementation by Completion of implementation by the 
January the Member States of the Member States of the harmonisation 
1998 liberalisation measures set out measures set out above according to 
above according to the timetables the timetables applicable 
applicable 
CONCLUSION 
The Commission believes that the Consultation has established a clear consensus 
around the main proposals put forward in the Green Paper and that therefore it 
has provided a major input to the measures which the Commission will table. 
On the basis of the consultation the Commission has prepared this report and now 
transmits it to the European Parliament and Council. 
TABLE OF CONTENTS 
SUMMARY II 
I INTRODUCTION 1 
II THE CONSULTATION PROCESS 4 
III COMMENTS RECEIVED ON THE MAIN POSITIONS IN THE GREEN PAPER 6 
III. 1 The removal of special and exclusive rights over infrastmcture 6 
111.2 Safeguarding and developing universal service 7 
111.3 Future open access principles, interconnection and interoperability 10 
111.4 Licensing 12 
111.5 Ensuring fair competition 15 
111.6 Access to rights of way, frequencies and numbering 16 
111.7 Action in neighbouring fields 17 
111.8 Employment, the social and societal impact 18 
111.9 The international dimension 19 
III. 10 The future evolution of the regulatory environment 20 
IV EVALUATION BY THE COMMISSION 21 
IV.l Areas of general consensus 21 
IV.2 Areas of discussion and identifiable trends 23 
V PRIORITIES FOR ACTION 26 
V.l Liberalisation schedule 26 
V.2 Establishing a regulatory framework at an EU level for universal service in 
the area of telecommunications 28 
V.3 Establishing a regulatory framework at an EU level for open access and 
interconnection to public telecommunications networks and services 31 
V.4 Licensing in the field of telecommunications 34 
V.5 Ensuring a fair competitive environment 37 
V.6 Access and availability for service providers and operators to essential 
resources 38 
V.7 Employment, the social and societal impact.. 40 
V.8 The international agenda 42 
V.9 Towards the Information Society 42 
V.10 Implementation. 46 
VI TIMETABLE FOR ACTION,. 47 
VII CONCLUSIONS 49 
LIST OF CONTRIBUTORS TO THE CONSULTATION ON THE 1995 GREEN 
PAPER ON THE LIBERALISATION OF TELECOMMUNICATIONS 
INFRASTRUCTURE AND CABLE TELEVISION NETWORKS 
XII 
INTRODUCTION 
The future development of Europe's telecommunications infrastructure is at the 
forefront of the debate on the Information Society, launched by the Bangemann 
Group Report on "Europe and the global information society"1, and in the 
Commission's Action Plan on Europe's way to the Information Society2. More 
recently this has been the focus of the discussions in February 1994 at the Gl 
Summit in Brussels.. At that meeting the definition of an adaptable regulatory 
framework was recognised as one of the 8 principles for the realisation of the Global 
Information Society. 
The Conclusions of the G7 Summit noted in that respect that: "the regulatory 
framework should put the user first and meet a variety of complementary societal 
objectives. It must be designed to allow choice, high quality services and affordable 
prices. It will therefore have to be based on an environment that encourages 
dynamic competition, ensures the separation of operating and regulatory functions 
as well as promotes interconnectivity and interoperability". 
An unprecedented growth and transformation of the telecommunications and 
information sectors is occurring. The telecommunications sector in the European 
Union is worth over 140 billion ecu and growing strongly. At the same time 
technological changes mean that new telecommunications services are developing, in 
particular in the areas of mobile and satellite communications but also in digital 
communications where new services based on various combinations of voice, data 
and image are becoming possible. The increased use of personal computers and 
other devices attached to telecommunications networks is reinforcing this trend. 
The prospect of the rapid growth and spread of the information society is, therefore, 
a very real one with telecommunications infrastructure and networks providing'the 
base on which a wide range of communications can flow. 
It is against this background that the Commission adopted the two parts of its Green 
Paper on the liberalisation of telecommunications infrastructure and cable TV 
networks3, (the Green Paper). 
In Part I of the Green Paper the Commission established the basic principle for the 
liberalisation of telecommunications infrastructure and the timetable according to 
which such liberalisation should be achieved. This involved an approach according 
to which mil liberalisation of infrastructure for the provision of voice telephony 
services to the general public would occur on 1 January 1998, subject to certain 
possible transitional arrangements. 
1 Europe and the global information society, Recommendations to the European Council, 26 May 1994 
2 Communication on Europe's Way to the Information Society. An Action Plan, COM(94) 347 final, 17.7.94 • 
3 Green Paper on the liberalisation of telecommunications infrastructure and cable TV networks - Part I : Principle 
and Timetable, (COM(94)440 final, 25.10.94) and Green Paper on the liberalisation of telecommunications 
infrastructure and cable TV networks - Part H : A common approach to the provision of infrastructure in the 
European Union (COM(94)682 final, 25.1.95). 
Additionally, the Commission called, in the light of the provisions of the EC Treaty, 
for limited action before that date to allow operators and service providers a free 
choice of infrastructure for the provision of telecommunications services which are 
already open to competition (such as tele-banking; video-conferencing, data transfer 
and the provision of voice and data services within corporate networks or closed 
user groups). 
Part I also identified the general safeguards which needed to be addressed in parallel 
with the opening up of full infrastructure competition in 1998. 
Part II of the Green Paper outlined for consultation this detailed regulatory 
framework envisaged to provide these necessary safeguards. In particular, it 
addressed: 
• Universal service 
and, in particular, the issue of its scope, the need for a common approach to 
identifying the cost of universal service, and the creation of common financing 
mechanisms to ensure the continuation and development of universal service in 
the Union in a competitive environment. 
• Interconnection 
the need for a clear and stable regulatory environment for interconnection 
drawing on the basic principles established for open access to 
telecommunications networks and services 
• Licensing 
and, in particular, the need for a common approach in national licensing award 
procedures and for an overall Union-wide framework for the conditions which 
may be attached to such licences. 
• Fair competition 
based on the full application of the Treaty competition rules in a manner which 
provides market players with a clear and predictable environment. 
• The international dimension 
which aims, on the one hand, at ensuring comparable and effective access to third 
country markets and, on the other, at promoting common Community positions 
in international fora in areas, such as numbering and frequencies. 
The Green Paper also addressed some of the important employment, social and 
societal issues flowing from a liberalised environment, and launched discussion -
from a telecommunications perspective - on the future evolution of the regulatory 
framework in Europe to meet the challenges of convergence of the IT, broadcasting 
and telecommunications worlds. 
5 At the same time, the detailed action to meet many of these broader challenges, 
particularly, the challenges in relation to employment, falls outside the scope of the 
pure regulatory framework and, as the Report acknowledges, must be the subject 
both of specific on-going initiatives at a Union-level, and wider study and discussion, 
including within the new Information Society Forum, and in the High Level Social 
Expert Group which will be addressing specific questions linked to employment, 
retraining and the organisation of work in the new environment. 
Part I of the Green Paper was considered at the Telecommunications Council of 17 
November 19944. The Council recognised the general principle according to which 
the provision of telecommunications infrastructure should be liberalised by 1st 
January 19985, including the additional transition periods for certain Member States 
in line with Council Resolution 93/C213/026. They also agreed on the need for a 
regulatory framework, addressing as "necessary safeguards", inter alia, the five issues 
mentioned above. Council request the Commission "to report to the European 
Parliament and the Council on the results of this consultation in order to allow for 
the determination of the necessary safeguards". This Communication constitutes 
that report. 
Council Resolution 94/C379/03 of 22 December 1994 on the principle and timetable for the liberalisation of 
telecommunications infrastructures, OJ C379,31.12.94 
A number of Member States urged the Commission in an associated statement to come forward as quickly as 
possible with proposals which provide for the usé of alternative network infrastructure for the services already 
liberalised. The Commission in turn preserved its right to take action in this area within its competence and 
according to its obligations. On 21 December 1994 the Commission adopted in draft a Directive amending 
Commission Directive 90/388/EEC regarding the abolition of the restrictions on the use of cable television 
networks for the provision of telecommunications services. The draft directive was published in the Official 
Journal of the European Communities on 28.3. 
A maximum of five years for Ireland, Greece, Portugal and Spain and a maximum of two years for Luxembourg. 
At this stage, it is still not clear to what extent those Member States will exploit these derogations. 
H THE CONSULTATION PROCESS 
The aim of the consultation was to obtain the views of all interested players on the 
future regulatory framework for a fully liberalised telecommunications environment. 
The public consultation period was initiated with the adoption of Part I of the Green 
Paper in October 1994 and continued until March 1995. The Commission received 
more than 100 written comments from European and national organisations, 
companies and individuals active in the telecommunications and related sectors. 
In addition to these written comments, a series of consultation meetings which were 
held in February and March substantially contributed to the work of the Commission. 
These hearings involved a Round Table for the Chairmen of Europe's network 
operators (fixed, mobile and licensed alternative infrastructure providers ); and a 
general two day hearing involving more than 125 organisations, companies and 
associations. 
Many of the broader social and societal issues and, in particular, the issue of 
employment, were also addressed in addition to the regulatory agenda at a meeting 
with a delegation representing European trade unions in the communications sector. 
More than 200 organisations in total participated either orally or in writing in the 
consultation. 
These included contributions from many of the Telecommunications Organisations 
(TOs), licensed or potential providers of alternative telecommunications 
infrastructure (including European cable associations) and mobile operators in 
Europe, as well as from the European Telecommunications Network Operators 
association; from service providers and national representative associations; from 
large and medium-sized users of telecommunications services and from user 
associations, as well as from the Bureau Européen de l'union des consommateurs 
(BEUC) and from individual consumer associations, from trade unions, and from the 
European Conference of Data Protection Commissioners; and from manufacturing 
associations and individual equipment suppliers, and finally from broadcasters, film 
makers and the European Broadcasting Union, as well as from organisations active in 
related sectors, such as advertising industries. 
Formal opinions on the Green Paper have also been adopted or are in the process of 
being adopted by the European Parliament7 and the Economic and Social 
Committee. The opinion of the European Parliament on Part I of the Green Paper 
was strongly supportive of the principle of infrastructure liberalisation and identified 
as central to the future regulatory structure many of the issues raised in the 
consultation, namely, universal service, interconnection, licensing, the need for fair 
competition and the international dimension of the new regulatory framework. It 
also stressed the broader social and societal issues linked to infrastructure 
liberalisation. 
Resolution of 7 April 1995 on Part I of the Green Paper. A further Resolution of the Parliament is in 
preparation on Part II. 
The Joint Committee on Telecommunications8 which brings together management 
and trade unions in the Telecommunications Organisations (TOs) within the Union 
also gave its opinion. 
Consultations at a European level were complemented by those held at a national 
level within a number of Member States. 
The Commission worked closely with the High Level Committee of National 
Regulatory Authorities, as requested by Council Resolution 94/C379/039. 
A list of the hearings and of the written comments received is set out in the Annex. 
8 Opinion of the Joint Committee, (not yet formally adopted). 
9 Council Resolution 94/C379/03 of 22 December 1994 on the principle and timetable for the liberalisation of 
telecommunications infrastructures, OJ C379,31.12.94 
m COMMENTS RECEIVED ON THE MAIN POSITIONS IN THE GREEN 
PAPER 
In the following paragraphs of this section, the main comments received during the 
consultation process are summarised according to the positions set out in the Green 
Paper. For those wishing further details of these comments, reference should be 
made to the full text of comments which are available on request10. 
III.l The removal of special and exclusive rights over infrastructure 
Strong calls were received for a clear and predictable regulatory environment in 
order to allow key investment and business planing decisions to be taken. The early 
establishment of clear dates for liberalisation was seen as a major element in 
providing a firm and predictable regulatory environment. 
The basic logic of linking the liberalisation of infrastructure to the full liberalisation 
of telecommunications services was accepted. Therefore the full liberalisation of 
infrastructure by 1 January 1998, subject to possible transitional arrangements was 
welcomed. Nevertheless, different views were expressed on whether liberalisation by 
that date should be achieved in one or two steps: 
• On the one hand, there was strong support from industry, users, 
telecommunications equipment manufacturers, mobile operators and from certain 
fixed network operators, urging the Commission to take more rapid action to 
open up the use of own and third party infrastructure before 1998 for 
telecommunications services which are open to competition now. This was seen 
as a vital step to improve the competitiveness of the European economy11 and to 
stimulating an improvement in the performance of incumbent operators was also 
highlighted. Additionally, the comments of the Bureau Européen des Unions de 
Consummateurs suggest that liberalisation should offer benefits to domestic 
consumers in terms of enhanced choice of services and lower prices for some 
services. 
In particular, it was stressed that competitive provision of alternative 
infrastructure could have a major effect in preparing both the TOs and the new 
entrants for fiill competition in 1998. 
• On the other hand, many fixed network operators supported a standstill on the 
liberalisation of telecommunications infrastructure until 1998. This reflected the 
concerns of those operators about their ability to maintain and develop universal 
service, if alternative sources of infrastructure were opened to competition, and, 
in particular, their ability to continue the substantial investment underway which 
was currently funded out of their most profitable business areas, which were the 
areas most likely to be subject to competition. 
10 A volume of collected comments will be sent out on written request to Commission of the European 
Communities, DGXHI, Secretariat A/1, BU 9/4/140, rue de la loi 200, B-1049 Brussels. (Fax : +32-2-296.83.91) 
11 In one case, an association of more than 40 large multi-national users highlighted that they estimated that their 
collective annual télécoms spend of more than $2.5 Billion was twice what they would be paying for equivalent 
networks and capacity in North America. 
Several operators and industry stressed that in order to establish real and effective 
competition and customer choice, competition must extend to and include the 
provision of the local loop. In this context, the proposed Commission directive on 
the abolition of restrictions on the use of cable television networks for the provision 
of telecommunications services was seen as an important step forward12. At the 
same time representatives of the cable television industry stressed the importance in 
addition of the removal of restrictions on direct interconnection between such 
networks and on the ability of cable networks to offer voice services. This would be 
essential to ensuring the necessary investment for such infrastructure to play a role in 
the emerging Information Society. 
The establishment of an appropriate regulatory framework was seen as essential for 
full liberalisation of infrastructure. This required urgent action on the part of the 
Commission to table the necessary proposals. Such a framework also required rapid 
adoption of pending legislative proposals, together with full implementation of the 
existing Union-wide framework. 
m.2 Safeguarding and developing universal service 
///. 2.1 The priority attached to universal service 
There was general acceptance of the continuing importance of universal service in a 
liberalised environment and of the three central issues identified in the Green Paper; 
namely, (i) scope, (ii) post and (iii) financing. Many organisations stressed that the 
issue of universal service should not be used to delay competition. Equally, it was 
stressed that universal service and competition should not be seen as being in 
opposition. Universal service had not always been delivered even under current 
monopolies, whilst a competitive environment was seen, by those with experience of 
competition, as stimulating improvements in service quality, innovation and leading 
to an extension in service penetration. 
///. 2.2 The concept of universal service 
There was continued recognition of the need for a common concept of universal 
service at a European level in order to allow the issues of its cost and financing to be 
addressed. Most operators, service providers and users felt that the current 
approach of identifying universal service as the basic voice telephone service was an 
appropriate starting point, but that the concept should evolve with changes in 
technology and market demand. Nevertheless any evolution in the concept should 
not create disproportionate barriers to market entry. 
12 Draft Commission Directive of 21 December 1994 amending Commission Directive 90/388/EEC regarding the 
abolition of the restrictions on the use of cable television networks for the provision of telecommunications 
services OJ. C76,28.3.95. 
Many contributions recognised that a distinction could usefully be drawn between 
universal service and universal service obligations. The former refers to the general 
set of telecommunications services which a Member State might require to be 
available throughout its territory, (e.g. a minimum set of leased lines), while the latter 
represents those elements of universal service that an operator would not voluntarily 
provide to particular customers (e.g. low income users) or customer groups in 
particular areas (e.g. high cost areas) because the revenue raised from such 
customers would fail to cover the costs involved. 
Many comments suggested that market demand (as shown through penetration 
figures for specific telecommunications services) should determine whether services 
were in future added to the core of universal service. 
Finally, different views were expressed as to whom should be subject to universal 
service obligations. In some comments it was considered that this was essentially a 
matter for national regulators to determine and that action at a European level should 
be confined to identifying the scope of universal service obligations, rather than 
specifying who should provide such services. 
At the same time, many mobile operators pointed to the obligations already placed 
upon them to ensure extensive geographic coverage and stressed their willingness to 
play a role in the delivery of universal service. Other comments suggested that 
universal service obligations should be the counterpart either of the grant of 
individual licences or of the grant of extensive rights of way, frequency allocations, 
etc. The role of new technologies in providing universal service more cost-
effectively was also highlighted. 
///. 2.3 A common approach to the costing of universal service 
Most respondents stressed the importance of having a common approach to 
assessing the cost of the universal service obligation in Member States. Many 
organisations supported the notion of "uneconomic customer" in the Green Paper, 
whilst some fixed operators felt that approach did not take full account of past 
historical investments, or that it would be difficult to calculate in practice . Several 
participants suggested that the real issue was which customers would the operators 
decide not to serve if the obligation to provide service to all were removed. 
Industry, users and some operators (including a number of mobile operators) -
particularly those with experience of competitive markets - stressed that universal 
service represented a commercial opportunity, which should be reflected in any 
calculation of its cost for that operator. They believed that estimates by incumbent 
operators would inevitably over-estimate the actual costs involved. Comments 
therefore supported the approach suggested in the Green Paper for calculating the 
cost of serving uneconomic customers, and, in particular, supported the use of 
forward looking long-run incremental costs as the basis for interconnection pricing. 
Additionally, it was suggested that the National Regulators should set limits to the 
overall level of interconnection charges. A particular feature of the overall approach 
should be that it should stimulate more efficient operation. 
Other fixed operators believed that universal service would remain a significant 
"burden" for them, especially in a liberalised environment. Those operators felt that 
they still needed time to establish what the actual costs involved were. In their view, 
any common approach to the cost of universal service would only be acceptable if it 
took account of both current and historical costs and they therefore favoured fully 
distributed cost methodologies.. 
777.2.4 The role of tariff-rebalancing and targeted schemes 
Generally, there was agreement that : 
• the process of tariff rebalancing should continue at a politically acceptable 
speed. Several comments suggested that firm dates for the completion of the 
process should be established. At the same time consumer organisations 
suggested that tariff rebalancing should not undermine the affordability of 
universal service and that the domestic consumer should not be the last to 
benefit price changes. 
• current political restraints on more flexible tariffs and on the speed of 
rebalancing were the major cause of the losses linked to the provision of 
universal service, and should be removed. 
• operators should be freed from non-telecoms-related obligations in line with 
the narrow concept of universal service, and such obligations should not form 
part of the calculation of the cost of universal service. 
Z/7.2.5 Funding mechanisms for universal service 
There was agreement that key characteristics of any financing mechanism should be 
that it does not distort the market structure or delay the introduction of competition, 
and that it places pressure on operators to improve their performance. 
Divergent views were expressed over the future funding mechanisms. A majority of 
organisations, including fixed network operators with experience of competitive 
markets, finding the proposal for national universal service funds (to which all market 
participants made a fair contribution) to be an appropriate way forward. Others still 
believed that access charges offered considerable advantages and were a good basis 
for discussion and would avoid the administrative overheads that a Fund might entail. 
Some operators nevertheless stressed the need for strict controls to ensure that the 
funds were used purely for telecommunications-related purposes 
Questions were raised about who would contribute to such funds, e.g. would 
providers of data services or private network operators also contribute? There was 
quite widespread support for an approach requiring all market participants (fixed and 
mobile network operators and service providers) to make an appropriate contribution 
to such funds based on their turnover. Payments into a Fund were not seen as being 
necessarily linked to potential obligations to provide elements of universal service 
directly. Questions were also raised about who would be entitled to draw on such 
funds, e.g. would payments be made to customers or to operators who were 
providing service? A number of comments suggested that, where possible, payments 
should be made directly to users in order to allow them a choice of service provider. 
One view was that current operators should be obliged to list areas or customers 
who they were unwilling to serve thus giving other operators the possibility to bid to 
provide service. Other respondents were not in favour of "franchising" or pointed 
out some of the practical difficulties of putting in place "pay or play" systems. 
It was also pointed out that not all Member States had put in place an effective 
independent regulatory authority which could supervise such mechanisms 
In general it was agreed that any funding system should be structured in such a way 
as to continue to exert pressure on operators to improve efficiency. Some fixed 
network operators believed that the case for independent universal service funds had 
not been sufficiently made. Additionally, it was emphasised that the need to create a 
universal service fund should not be used to delay competition, given the potential 
role of access charges as a financing mechanism even in the absence of a national 
fund. 
III. 2.6 The provision of universal service in the peripheral regions 
A number of contributions stressed the role of effective communications in the 
economic development of these regions and in their integration into the Union13. 
The Trade Unions stressed the importance of effective access in the peripheral 
regions to advanced telecommunications networks and services as a vital element in 
ensuring regional cohesion within the Union. At the same time this raised the issue 
of whether competitive infrastructure providers could be relied upon to invest the 
substantial sums required to develop such facilities in more remote areas. 
III.3 Future open access principles, interconnection and interoperability 
III. 3.1 Open access principles for infrastructure, ensuring fair competition and the 
evolution of Open Network Provision 
There was general agreement on the need for the future regulatory environment to be 
flexible; avoid over-regulation and to be proportional to the type of services and 
networks being regulated. 
There was also recognition of the increasing importance of competition rules and the 
need for the future regulatory framework to provide an appropriate balance between 
sector specific regulation and the general application of competition rules. This led 
some fixed network operators to conclude that there should be increasing reliance on 
competition rules, but that during the transition to effective competition there was a 
key role for a regulatory framework to ensure fair interconnection and 
interoperability. 
A number of operators and organisations stressed that an evolving ONP framework 
should apply not simply to "dominant" undertakings but to undertakings which 
13 One example cited in comments was of the potential benefits of cheaper communications for the development of 
tourism and travel in these regions, which is already a key industry in such areas. The travel and tourism 
industry according to its estimates already accounted for about 1 in 8 jobs within the European Union, 
generating 988 BECU in gross output and is one of the World's largest users of telecommunications and data 
communications services. 
10 
controlled "essential" or "bottleneck facilities". This would extend regulatory 
controls beyond current incumbent operators to those new competitors, who would 
have bottleneck facilities. One view was that access to the local loop was the main 
bottleneck. 
A majority of operators stressed that they should be free from asymmetrical 
regulation, if fair competition was to be established. The basic principle should be 
that any organisation should be able to provide any service using any technology. 
III. 3.2 Cost accounting and accounting separation 
Most operators accepted the need for effective accounting separation and adequate 
cost-accounting between different business activities, whilst some organisations -
particularly, some mobile operators - went further and called for separate subsidiaries 
being established for different types of telecommunications or other services. Those 
organisations also pointed to the substantial economies of scale and marketing 
advantages which fully integrated operators might enjoy and which might require 
particular regulatory attention in order to safeguard competition. Additionally, 
different views were expressed with regard to which organisations should be subject 
to cost-accounting rules, with many incumbent operators advocating systems which 
applied to all market players, whilst other contributions highlighting the need for an 
approach which would be proportional to size and/or market share of the 
organisations involved in order to encourage market entry. 
///. 3.3 Priority to be given commercial agreements within a framework at a European 
Union level for interconnection and interoperability 
The emphasis in the Green Paper on commercial agreement as the basis for 
interconnection was welcomed, but it was nevertheless stressed by most 
organisations that such negotiations had to be underpinned by an appropriate 
regulatory framework, which included dispute resolution procedures, if such 
interconnection was to be brought about rapidly. 
Some comments, particularly from those with experience of competition in mobile 
and fixed markets, highlighted the difficulties in negotiating interconnection in 
markets such as the UK and New Zealand. 
Number portability and equal access were also seen as critical issues for effective and 
fair competition and it was considered that these should be addressed in the 
interconnection framework. Equal access was taken to include both equal access for 
users in terms of the numbers given to particular operators and telecommunications 
services, and also issues of physical access, such as collocation of equipment. 
///. 3.4 The proposed framework for interconnection to public telecommunications networks 
and telecommunications services -
The proposal for an interconnection directive for public telecommunications 
networks and services was generally welcomed as providing a framework for 
interconnection negotiations, a common approach to identifying interconnection 
costs and accounting approaches, and for putting in place dispute resolution 
mechanisms. Many mobile operators also stressed their need for direct 
interconnection with both mobile and fixed networks. At the same time many 
11 
comments stressed the urgent need for such a framework to be in place in time for 
1998, for it to be uniformly implemented throughout the Union and for national 
regulators to apply the rules effectively in order to allow competition to take off. 
Given the heavy burden which scrutiny of interconnection would place on national 
regulators, some organisations stressed the value of interconnection agreements 
being publicly available (subject to confidentiality for certain technical and 
commercial information), to allow for examination by other market players. 
At the same time, it was stressed that any interconnection framework must be 
supported by tariff rebalancing and greater tariff freedom. 
777.3.5 Interconnection charges / cost accounting mechanisms 
m 
Several contributors called for standard interconnection contracts to be developed or 
for standard terms to be available in addition to the freedom to negotiate terms. 
Many stressed the importance of adequate and appropriate cost accounting 
mechanisms to deal with interconnection and with fair competition generally. Some 
contributions argued that accounting separation between wholesale and retail 
activities was more appropriate than accounting separation between infrastructure 
and services per se. 
Many comments stressed that in the case where infrastructure or network operators 
enjoyed special or exclusive rights in other sectors (e.g. railway companies, energy 
utilities, etc.), there should be strict accounting separation between the two areas of 
business. Some also called for structural separation. 
Some operators argued that they should be allowed to recover a full share of 
common costs in interconnection agreements. However, many commented that it 
was important to take into account the inefficiencies of the incumbent and that it was 
illogical to reward automatically such inefficiencies. 
III. 3.6 Standards and interconnection 
There was strong support for the continuation and acceleration of standardisation 
activities at a European and global level, as well as for an approach which focused on 
the voluntary application of standards. Nevertheless, certain organisations stressed 
that the need for interconnection and end to end services in a competitive 
environment might still require the use of certain mandatory standards. 
Several contributions stressed that there were a series of important issues 
surrounding interconnection such as standards, interfaces, access to network 
information, which were not purely related to competition or financial issues. 
III. 4 Licensing 
The issue of licensing of both telecommunications infrastructure and services was a 
central element in the discussions on the Green Paper. 
12 
Ill 4.1 The overall approach to licensing 
The basic principles for licensing of transparency, non-discrimination and 
proportionality were broadly accepted. In particular, there was wide support for the 
idea that any licensing regime14 should take account of the size and type of services 
which a licensee would offer and the rights which the licensee would enjoy15. Most 
comments therefore supported the view that the provision of telecommunications 
services to the general public might be subject to more stringent conditions than 
those applied to the provision of 'private' telecommunications services; and that the 
provision of services by organisations with rights to use limited resources 
(frequencies, way leaves, numbers) might justify a stronger degree of regulatory 
intervention. 
A number of comments linked the issue of proportionality to an approach which 
would balance the obligations attached to a licence with the rights enjoyed by the 
licence holder. For example, an organisation required to provide universal service to 
the general public should be given the extensive rights of way and powers of 
compulsory purchase required to deliver such services, whilst similar rights would be 
disproportionate in the case of a corporate network providing telecommunications 
services to a closed group of users. This approach could give rise to the creation of 
different types of licence reflecting the different rights or obligations sought by an 
operator. 
Potential suppliers of pan-European telecommunications services and networks, and 
the equipment industry, proposed the granting of licences through a single body at a 
European level, or at the very least co-ordinated licensing procedures. At the same 
time, given the view that licensing would be regulated primarily at a national level, 
the importance of a clear European level framework for national licensing procedures 
was highlighted in many comments. 
The distinction between telecommunications infrastructure and services 
A number of comments raised the apparent distinction in the Green Paper between 
licensing telecommunications infrastructure and services, which led them to suggest 
that the Green Paper envisaged separate licensing of the two elements. Some 
comments considered this to be an artificial distinction and to potentially deny 
economies of scale and vertical integration. 
In general, there was acceptance of the position in the Green Paper suggesting that 
the provision of telecommunications services on a resale basis would not normally be 
subject to individual licenses. Any conditions which might be applied to such 
services through general authorisations would reflect the type of services provided. 
14 
15 The term "Licensing1 is used here to cover any type of authorisation to offer telecommunications services granted 
by a Member States. 
Conversely it was suggested that the rights granted in any licence should reflect the obligations placed on the 
licensee, so that a requirement to provide universal service might justify the grant of rights of way / powers of 
compulsory purchase, etc. which would not be justified in the case of a licence for the provision of services to a 
private group of users. 
13 
In this context, it was pointed out that the provision of transmission capacity would 
be characterised as a service. 
Some contributors emphasised that the provision of 'raw' capacity was neither a 
service nor the operation of a network and should not be subject to a licence. Some 
comments also stressed the approach in Sweden of only licensing 
telecommunications services rather than infrastructure. 
Some emphasis was also placed on the need for licensing to be flexible enough to 
encourage new technologies and services. This might not always be the case, where 
licences, had to be pre-announced rather than reactive to possible requests to use 
new technologies or to deliver highly innovative services. 
III. 4.2 Licensing award procedures and grounds for limiting licence numbers 
Support was expressed for the basic approach of two identifiable categories of 
conditions (namely, essential requirements and public service requirements in the 
form of trade regulations) which would support a European level framework for 
licensing procedures, selection criteria and for the conditions attached to licenses. 
In particular, there was general support for the expansion of the essential 
requirements to include protection of the environment, providing that essential 
requirement was applied in a proportional manner to ensure that the least limiting 
approach was taken to meet environmental concerns. 
Many comments supported the Green Paper in removing the national regulators 
discretion in determining licence numbers on the basis of an economic assessment of 
the market. Several comments sought greater clarification of the grounds for 
limitation of licences, and, in particular, the role of "financial viability of the 
operator" in potentially refusing a licence. It was important to ensure that trade 
regulations could not be used as an indirect mechanism for managing competition 
and it was equally suggested that once Member States had instituted a scheme 
guaranteeing the provision of universal service, the restriction of the number of 
licences on the grounds of trade regulations would no longer be appropriate. 
On the other hand some comments suggested that account should be taken of the 
need not to undermine investment decisions of new entrants or existing operators by 
having an entirely open market, particularly as rapidly decreasing prices meant that 
third or fourth entrants might be able to enter the market at considerably less cost 
than the that incurred by the incumbent operator. 
III. 4.3 Selection procedures and licence conditions 
A number of comments emphasised that the award of licences through auctioning 
would be inconsistent with the general principles of transparency, proportionality and 
non-discrimination. 
Additionally, comments stressed that licence conditions should highlight the principle 
of non-discrimination and impose obligations to ensure compliance with competition 
rules. 
A number of national regulators stressed the possibility of imposing obligations in 
licences linked to national security or public policy objectives. The European Data 
14 
Protection Commissioners stressed the need for licences to ensure a high standard of 
data protection. 
III.4.4 Obligations to share infrastructure 
In relation to restrictions linked to environmental considerations, there was some 
support for the possible sharing of infrastructure on the basis of commercial 
negotiations. There were, however, different views on the extent to which such 
sharing should be mandated for different types of infrastructure. On the one hand, 
the technical and legal difficulties inherent in sharing were raised. On the other, it 
was emphasised the possibility of sharing would stimulate service competition and, in 
particular, would limit the freedom of national regulators to limit the number of 
service licences on the basis of lack of rights of way. It was also suggested that 
greater co-ordination should occur between utilities, whenever new infrastructure 
was being installed to minimise the environmental impact. 
III.5 Ensuring fair competition 
In general, many organisations felt that the competition rules would play an 
increasingly important role in the future development of the telecommunications 
sector, both in promoting new alliances and co-operation in a manner compatible 
with competition rules and as an essential element of the future regulatory 
framework in areas such as licensing, interconnection, universal service and access to 
essential resources. In particular, the role of competition rules as part of any general 
regulatory framework was stressed in relation to assessing cross-ownership of 
different networks and/or joint provision of network and services, and the 
examination of new global and regional partnerships and alliances. 
The key competitive concern was, however, the need even after liberalisation to 
ensure a fair competitive environment and to protect against the risks of abuse of the 
incumbent operator's considerable market power. In this context, the need for a 
clear regulatory framework was broadly recognised, through it was accepted that the 
balance between sector specific regulation and the application of general competition 
rules should evolve to reflect the degree of competition in the marketplace. 
A specific concern raised by consumer, organisations in the context of emerging 
alliances was the need to ensure that such alliances genuinely led to beneficial 
competition and did not simply reinforce domestic market positions. 
The need for accounting separation between the different activities of network 
operators and/or utilities who enter the télécoms market was raised by a number of 
fixed network operators, as well as by the cable television industry in respect of TOs 
which also own cable networks. The advantages enjoyed by incumbent operators in 
terms of customer loyalty; economies of scale; ability to be the price leader for many 
services and the cost for customers to change to other operators were also" 
highlighted. At the same time, most organisations supported the Green Paper in not 
favouring line of business restrictions, as these would potentially hold back the trend 
towards greater convergence. Even so, divergent views were expressed about any 
approach which applied regulation in an asymmetrical manner. 
15 
A frequent concern raised in the consultation was the need to ensure that new 
entrants were not able to cross-subsidise their télécoms activities from profits derived 
from other monopoly areas, and that regulators should ensure that there was services 
or capacity of such operators was not priced at an unfair or predatory level. 
IQ.6 Access to rights of way, frequencies and numbering 
There was general agreement on the need to make best use of available resources in 
a number of fields in order to make greater infrastructure competition more effective. 
Such access should generally result from commercial negotiation, but within a 
common European framework. 
With regard to trans-European networks some industry associations suggested that 
access issues might be best dealt with at a European level. 
III. 6.1 Rights of Way 
With regard to rights of way, it was suggested that a broad view should be taken. 
Access to rights of way could involve duct and pole sharing, but should also allow 
access to corridors used for microwave and satellite links within urban areas and 
landing sites and non-anchor areas for submarine cables, . Some operators stressed 
the role of commercial negotiations in such sharing, whilst others raised the issue of 
charges for such access and whether it would have to be cost-based or whether it 
could reflect the value to the competitor gaining access. 
Different views were expressed in relation to mandatory sharing, with many 
operators being strongly opposed to this, in particular, because of the problems of 
security, available resources and questions of legal liability which could arise. 
7/7.6.2 Frequencies 
Generally, comments supported the approach towards frequency within the Green 
Paper and the emphasis on a pan-European approach where possible, though some 
organisations suggested that the actual allocation of frequencies should nevertheless 
remain a national responsibility. With regard to the fees charged for frequency a 
number of comments stressed that a common approach was required throughout the 
Union, limiting such fees to the recovery of administrative charges only. 
There was widespread agreement within the telecommunications sector on the need 
for a re-distribution of frequencies between telecommunications, broadcasting and 
defence uses. 
Additionally, the equipment industry stressed the need for a global approach in 
frequency allocation, with sufficient advance notice given to industry, in order to 
allow the emergence of World markets. 
At least one broadcaster suggested that future frequency policy should take account 
of specific national situations with regard to who can decide and at what level 
decisions on frequency use would be taken. 
16 
777.6.3 Numbering 
There was general support for the approach proposed in the Green Paper. 
Fundamental issues of number portability (i.e. the ability for a customer at a given 
address to retain the same number when changing operators) and number ownership 
were raised as central elements to achieving effective competition. 
At the same time, both operators and equipment manufacturers stressed the need for 
full consideration to be given to the cost involved in any replanning of numbers, and, 
in particular, in moves towards the creation of a European Numbering Space. 
III. 6.4 Directories 
Access to directory information was also seen as an essential for effective 
competition, and adequate competitive safeguards should be put in place. 
Additionally, many organisations stressed the need for a universal telephone 
directory and directory enquiry service to continue to be offered, even in a 
competitive environment - and the Commission should provide clarification as to the 
practical arrangements to guarantee this. This was of particular importance for 
consumers, as well as the right for them to be left out of any public directory in they 
so requested. 
III.7 Action in neighbouring fields 
Generally, there was recognition that the development of telecommunications had to 
proceed in parallel with a Union initiatives in neighbouring areas if the Information 
Society was to be realised and potential barriers to its development were to be 
removed. 
777.7.7 Data Protection 
The European Data Protection Commissioners stressed the need for clear rules 
guaranteeing data protection and privacy as a fundamental requirement of a 
liberalised telecommunications market. They therefore welcomed the progress that 
had recently been made on the general Data Protection Directive16 and hoped that 
speedy adoption of the telecoms-specific proposal would follow. They also stressed 
the need to avoid an Information Society in which only some users could afford full 
data protection. Therefore they believed that it was important that facilities such as 
the ability to block calling line identification were provided free of charge. 
Some operators and users believed that a more voluntary approach, involving codes 
of practice, could be of equal value and that detailed regulation could act as a serious 
brake on market development. A specific concern raised by both operators and by 
equipment manufacturers was the need to ensure that the common. European 
framework for data protection did not create unjustified barriers to the development 
of global communications. 
16 Proposal for a Council Directive concerning the protection of individuals in relation to the processing of personal 
data, COM(90) 314, OJ C277, 15.11.90. 
17 
777.7.2 A udio-visual policy 
There was recognition that within a converged environment audio-visual policy and 
telecommunications policies must evolve in a coherent fashion, whilst respecting the 
different policy objectives of each sector. This should be reflected in an approach 
which would allow the separation out of the regulation of transport and the 
regulation of the content provided over such communications infrastructures. Other 
organisations stressed the priority to be attached to broadcasting regulation over 
telecommunications regulation because of its link to fundamental rights, such as the 
right of free speech. 
Content providers stressed that in the context of new communications services 
driving the Information Society it was essential to ensure that open access was 
guaranteed both for consumers and content providers and that unnecessary 
regulatory, trade and other barriers preventing this must be removed. 
III. 7.3 Plurality and cross-media ownership 
A number of comments pointed to the need for national policies relating to plurality 
of the media to be respected in any evolution of the regulatory framework for 
telecommunications. At the same time, comments emphasised the role of 
competition rules in assessing issues linked to the economic aspects of cross-media 
ownership and the imposition of a priori line of business restrictions were not 
supported. 
III. 7.4 Intellectual property rights. 
There was general support for the current lines of Commission policy with regard to 
the evolution of copyright and to database protection, with emphasis placed on the 
need to adapt existing forms of protection to new media. It was also suggested that 
a distinction could usefully drawn between IPRs applying to the generator and the 
user of a work, and the position of an operator who is simply providing the 
transmission medium. This analogy might also usefully be applied to both data 
protection and content regulation. 
Content providers and potential service providers stressed the importance of 
adequate intellectual property protection in order to guarantee investment in an 
environment where technology and liberalisation multiply the possibilities for access 
to information. Attention focused on the need for strong and effective copyright 
protection; support for technical solutions to control unauthorised use of content, 
and effective global protection of intellectual property through negotiations at an 
international level, including speedy implementation of the Trade Related Intellectual 
Property (TRIPs) agreement. 
III.8 Employment, and the social and societal impact 
There was general support for the approach taken on the issue of employment in the 
Green Paper and, in particular, the link drawn between technological advances and 
the decline in employment in the traditional operators. At the same time some 
operators stressed the role of competition in speeding the rate of this decline, without 
wanting to call into question the timetable for liberalisation. 
18 
Nevertheless for the Joint Telecommunications Committee and for the Trade Unions 
the impact of liberalisation on employment amongst current incumbent operators was 
considered to be a major determinant of the pace of liberalisation in the Union. 
Whilst they accepted that shifts of employment were an inevitable consequence of 
technological advances, they feared that rapid liberalisation of alternative 
infrastructure could only accelerate the speed with which changes in employment 
proceeded. In this context stress was placed on the need for national and Union 
funds to be made available to promote-retraining and re-deployment of the 
workforce, similar to schemes set up for industries, such as the coal and steel 
industries. 
An additional issue raised by the social partners was the quality of the new jobs 
which would be created, in terms of working conditions, investment in training and 
pay, which they perceived as inferior to those currently existing in many incumbent 
operators. 
Many organisations, particularly, those with experience of competitive markets, 
stressed that liberalisation should stimulate growth and hence create jobs throughout 
the European economy. In this context, on-going Commission studies should 
analyse the trends in more detail and an active dialogue should continue with all 
social partners on how this transition could best be managed. 
Emphasis was also placed in comments and in the opinion of the Joint Committee on 
the need forvboth training and education for people and for Small and Medium-sized 
Enterprises (SMEs), promoting the use of new technologies, as well as retraining for 
those previously employed in the telecommunications sector. 
Contributors also highlighted the wider societal challenges, such as ensuring that 
people could manage the increased volume of information by avoiding exclusion of 
particular groups from the Information Society. 
III.9 The international dimension 
777.9.1 Priorities for common Community positions in global fora 
A number of operators, particularly, mobile operators also stressed that common 
Community positions were required in relation to issues such as frequencies and 
numbering: 
777.9.2 Developments in WTO 
Strong support was given from all participants for the multi-lateral approach 
currently being followed by the Union in seeking comparable and effective access to 
third country markets, in particular by operators and the equipment industry. 
However, some operators and regulators stressed that in their view the best means to 
achieve a successful conclusion of on-going negotiations was to ensure that new 
barriers were not raised in Europe limiting entry to the EU market, whilst others 
highlighted the need for Community legislation to contain appropriate safeguards to 
reflect the degree of access enjoyed by European companies in third country 
markets. 
19 
III. 10 The future evolution of the regulatory environment 
A number of organisations recognised the importance of the issues raised by the 
Green Paper in relation to the increasing convergence of telecommunications, 
information technologies and the media. This was seen as a central component of the 
Information Society and it was hoped that these issues would be further developed in 
the report on the Green Paper consultation. Nevertheless, it was stressed by 
broadcasters that it would be important to remain aware of the different objectives 
which motivate regulation in the respective sectors and of the different patterns of 
regulation currently found in both sectors. 
The emphasis placed on the role of private investment in developing the Information 
Society was welcomed and the future regulatory environment would to a large extent 
determine whether such investment would be made. 
The Trade Unions suggested that regulators should seek to ensure the emergence of 
the Information Society by imposing obligations in future infrastructure licences to 
ensure that infrastructure (including cable TV infrastructure) would be capable of 
delivering of broadband inter-active services. Their concern was to avoid the 
implementation of new technologies, in particular, radio-based applications which 
would have built-in obsolescence 
The role of new players, such as the advertising industry, on the superhighways was 
also raised. Revenue from such advertising might play a significant role in 
broadening the penetration of the Information Society and in ensuring the users 
could afford the services on offer. To achieve such a result, however, priority should 
be given to an open regulatory environment. 
With regard to the issue of who should regulate in a converged environment, some 
organisations suggested a need for a central European regulatory authority. 
The principles derived from telecommunications regulation were considered by some 
to serve as a useful base for the future regulation of the sector, and in particular, the 
progressive relaxation of regulation as competition is established and the need for a 
coherent regulatory model which can cover all aspects of the communication sector. 
Encouragement was given by the equipment industry to the current initiatives from 
the Commission forging links between the public and private sector for specific 
Information Society projects. 
20 
IV EVALUATION BY THE COMMISSION 
On the basis of the comments and its analysis of the submissions, the Commission 
considers that the main principles and objectives set forth in the Green Paper have 
found broad support. On this basis the Commission considered it possible at this 
stage to : 
- identify areas of general consensus amongst all market participants; 
- set out general trends which gained majority support in those areas in which 
consensus is still not possible. 
These are set out below. 
TV. 1 Areas of general consensus 
The Commission has found from the consultations the following areas of consensus, 
indicating that there is : 
general support for the agreement on the full liberalisation of 
telecommunications infrastructure and services by I January 1998, subject to 
possible transitional arrangements. 
This implies an urgent need to agree and implement the future regulatory 
framework for liberalisation from the beginning of 1998. 
agreement on the need for an appropriate, transparent and effective regulatory 
framework to allow effective competition, particularly in the areas of universal 
service, interconnection and licensing. 
recognition of the need for a common approach in defining the scope of 
universal service and in identifying its cost. 
For the moment universal service should comprise the basic voice telephony 
service, but the concept should be reviewed as necessary. There is also 
agreement that it is imperative to have a fair, common and transparent approach 
to costing universal service so as to ensure à level playing field and encourage 
effective competition. 
widespread support for effective rules for interconnection, based on 
commercial negotiation within a common European regulatory framework, 
and effective arbitration mechanisms to resolve disputes. 
To assist this, there was also general support for legislative measures dealing 
with interconnection to public telecommunications infrastructure in the context of 
Open Network Provision. 
21 
general support for a regulatory framework at a European level for licensing 
or granting authorisations within the European Union, based on the principles 
of transparency, non-discrimination and proportionality 
Further clarification was sought concerning the perceived distinction in the Green 
Paper between the licensing of telecommunications infrastructure and the 
licensing or authorisation of telecommunications services. At the same time, the 
underlying principle of proportionality was accepted, i.e. that licence 
conditions must be proportional to the type of services provided and to the 
means of delivery of those services (e.g. provided over the service providers' own 
/ third party network or provided via the public network) 
This means that service providers who do not own the infrastructure over which 
their telecommunications services are provided should be subject to less 
regulation (general authorisations) than operators, owning an extensive network 
with frequencies and rights of way (individual licences). Equally, the provision of 
public telecommunications services could justify stricter regulatory controls than 
the provision of services within a corporate network or to a closed group of 
users. 
On this basis, the provision of telecommunications services using third party 
infrastructure should be governed by lighter regulation such as general 
authorisations, whilst the facilities-based provision of public telecommunications 
services would be subject to class or individual licences depending on the degree 
of access to common resources being sought or whether universal service 
obligations were involved. 
General recognition that the competition rules will play an increasingly 
important role in the development of the sector. 
Strong agreement on the need for the European Union to seek comparable and 
effective access to third country markets both for operators and the equipment 
sector. 
General recognition of the need for further action and assistance in relation to 
changes in employment in a liberalised telecommunications sector, in education and 
training needs, and in the evolution of the working environment. 
General recognition that technological change is driving the convergence 
between the telecommunications, information technology and the 
broadcasting sectors. 
This is driven by rapid advances in computing (digitisation, processing power) 
and the introduction of new switching and transmission technologies. 
At the same time there is a wide belief that the regulation of the transport 
mechanism (i.e. the infrastructure and related services) can and should be kept 
separate from the regulation of content, thereby maintaining the status quo 
between the telecommunications and broadcasting areas. 
22 
TV.2 Areas of discussion and identifiable trends 
Based on the consultations, the Commission considers the following trends can be 
identified within those areas where different views were put forward: 
The pace of infrastructure liberalisation 
A consensus has not yet emerged concerning the pace of infrastructure 
liberalisation, and, in particular, on a rapid but limited liberalisation of certain 
types of infrastructure in order to allow a free choice of infrastructure for the 
delivery of telecommunications services which are already open to competition. 
Many fixed network operators and some national regulatory authorities do not 
believe that early limited liberalisation could take place without putting at risk the 
financial viability of incumbent operators, potentially putting at risk the delivery 
of universal service. 
Nevertheless, industry associations, users, service providers and some operators 
with experience of competitive markets believe that limited liberalisation is vital 
to improve the competitiveness of European business. It will be a key 
component in developing real competition from 1 January 1998. In particular, 
competing mobile operators stress their urgent need to have alternative sources 
of infrastructure in order to allow them to gain better control over their costs. In 
this context, the draft proposal on the liberalisation of cable television networks 
was therefore welcomed as a first step, and some comments distinguished 
between, on the one hand, the liberalisation of cable TV networks and of 
alternative infrastructure for mobile networks, and on the other hand, the general 
liberalisation of alternative infrastructure. Those comments were in favour of 
and early liberalisation of the former. The position with regard to an early lifting 
of restrictions on all alternative infrastructures is more ambiguous. 
Costing and financing of universal service 
Whilst there is full agreement on the need for a common and transparent 
approach at a European level to both the scope and costing of universal service 
obligations, different views were expressed on how costs should be allocated 
amongst market players. A majority of comments suggested what they termed 
a dynamic "net cost" approach to the costing of universal service which involved 
taking a forward looking approach to both costs and revenue, whilst some 
incumbent operators suggested that the cost of universal service should take into 
account their past investments. 
23 
A majority of comments favour an approach involving universal service funds, 
though others, particularly, some incumbent operators give preference to access 
charges. Comments also pointed out the various forms that universal service 
funds could take depending on (i) who administers them, (ii) who is liable to 
contribute to them and (iii) who benefits from the funds (customers, service 
providers or operators?). 
To whom will the Open Network Provision rules apply in future? 
Different views were also expressed over the scope of application of a future 
interconnection framework in the context of Open Network Provision, with many 
incumbent operators favouring control of "a bottleneck facility" as the main 
criteria for interconnection obligations instead of criteria based on market share 
alone. 
The balance between general regulation and sector specific rules for 
interconnection 
Although there is general agreement on the need for a regulatory framework for 
interconnection at a European level, some incumbent operators believe that 
general competition rules should be emphasised over sector specific regulation. 
On the other hand, a number of operators as well as, service providers and users 
all see an important role for a clear regulatory framework to underpin 
commercial negotiations at least for a transitional period until competition is 
effectively established. 
The cost methodology for interconnection 
Many fixed operators believed that fully distributed cost methodologies should be 
used in order to ensure that past investment in networks would be fully 
recovered, whilst others operators with experience of competitive markets and 
many other organisations stressed the value of long run incremental costs - in 
particular, as a mechanism for encouraging greater efficiency within incumbent 
operators. 
The grounds for limiting license numbers and the licensing of trans-European 
telecommunications networks and services 
On licensing, there are still divergent views concerning whether national 
regulatory authorities should be able to limit licence numbers on the basis of their 
subjective assessment of market conditions. Many comments suggest that there 
should be no 'a priori' limitation on numbers, other than physical limitations 
flowing from narrow interpretation of the essential requirements (primarily, 
limitations linked to physical resources, principally radio-frequency). 
24 
Additionally, comments from potential providers of pan-European infrastructure 
or services, including the equipment industry, recognised the potential role for 
either a European Regulatory Authority to award such licences or at least for 
co-ordination between Member States to allow such trans-European 
infrastructure or services to enter into service at the same time throughout the 
Union. 
The need to avoid line of business restrictions 
There is full support for transparent and appropriate accounting procedures, 
though some comments from those attempting to enter mobile or infrastructure 
markets alongside the incumbent believed that full structural separation might be 
necessary. Nevertheless a majority of comments supported the Green Paper in 
rejecting automatic "line of business restrictions". 
Sharing of essential resources 
There is general agreement on the important role of access to common resources 
such as rights of way, frequencies and numbering. 
However, there is no consensus in favour of mandatory duct and infrastructure 
sharing, although the possibility of voluntary sharing for reasons of 
environmental policy was accepted. At the same time some comments pointed to 
the need to ensure sufficient access to rights of way / shared use of infrastructure, 
in order to prevent environmental considerations justifying a limitation on the 
number of service licences granted. 
There were differing views concerning the price at which such resources should 
be made available, even if a principle of non-discrimination were applied. 
Whilst comments from the telecommunications sector overwhelmingly supported 
a re-distribution of frequencies between telecommunications, broadcasting and 
defence uses, this was not supported by broadcasters nor by all national 
regulatory authorities. 
The possibility of allowing experimental shared use of frequencies was suggested. 
25 
PRIORITIES FOR ACTION 
The consultation on this Green Paper has necessarily extended beyond the pure issue 
of infrastructure liberalisation to encompass the overall regulatory environment to 
achieve the full liberalisation of telecommunications services and networks by 1 
January 1998. On the basis of the comments and the consensus achieved, the 
Commission can now identify the following priorities in preparing the measures to 
ensure liberalisation of telecommunications infrastructure and services, and in 
particular, those measures which the Commission is required to table before 1 
January 199617. 
The approach chosen focuses on those issues which have a clear European dimension 
and for which solutions are essential in order to ensure conformance with the Treaty 
competition rules and the completion of the internal market for telecommunications 
infrastructure and services. In particular, the approach favoured seeks to ensure that 
regulation at both a European and national level is limited to the minimum necessary 
to achieve the desired objectives and that regulatory responsibilities are carried out at 
the most effective and appropriate level. This approach is consistent with the 
Commission's responsibilities under the Treaty, and at the same time takes full 
account of the principles of subsidiarity and proportionality. 
V.l Liberalisation schedule 
The consultation has shown strong support for the linkage of full liberalisation of 
infrastructure to the full liberalisation of telecommunications services in 1998, subject 
to possible transitional periods18. 
At the same time, the Commission attaches considerable weight to the calls from 
industry, business, service providers, users, and from mobile network operators and 
some fixed network operators with experience of competitive markets, for faster but 
limited infrastructure liberalisation now. These calls are in line with the proposals in 
the Green Paper for a more rapid approach to liberalisation in certain areas, which 
flow from an analysis of current infrastructure monopolies in the light of the Treaty's 
competition rules and the rules promoting the free movement of services. 
This approach was widely recognised in the consultation as being central to Europe's 
strategy for growth and employment, as well as allowing cheaper communications 
and stimulating innovation which will keep Europe at the forefront of the emerging 
Information Society. 
17 See Council Resolution of 22nd July 1993 on the review of the situation in the telecommimications sector and 
the need for further development in that market (93/C 213/01 ; OJ 213/1, 6 August 1993). 
18 Subject to possible transitional periods if requested of up to 5 years for Greece, Ireland, Portugal and Spain; as 
well as a possible 2 years for very small networks, where justified, (i.e. Luxembourg). 
26 
Commission studies and experience in markets which are already open to 
competition suggest that the risks of such limited competition destablising the 
delivery of universal service would be less than some incumbent operators and 
national regulators currently believe. In particular, the Commission believes that 
limited liberalisation is possible without the need for as comprehensive regulatory 
safeguards to be in place as those required in the context of general infrastructure 
liberalisation. Any regulatory safeguards required in the context of liberalisation 
should be proportionate to the liberalisation measures in question. 
The Commission will therefore, in line with its obligations under the Treaty and the 
general policy objective of the Union, propose legislation before the end of the year 
to extend the existing framework for services liberalisation to provide for the fiill 
liberalisation of telecommunications infrastructure and services by 1 January 1998 at 
the latest. 
This will ensure that after 1 January 1998, subject to the possible transitional periods 
referred to above, all exclusive and special rights over telecommunications 
infrastructure and telecommunications services in the European Union both within 
and between Member States (including restrictions on the direct interconnection of 
networks for the delivery of voice telephony services to the public) will be removed. 
It will also ensure that from that date mobile network operators should be able to 
obtain licences for the provision of public voice telephony services over the fixed 
network and that fixed network operators will be able to use wireless technologies 
within the provision of their services, subject to the availability of the necessary 
frequency spectrum and to compatibility with the Treaty competition rules. 
As regards more limited liberalisation in advance of 1998 for telecommunications 
services which are currently open to competition, measures could be taken providing 
that appropriate regulatory safeguards are in place. It is against this criterion that the 
Commission will assess any action in this area. 
With regard to the use of cable television networks for the provision of liberalised 
telecommunications services, the Commission in its assessment came to the 
conclusion that the current regulatory framework provides the necessary safeguards. 
The Commission therefore put forward on 21 December 1994 a draft amendment to 
Directive 90/388/EEC^, to include within its scope the provision of 
telecommunications services over cable television networks. 
With regard to the use of own or third party infrastructure for the internal links 
within mobile communications networks the existing regulatory framework also 
seems to provide sufficient safeguards, if the situation in countries with less 
developed networks is duly taken into account. The Commission will therefore 
propose an appropriate amendment to Directive 90/388/EEC concerning mobile and 
personal communications. 
19 In this context, the Commission has currently proposed an amendment to Directive 90/388/EEC to allow the use 
of cable television networks for the delivery of liberalised telecommunications services, OJ. C76, 28.3.95 . 
27 
As regards the liberalisation of other alternative infrastructures the situation appears 
to be less clear and has to be investigated further by the Commission. However, the 
Commission encourages, in particular, the use of such infrastructure either within a 
framework to be provided by Community law or within the scope of existing 
possibilities provided by national regulatory regimes, for the pilot and other 
demonstration projects foreseen in the Information Society. 
V.2 Establishing a regulatory framework at an EU level for universal service in the area of 
telecommunications 
This should address, in particular: 
V. 2.1 The scope, cost and funding of universal service 
Measures to liberalise telecommunications by 1 January 1998 will be accompanied by 
appropriate harmonisation measures designed to safeguard and ensure the 
development of universal service, in keeping with the policy followed by Council and 
European Parliament since 1990. 
In particular, the measures will ensure that any financial burden associated with the 
requirement on one or more operators at a national level to provide a public voice 
telephony service to all those reasonably requesting it can be properly assessed and 
shared out at a national level on a fair, efficient and equitable basis. 
The rules with respect to scope and the principles pertaining to costing and sharing 
any uneconomic burden of the basic universal service requirement will be dealt with 
in the context of Open Network Provision and Voice Telephony and in the proposed 
framework for interconnection to public telecommunications networks and 
telecommunications services. 
V.2.2 The scope of universal service 
It is clear from the consultation that the concept of universal service encompasses 
two distinct elements. 
Firstly, it represents a broad political concept concerning a range of common 
telecommunications services (such as voice telephony, facsimile services and data 
transmission services) which Member States want to see widely available throughout 
their territory. In many of these cases, the issue of the cost of such services and 
ensuring their availability can be left entirely to market forces. This broad concept of 
universally available services will clearly vary from Member State to Member State 
to reflect different political priorities. It is important to stress that economic and 
social cohesion is a political priority of the Union. In this context, universal service 
is an evolving concept and, in the light of technical and market development 
(including customer needs), the scope of universal service will be kept under 
consistent and continuing review. 
Secondly, from a regulatory perspective, some of these services are so important that 
regulatory intervention at an appropriate level may be required in order to guarantee 
their universal availability and/or their affordability. This gives rise to "universal 
service obligations" in respect of two different aspects of the universal service 
concept, namely : 
28 
• the provision of certain services at affordable prices for every citizen, including 
those on low incomes (i.e. the provision of a basic voice telephony service). 
Here an element of obligation is required in relation to those elements within the 
broad group of universal service which an operator would not voluntarily provide 
to particular customers or customer groups in particular areas because of the 
costs involved. (In particular, the risk of market failure results, for example, 
from regulatory constraints requiring tariffs to be geographically averaged or 
limiting the ability of operators to recover the full cost of the service from the 
end customer). 
It is this requirement for affordability which may mean that certain services give 
rise to a "financial burden" for some operators to which all market players may be 
required to make a fair contribution; and 
• additionally, the provision of services (for example, the minimum set of leased 
lines20) throughout a Member State's territory, even though the lines themselves 
are priced according to cost-oriented tariffs. 
In the case of leased lines, the availability of a minimum set is crucial to the take 
off of liberalised telecommunications services throughout the Union (including 
the inclusion of companies located in remoter parts of the Union within private 
and closed user group networks). 
However, the ability of infrastructure providers to cover the costs of provision 
means that these obligations do not represent a burden for the operator(s) 
providing them. 
The Consultation has confirmed the need to have common methodology to costing 
universal service. It has also confirmed that the Commission's proposal for a 
Directive on the application of open network provision to voice telephony is the 
appropriate basis for defining those elements of universal service which may give rise 
to a "burden" and which should in such cases be fairly shared amongst market 
participants, either through financial contributions to the provision of universal 
service or through the direct provision of such service elements themselves. 
The Commission proposal for a Directive on the application of open network 
provision to voice telephony seeks to ensure that all users have access to voice 
telephony services under harmonised conditions of access and use. This will serve as 
the basis for calculating any "financial burden" associated with the provision of such 
service. 
At the current time and on the basis of the voice telephony proposal, the scope of 
universal service obligations for the purposes of calculating any "financial burden" 
associated with universal service would be limited to the following : 
• the basic voice telephony service, as identified in that proposal 
20 As required by Council Directive 92/44/EEC on the application of open network provision rules to leased lines, 
OJL165/27, 19.6.92 
29 
provision of access to the public telephone network at a rate of 2,400 bit/s, 
emergency (112) services 
provision of operator assistance 
directory information services 
the provision of public pay phones, and 
the provision of service under special terms and/or provision of special facilities 
to customers with disabilities. 
Examples of service elements whose cost could not normally be shared amongst all 
market players includes, but is not limited to : 
• the provision of certain advanced voice telephony features21, 
• the provision of ISDN access for voice telephony customers; and 
• the recovery of the costs of non-telecommunications-related obligations imposed 
on operators or service providers. (These would include public service 
obligations relating to the financing of research & development or educational 
activities, or obligations relating to national security or defence). 
At the same time this narrow definition of universal service obligations does not 
mean that Member States or operators may or will not go beyond this in terms of the 
service that is offered. Indeed it can be expected that this core of universal service 
will act as an incentive for other operators and service providers to seek to improve 
upon, in terms of service quality and price. 
V.2.3 The costing of universal service 
The proposed framework for interconnection to public telecommunications networks 
and services will set out the principles for calculating any cost associated with the 
imposition of universal service obligations on an operator or operators at a national 
level. The basic principle will be to calculate the net cost imposed on the operator or 
operators with and without the universal service obligations. 
National Regulatory Authorities will be required to put in place the appropriate 
mechanisms to undertake such a calculation. This, implies the need, in particular, to 
calculate the cost of providing telephone service to any unprofitable areas and to any 
unprofitable customers in other areas. The process should be transparent and also 
subject to prior approval under competition rules. 
V.2.4 Future funding of universal service 
Based on the consultations it has undertaken, the Commission believes that the 
fundamental requirement to ensure the maintenance and development of universal 
service in a competitive environment is a common approach on scope and costing. 
21 The position will vary between Member States, with the costs of such advanced features being separately 
charged to end users in some cases. 
30 
With respect to the funding of universal service at a national level, the Commission 
believes that it may be possible for approaches to national funding schemes to vary 
from one Member State to another, without creating significant barriers within the 
internal market for telecommunications infrastructure or services and without 
distorting competition. 
• First of all, it may be that at a national level, the calculated cost of universal 
service obligations is zero or negligible in which case there will be no need to set 
up any specific funding mechanism. 
• Secondly, the Commission believes that even within the two general approaches 
outlined in the Green Paper, (i.e. universal service funds or access charges), there 
are a number of ways in which national funding schemes, could be implemented, 
whilst respecting the principles of transparency, non-discrimination and 
proportionality and ensuring a system which can promote more efficient 
operation. This approach to the practical aspects of national funding schemes is 
consistent with the principle of subsidiarity. 
Nonetheless, National Regulatory Authorities will be obliged to ensure publication 
of the details of the funding mechanisms being used, to notify them to the 
Commission in advance of their implementation in order to allow for the 
assessment of their conformity with Community law, and in particular, with the 
Treaty competition rules. The NRAs must monitor such financing mechanisms 
appropriately. 
At the same time the Commission notes the consensus within the consultation that 
any financing mechanisms must be transparent, proportional and non­
discriminatory. It also notes the overall preference within most Member States 
for Universal Service Fund approaches. Any mechanism must also ensure that the 
contributions to universal service are shared fairly amongst market players, (even 
if those players are not themselves subject to obligations to provide universal 
service). Furthermore, decisions to implement such funds must not be used as a 
reason to delay competition, particularly, as access charge-type regimes could be 
used as an interim measure pending adoption and implementation of appropriate 
national funds. 
V.3 Establishing a regulatory framework at an EU level for open access and interconnection 
to public telecommunications networks and services 
The framework at a Union level will also contain appropriate harmonisation 
measures designed to guarantee open access to public telecommunications 
infrastructure and services for both users and new market entrants. Such a 
framework will complement the application of general competition rules to 
interconnection arrangements. 
V.3.1. The ONP framework 
In a liberalised environment, the emphasis will be on voluntary compliance to 
harmonised conditions for access and use of telecommunications networks and 
services.. In three areas however, - voice telephony, leased lines and interconnection 
- the need for binding conditions is foreseen, in the form of specific ONP Directives. 
31 
Previously the ONP framework applied in general to telecommunications 
organisations who had special and exclusive rights for the provision of certain public 
telecommunications networks and/or services. After 1998 many organisations can be 
expected to be authorised to provide telecommunications networks and services to 
the public, and individual ONP measures will need to be more specific in identifying 
those entities within their scope. A flexible approach will be required, so that it is 
possible that: 
• the scope of application of the ONP rules may vary from one directive to 
another; 
• different provisions within a single directive may impose obligations which 
apply to different categories of organisation offering telecommunications 
networks and/or services to the public, and 
• obligations be placed on a Member State, whilst leaving it to that Member 
State to determine how and by whom those obligations are met. 
The ONP Framework Directive will therefore be revised and updated, in particular 
with respect to its procedural provisions. Details of other ONP measures and their 
scope of application are given below. 
V. 3.2. Interconnection 
Harmonisation of the rules for interconnection to public telecommunications 
networks and services is a priority. New market entrants need access to existing 
public telecommunications networks and services under conditions that guarantee 
non-discrimination, equality of access and transparency. 
The Commission attaches considerable weight to the concerns of industry, users, 
potential competitors and Service providers of the need for uniform application of 
any interconnection framework; for its effective enforcement by national regulatory 
authorities and for the need for the regime to be in place by 1 January 1998. For 
these reasons, the Commission intends to present a proposal for a Directive on 
Interconnection to public telecommunications networks and services in the context 
of open network provision, which will address the areas of: 
• rights and obligations of service providers and network operators with regard 
to interconnection, in accordance with the principle of proportionality 
The environment envisaged is one where any organisation has the right to request 
interconnection, but where some organisations have stronger obligations than others to 
accept interconnection requests. These stronger requirements will be linked, in 
particular, to the need to ensure European-wide offerings for leased lines and voice 
telephony . 
• principles for interconnection charges and accounting systems, including 
universal service contributions 
The proposed Directive will provide the legislative basis for the proposals on financing 
universal service as outlined in Section V.2.1 above 
32 
• transparency of agreements 
Interconnection agreements should be made available to the national regulatory 
authority and, with the exception of those clauses containing confidential technical or 
commercial information, should normally be published, 
• role of the National regulatory authority 
At a national level Member States will be required to set up independent procedures 
for dispute resolution. At the European level, a dispute resolution procedure will be 
proposed based on the conciliation procedure already in operation under the ONP 
leased lines Directive 92/44/EEC. 
V. 3.3. Open access to voice telephony and leased lines 
From the consultation it is clear that two mandatory elements of the current ONP 
framework should remain in place after 1998. 
These are, firstly, the obligation on Member States to ensure the provision 
throughout their territory of a basic minimum voice telephony service for the general 
public at an affordable price. The draft ONP voice telephony Directive constitutes 
the current core of universal telephone service in the Union. 
Secondly, in order to allow competitive service provision to establish itself, leased 
line capacity will continue to be important. The provision of a minimum set of leased 
lines should continue to be mandated until competition is effectively established and 
market forces can be shown to replace the need for mandatory regulations. At the 
same time these mandated offering will have to evolve in line with technological 
development and market demand. 
The Commission will make proposals for the future re-focusing of the existing ONP 
Directives for the post-1998 environment, in a way that will require Member States 
to ensure that all users have access to leased lines and voice telephony services from 
at least one operator, under harmonised conditions of access and use. This 
harmonised offering is likely to act as a benchmark in terms of quality, price and 
service levels which other operators and service providers will seek to better. 
The decision as to which organisation(s) will carry this obligation-to-provide will be 
taken at the Member States' level. Application of the principle of proportionality will 
ensure that the obligation is placed on those organisations best able to fulfil it. Any 
cost burden in relation to voice telephony will be shared by other market players in 
accordance with the principles set out above for financing universal service. 
V. 3.4. Harmonisation according to voluntary standards 
The creation of the internal market for telecommunications services and the priority 
attached to interconnection and interoperability of national networks in the context 
of TENs, means that harmonisation of conditions for access to and use of public 
telecommunications networks and services for users also remains a priority. In most 
cases it will be sufficient to rely on voluntary implementation of recommended 
standards by the market players. Suitable interface standards will be published from 
time to time in the Official Journal of the European Communities under the ONP 
Reference List of Standards. Provisions already exist in the ONP Framework 
33 
Directive 90/387/EEC to make the implementation of certain standards mandatory in 
justified cases. 
V.3.5. General 
No other specific measures in the context of open network provision are envisaged.. 
Member States are encouraged to include the ONP principles of non-discrimination, 
transparency and equality of access in licences as appropriate, and, in particular in 
licences which grant organisations rights to provide telecommunications 
infrastructure, but no specific ONP measures on infrastructure are proposed. 
Proposals for an Interconnection Directive, and for amendments to the existing ONP 
Directives to adapt those provisions which may be inappropriate in a competitive 
environment, will be prepared by the Commission by 1 January 1996. 
V.4 Licensing in the field of telecommunications 
Licenses in the field of telecommunications implicitly restrict the freedom to provide 
services and can distort market structures. At the same time, licences can, within the 
limits set by the Treaty and, in particular, the competition rules as specified in 
Directive 90/388/EEC (as amended), provide an appropriate mechanism to ensure 
the achievement of aims such as the development of universal service or the 
establishment of conditions promoting the creation of a fair competitive environment. 
The imposition of licensing procedures, together with the conditions attached to 
licences must therefore be justified under the Treaty and proportional to the 
objectives which the licensing procedures seek to achieve. This means that licensing 
procedures and the conditions attached to licences must, inter alia, reflect the extent 
of the rights and obligations which the licence will convey. This is likely to be 
reflected in different classes and types of licences within national licensing regimes. 
This leads the Commission to confirm a number of positions. 
V.4.1. The justification for limiting the number of licences granted and the range of conditions 
which may attached to licences 
A consensus has emerged from the consultation that the sole reason for limiting the 
grant of licences for the provision of telecommunications infrastructure and services 
should be the existence of physical limitations, imposed by the lack of necessary 
frequency spectrum. This is one of the essential requirements recognised according 
to Community law22. Other essential requirements found within the Union's 
regulatory framework apply to the telecommunications services provided over 
networks rather than to the infrastructure within a network. Where Member States 
limit the number of licences because of the availability of frequency spectrum, such 
decisions should be subject to periodic review, in particular, to take account of 
advances in technology 
22 As set out in Article 4(e) of Council Directive 91/263/EEC on the approximation of the laws of Member States 
concerning telecommunications terminal equipment, including the mutual recognition of their conformity. 
34 
With regard to the extension of the essential requirements to include restrictions 
based on environmental policy (such as the availability of rights of way), the 
Commission from the comments received in the consultation accepts that rights of 
way do not constitute a physical limitation on the possible grant of infrastructure 
licences and therefore cannot be used to justify a priori restrictions on licence 
numbers. This is without prejudice to individual decisions taken by relevant national, 
regional or local authorities limiting the exercise in individual cases of those rights. 
At the same time, in granting such rights of way and related powers Member States 
must ensure that they are granted in a non-discriminatory manner and that the rights 
are exercised under the same conditions by both the incumbent operator and any new 
entrants. 
No regulatory limitations should be placed on the number of service providers. They 
should not be subject to individual licences. Where the number of licences for 
infrastructure in a Member State has been limited a priori for physical reasons or 
where issues of environmental and planning policy arise, for example, with regard to 
the exercise of individual rights of way, voluntary sharing of infrastructure shall be 
on the basis of commercially negotiated agreements and subject to regulatory 
oversight. 
Whilst a complete consensus on the issue of whether the number of licences can be 
restricted on the basis of public service specifications in the form of trade regulations 
did not emerge, the Commission supports the clear trend in the comments that the 
issues which "trade regulations" seek to address are issues which can tackled within 
the terms of a licence or during the selection procedure, rather than a reason 
justifying an a priori limitation of the number of licences granted. 
Finally, there was general support for the two categories of conditions which form 
the basis for a common European approach to licensing: namely, the essential 
requirements (mentioned above) and public service specifications in the form of trade 
regulations (which might be applied in addition to essential requirements in the case 
of the provision of public telecommunications services). 
Member States would remain free to attach additional conditions outside this 
framework only if such restrictions could be justified according to the Treaty and are 
proportional to the objectives sought.. 
V.4.2 The provision of telecommunications services to the public may justify more comprehensive 
supervision of operators and service providers 
The provision of public telecommunications services to the public is likely to justify 
to greater $upervision and hence a more comprehensive licensing regime23 (based on 
both essential requirements and public service specifications in the form of trade 
regulations) than the provision of private (closed) telecommunications services 
(where public service specifications in the form of trade regulations do not apply). 
Such conditions could be applied either through individual or class licences (See 
below). The approach chosen by the national regulatory authority should impose the 
least limiting solution. 
23 In this context, it will be recalled that the political agreement on the removal of monopolies over the provision of 
both voice telephony services to the public and the underlying infrastructure for its provision does not mean that 
35 
In this context, it should be noted that the commercial provision of transmission 
capacity is considered to be a service, but not necessarily a telecommunications 
service provided to the public and hence only subject to the imposition of conditions 
linked to essential requirements24. Such resale activities would therefore normally be 
subject to only limited conditions based on essential requirements, even if the 
services provided over that transmission capacity were provided to the public and 
hence more strongly supervised. 
With regard to essential requirements the proposal in the Green Paper to extend their 
scope in relation to infrastructure to include conditions justified on the basis of 
environmental policy was broadly accepted. At the same time, it should be 
emphasised that the essential requirements identified in Community law are a list of 
restrictions which may be imposed by Member States, rather than restrictions or 
conditions which must be imposed. In every situation the imposition of such 
conditions must be proportional to the objective which it is sought to achieve. 
V. 4.3. The justification for requiring individual licences 
The shift towards a competitive environment for telecommunications requires a light 
and flexible regulatory approach. With regard to authorisations, the Commission 
believes that national regulatory authorities should give preference to general 
licensing regimes through declaration procedures or class licences. Nevertheless 
from the consultation, it is clear that individual licences may be justifiable in two 
situations i.e. where the licence holder is to be subject to obligations, or to be given 
certain rights, relating to : 
• the provision of universal service 
• the rights to use specific radio frequencies; to build and operate its own 
infrastructure and/or to enjoy related rights of way or powers of compulsory 
purchase; to numbers. 
In each case the imposition of individual licences must be consistent with the 
principle of proportionality. Situations can also be envisaged where an operator may 
itself choose to be subject to an individual licence (for example, where it seeks to 
introduce an innovative service or technology, or where it wishes to become a 
universal service provider and enjoy the additional rights which such operators may 
be granted in order to enable to meet their universal service obligations e.g. extensive 
rights of way). 
Conversely, general authorisations or class licences should be the appropriate 
mechanism in a competitive environment for authorising telecommunications services 
provided on a simple resale basis. 
the task of general economic interest (i.e. the provision of universal service) in the sense of Article 90(2) has 
been removed, rather that after 1998 the service can be guarantied by a more proportional approach. The use of 
licensing conditions in the context of the provision of services to the public will be one means in assisting this 
process. 
24 In many cases, such infrastructure will be provided using existing rights of way and so may not require an 
individual licence. That would certainly be the case where such infrastructure is self-provided for own use by 
the owner of the infrastructure within its corporate network. 
36 
The Commission will propose before the end of 1995 amendments to Directive 
90/388/EEC25 in order to establish the grounds which may be used to limit the 
number of licenses, as well as to define categories of conditions which may be 
attached to licences, for the provision of public and private telecommunications 
services. 
The Commission will also propose amendments to its current approach to licensing26 
to extend their scope to establish a common framework for licensing award 
procedures and the selection criteria used in such procedures, as well as promoting 
its approach in the field of mutual recognition of licenses. 
Initiatives are underway with regard to the co-ordinated national licensing of 
satellite-based Personal Communications services (PCS) in Europe, in order to allow 
such services to be provided throughout Europe at the earliest possible opportunity, 
with the opening of the licensing process by 1 January 1996 at the latest. 
V.5 Ensuring a fair competitive environment 
It is clear from the consultation that there is a consensus that the balance proposed in 
the Green Paper between the application of general competition law and sector-
specific regulation has to be maintained. At the same time, considerable weight is 
attached to those rules and the future development of the regulatory framework is 
likely to see a continuing reduction in direct regulatory intervention as the full effects 
of competition are felt. 
The consultation confirmed that Directive 90/388/EEC was and will continue to be 
at the core of telecommunications liberalisation in Europe. Based on the comments 
received, it will be necessary to rapidly and firmly fix the envisaged framework, 
including in particular the liberalisation dates foreseen. The Directive will have to be 
extended appropriately with a view to full liberalisation by 1998. 
As regards the application of the competition rules, strong support for a strong role 
for these rules was shown during the consultation. The Commission will take 
account of this support by ensuring the full application of the competition rules, in 
particular as regards: 
the examination of interconnection agreements, 
the conditions for access of competing infrastructure providers and for service 
provision, 
25 Commission Directive of 28th June 1990 on competition in the market for telecommunications services 
(90/388/EEC ; OJ L192,24.7.90) 
26 Amended proposal for a European Parliament and Council Directive on the mutual recognition of licences and 
other national authorisations for telecommunications services, COM(94) 41 final, 22.3.94, and Proposal for a 
European Parliament and Council Directive on a policy for the mutual recognition of licences and other national 
authorisations for the provision of satellite network services and/or satellite communications services, COM(93) 
652,4.1.94 
37 
schemes established for financing universal service, 
access to rights of way, 
cross-ownership of different networks and joint provision of network and 
services, and 
the emergence of global and regional partnerships and alliances. 
The Commission will also take into account the calls for more predictability, in 
particular as regards access and interconnection. In this respect, the appropriate 
measures to give further effect to the principles set out in Articles 85 and 86 will 
have to be assessed, in order to establish a more predictable environment if required. 
With regard to barriers to market entry the Commission will consider the lifting of 
constraints on the basis of the competitive situation, in particular with regard to 
infrastructure provision. 
V.6 Access and availability for service providers and operators to essential resources, 
namely: 
V.6.1. Rights of Way 
Member States should take necessary measures to remove existing restrictions on the 
sharing of infrastructure. The voluntary sharing of infrastructure, rights of way, 
ducts, etc. should be a matter of commercial agreement and may be charged on a 
commercial basis. At the same time, the Commission recognises the potentially 
significant cost savings and the reduced environmental impact where sharing of 
infrastructure is promoted. One objective at a national level may be to minimise 
unnecessary duplication of infrastructure, though any such approach must be 
compatible with the Treaty competition rules. 
In order to overcome the effects of planning or environmental decisions, 
consideration should be given by Member States to ensuring in class or individual 
licences that there are no restrictions preventing the sharing of rights of way or 
linked facilities (ducts, poles, etc.) on a commercial basis and subject to regulatory 
oversight and technical feasibility. 
V. 6.2. Frequencies 
Access to frequency spectrum is seen as increasingly important to the successful take 
off of a competitive market, and in particular, in allowing new cost-effective 
technologies to play a full role in the delivery of universal services within the Union. 
In order to support current market trends the Commission will continue-to support 
the efforts taken within the CEPT/ERC to co-ordinate frequency allocations to 
promote pan-European operation. In this context, the formulation of appropriate 
decisions to support the rapid introduction of Satellite-based personal 
communications services in Europe is a particular priority. Action to investigate the 
possible reallocation of frequencies between telecommunications, defence and 
broadcasting uses will also be encouraged. 
38 
V.6.2. Numbering 
It is clear from the consultation that numbering is seen as a further key resource for 
the establishment of a competitive environment. A number of the basic principles set 
out in the Green Paper have been confirmed, namely: 
• the need for numbering policy and the allocation of numbers -to be the 
responsibility of an independent authority rather than the operator; 
• the need for numbers to be allocated in a non-discriminatory manner with a view 
to promoting equal access for new market entrants, and 
• the need for a rapid implementation of number portability, which would allow 
customers at a specific location to retain their numbers when switching between 
different operators or service providers. In the longer term, the aim should be to 
allow the porting of numbers for customers between different locations within a 
Member State. 
The consultation also expressed concern that a full assessment of the impact in terms 
of prices and technology must be made in formulating any overall approach to 
numbering in Europe for a liberalised environment after 1998. 
V.6.4. directories 
Access to directory information and directory services have been highlighted as an 
essential resource for the creation of effective competition and as a basic right for 
consumers. The Commission is preparing a Communication on these issues which it 
expects to publish during the second half of 1995. 
39 
V.7 Employment, the social and societal impact 
It is clear from the Consultation that a competitive telecommunications environment 
presents challenges in addressing the trend over the last decade of a reduction in 
employment within the traditional telecommunications operators. At the same time 
liberalisation will offer substantial benefits for the whole of the European economy, 
which should in turn enhance Europe's competitiveness, stimulate growth and create 
new jobs. 
Much of the loss of direct employment within public operators is a direct result of 
technological advances and the efficiency gains flowing from this. The Commission 
believes that this is an argument for reinforcing the pace of modernisation and 
liberalisation, so as to exploit the wide benefits that it can bring and at the same time, 
for effectively managing the adjustment issues involved. This belief is in line with 
results from recent OECD studies27. 
At the same time, the Commission believes accompanying measures - beyond the 
purely regulatory scope of this Communication - should be undertaken to support the 
transition from a monopoly to competitive telecommunications environment - in the 
same way that resources have been made available in other sectors. Such action will 
be taken primarily at a national level, although Community structures, such as the 
European Social Fund and specific projects, such as those identified below in the 
field of education and training can also play a role. In particular, the Union, in line 
with on-going initiatives, should assist in the adaptation, re-training and re 
deployment of those whose traditional activities are likely to disappear within the 
emerging Information Society. The development of policies in this area should be 
able to build on two separate sets of initiatives: 
• Monitoring the changes in employment in the telecommunications sector, on 
the basis of on-going studies and to prepare appropriate proposals in the light 
of the trends identified. 
27 According to the OECD studies, the rapidity of change in the telecommunications sector is leading to 
performance gaps between those countries which have already liberalised from those who have not yet done so. 
The traditional source of direct employment, that of the main public operator, is declining for a number of 
reasons, but mostly linked to technological improvements. 
It may seem paradoxical that the large operators which are laying the foundations for the Information Society are 
decreasing employment. However, many sectors of the economy are becoming increasingly dependent on 
telecommunications and the traditional measurement methods are not capturing the extent of new 
telecommunications related employment. 
The new technologies are permitting significant improvements in productivity. Slowing down the pace of 
modernisation in the traditional telecommunications sector may safeguard some employment temporarily, but 
only at the cost of blocking the generation of new employment elsewhere in the economy, particularly in the new 
information or content related sectors, which are more employment intensive. 
Moreover, not passing on these productivity improvements increases communications costs for all users and 
raises the cost of providing universal service. The OECD therefore argues that the pace of liberalisation should 
be accelerated. 
40 
• Study the current evolution way we work, the organisation of work and the 
need for adaptation in the light of new technologies of national employment 
and social legislation in the Member States. 
Work28 in both areas shall be closely co-ordinated with the social partners. This 
process of consultation and discussion is greatly strengthened within the Union by 
the creation of the Information Society Forum, first called for in the Bangemann 
Group Report in 1994, and of the High Level Group of Social Experts, set up under 
the aegis of Commissioner Flynn. Both groups will provide an important input into 
the discussion of the broader social and societal aspects of the Information Society, 
with the Social Expert Group having a specific mandate to address the impact and 
changing nature of employment in the emerging telecommunications environment, as 
well as consideration of issues linked to education and training, healthcare and 
cohesion within the Union. 
At the same time, it should be noted that significant activity has been underway for a 
number of years at a European level to support the use of new technologies and 
services in areas, such as new education and training. The completion of the process 
of liberalisation is likely to have a major impact on ensuring widespread and 
affordable access to such activities. 
In the field of education and training, the Commission has supported the 
development of open and distance learning (ODL), a method which is able to exploit 
the potential offered by advanced telecommunications. In addition to its publication 
of a Report29 and a Memorandum30 on Open and Distance Learning, the Commission 
has encouraged work at a European level in favour of this method through a range of 
Community Programmes31. With regard to the promotion of education and training 
using new technologies the new Community Education and Vocational Training 
Programmes (SOCRATES and LEONARDO) both offer opportunities for the 
development and use of ODL at a European level and further possibilities are offered 
within the Community's Fourth Framework Programme for Research and 
Development. 
The Commission has also provided financial or organisational support to reflections 
amongst policy makers, providers and users of ODL concerning the development of 
such methods through its supports for meetings, conferences and seminars on this 
subject. In addition as part of the follow up to the Commission's Information Society 
Action Plan, the Commission established at the beginning of 1995, a Task Force for 
28 On-going or completed Studies include studies in relation to : the general economic impact of the Information 
Society, the future organisation of work; the examination of employment trends related to the use of advanced 
communications and also of the impact on employment of liberalisation in the telecommunications sector, the 
legal, practical and technical issues surrounding tele-working; the impact of the Information Society on regional 
development in the Union; the impact of telematics in urban areas; as well as studies examining"the impact of 
the Information Society and/or telecommunications in the areas of education and training and the environment. 
29 SEC(91 ) 897 final, 24 May 1991 
30 COM(91) 388 final, 12 December 1991 
31 Examples can be found within ERASMUS, COMETT, DELTA, EUROTECHNET, FORCE, LINGUA, 
TEMPUS, EUROFORM, NOW and HORIZON. 
41 
Multimedia Educational Software, to examine and report on the situation within 
Europe and outside on the production and use of new learning materials. 
V.8 The international agenda 
The Commission recognises a clear consensus that priority must be given to multi­
lateral solutions within the framework of the on-going WTO Negotiations on Basic 
Telecommunications in order to achieve the overall aim of comparable and effective 
access to third country markets, and, in particular, the lifting of ownership 
restrictions, for EU network operators and service providers. Such an approach was 
recognised as preferable to bi-lateral initiatives between individual Member States 
and third countries. 
The consultation has confirmed that until the results of the WTO negotiations are 
clear, it will remain important for the Union to reserve its right to maintain equivalent 
conditions to those currently prevailing in third country markets with regard to 
market entry or the licensing of non-EU or EEA nationals or companies controlled 
by such nationals. The objective of proposing such conditions would be to promote 
open markets in third countries for European network operators and service 
providers through negotiations. 
Additionally, on-going action to promote the emergence of common European 
positions in international fora dealing with numbering and frequency allocations will 
be continued. 
Account must also be taken of the global approach now being taken to a range of 
regulatory issues in the context of the discussions on the Information Society within 
the G7, where it is recognised that many nations are facing similar regulatory and 
societal challenges. After the successful Summit in Brussels in February, a range of 
projects have been agreed to assist this discussion and co-operation at an 
international level. In relation to four of the eleven projects agreed in Brussels, 
leadership is being taken by the Union. These concern projects (i) the drawing up of 
a global on-line, multimedia inventory of all projects and studies linked to the 
development of a global information society, (ii) global healthcare applications in the 
field of telemedicine, (iii) the global market place for SME's, linked in particular, to 
Electronic Data Interchange (EDI) and (iv) maritime information systems to enhance 
environmental protection and enhance industrial competitiveness. 
Further discussion at a global level and evaluation of projects will continue later this 
year at a meeting in Halifax, Canada, whilst at a Union level consideration is being 
given as to how best to involve those Union Member States not members of the G7. 
V.9 Towards the Information Society 
V. 9.1 Other aspects of the regulatory framework for the Information Society 
The consultation gave support to the need for continuing Union action in a number 
of neighbouring fields which will have a direct impact on the speed and success of 
the liberalisation process in Europe, and more generally will help to shape a 
42 
regulatory policy assisting the creation of the Information Society. Such a 
framework to be developed through coherent action at a national, Union and 
international level must be consistent with the principle of subsidiarity and must be 
flexible enough to meet the new and varied requirements which may emerge. Such a 
framework should ensure that new services, such as distance learning, tele-medicine, 
tele-shopping, leisure services and video on demand are included within its scope in 
order to assist in promoting the development of such services. In view of the 
uncertainties (economic, technological and social) affecting the development of new 
services, additional studies and broad consultation may be required before firm rules 
can be determined. 
In any event, the overall framework which will emerge with respect to other 
regulatory aspects of the Information Society must be firmly rooted in the basic 
principles of the Treaty with a view to the further establishment of the internal 
market. In addition to the areas specifically commented upon in the consultation (see 
below), work on creating this regulatory framework is underway through the 
preparation of : 
a Green Paper on commercial communications 
a Green Paper on the legal protection of encrypted signals 
the consultation underway on media ownership, and 
a Communication on the need for an internal market mechanism ensuring that 
new national proposals are transparent and comply with the principles of the 
internal market. 
With regard to the areas raised in the consultation: 
• Data protection and privacy 
The consultation indicated clear expectations from operators, service providers, 
users and residential consumers for rapid progress to be made on formulating 
common rules for data protection and privacy within the European Union. At the 
same time, emphasis was placed on the need for any framework to be proportional to 
the objectives sought and not to place a brake on either innovation or the 
development of global communications. 
In this context, the Commission believes that the urgent adoption of the pending 
proposals for both a general directive and a telecommunications-specific directive on 
data protection and privacy is now of prime importance. 
• The protection of Intellectual Property Rights 
Adequate protection of intellectual property was seen in the consultation as an 
essential prerequisite to attracting investment into Europe's Information Society and 
in providing a fair reward for innovation. The key concerns of the sector were that 
providers of both traditional telecommunications and new services and of content 
should be able to control adequately the distribution of their products in a digital 
environment. 
43 
In this context support was given to the Commission's proposed Database Directive, 
and at the same time it was felt that the existing framework of copyright law would 
be important in providing an appropriate protection regime for future digital works. 
The Commission will further examine these issues in its Green Paper on intellectual 
property rights in the Information Society. 
• Audio-visual Policy and Media Concentration 
The consultation supported the evolution and adaptation of policies in these areas to 
take account of the emerging telecommunications and communications 
environments. 
Whilst some comments stressed the desirability of a common approach to address 
competition concerns raised by vertical integration or the combination of partners 
from formerly discrete sectors of the economy, others have highlighted the unique 
issues raised by audio-visual policy. These go to the heart of the freedom of speech 
(both in a commercial and political sense) and the issue of plurality of sources of 
information. The Commission is responding to these concerns, inter alia, in the 
context of its Communication on Information Society Services : Building a 
regulatory framework of 17 March 1995, SEC(95) 444. 
V. 9.2 The future evolution of the regulatory framework 
The aim of consultation in the Green Paper on the future regulatory environment was 
not to provide answers to the question of its future evolution, but rather to initiate a 
debate. Moreover, the limited extent to which the audiovisual sector participated in 
the consultation process makes it difficult to draw conclusions concerning 
consequences of convergence for future regulatory approaches. Nevertheless, the 
Commission believes that certain principles can be identified which will assist the 
future discussions, firstly, with regard to the evolution of the regulatory environment 
for telecommunications and, secondly, with regard to the future regulatory approach 
within a converged Information Society. 
a) The future evolution of the telecommunications environment beyond 1998 
A number of factors emerged from the consultation to guide the future evolution of 
the regulatory environment for telecommunications : 
• Effective implementation of the future regulatory regime must be guarantied. 
This will increasingly depend on independent and effective regulation at an 
appropriate level. 
• There will be a continuing role for regulation even after 1998 in order to ensure 
that competition can effectively be established and to guarantee specific public 
interest goals, such as the delivery of universal service. At the same time, the 
regulatory environment must evolve to reflect the degree of competition, so that 
regulation can be relaxed over time in order to allow market forces to work. 
• As effective competition is established tariffs will increasingly be determined by 
market forces and reflect demand as well as cost conditions. Regulation can 
therefore focus more appropriately on areas where bottlenecks and market power 
44 
exist. To allow current operators to respond effectively to market forces, the 
process of tariff rebalancing should be accelerated. However, such rebalancing 
must go hand in hand with measures to promote a smooth transition for 
particular groups of users (such as those on low incomes or those with special 
needs) towards greater cost-orientation, particularly, in relation to access and the 
cost of local calls. To ensure adequate protection for these consumers, 
telecommunications operators must be able to offer flexible tariffs, for example, 
tariff schemes targeted at specific groups of users. Well designed price cap 
schemes can assist the rebalancing process, whilst ensuring adequate protection 
for consumers An appropriate monitoring system should be established during 
the transitional period. 
• All regulation at both a national and European level must be proportionate to the 
objective sought. In principle, as effective competition is established current 
asymmetries can be safely removed. The ultimate aim must be to create an 
environment in which any user can receive any service from any operator using 
any technology. 
• The sector can evolve without a priori structural separation, but subject to the 
application of Community law, in particular, the competition rules. 
b) The future evolution of a coherent regulatory framework for a converged 
environment 
Whilst the central focus of the Green Paper was on the telecommunications 
environment, comments did address the issue of the future approach to support the 
full development of a converged environment. In particular, stress was placed on the 
need for a coherent approach within both Union and national policies, rather than a 
series of sectoral policies presented to each of the other sectors as a "fait accompli". 
In this regard the basic approach of the Grreen Paper should be repeated of indicating 
that the aim is not to extend telecommunications regulation to the broadcasting or 
other sectors . At the same time, a number of basic principles can be identified from 
the comments which may assist in the formulation of a coherent regulatory approach 
to the friture debate on regulating for convergence: 
• A clear distinction can usefully be drawn between "transport" (the 
communications infrastructure over which the traditional telecommunications and 
new services and/or programming can be delivered) and "content". 
• Regulation should be technology neutral. 
• Safeguards may be needed in respect of both "transport" and "content", but the 
regulatory objectives are likely to be quite different. However, the aim must be 
for a coherent regulatory structure which can support the needs of Information 
Society. 
• A common approach may usefully evolve with regard to the services of public 
interest (universal service in the telecommunications sector and obligations to 
carry public broadcasting channels in the broadcasting sector) 
• Technological developments are blurring the differences between 
telecommunications and broadcasting, and artificial regulatory barriers should be 
45 
avoided. The Commission is examining these issues and will conduct extensive 
consultations in the audiovisual and related sectors, inter alia, in the context of a 
Green Paper on new audiovisual services. 
V.10 Implementation 
The consultation on the Infrastructure Green Paper has confirmed that a balance 
between the two complementary areas of harmonisation and liberalisation has to be 
maintained and that the future evolution of the regulatory environment has to 
continue to reflect this balance which has been at the heart of Community 
telecommunications policy to date. 
Given the tight timetable leading up to full liberalisation, it will be essential that the 
Commission, Council and European Parliament work closely and speedily to finalise 
the future regulatory framework. Responsibility will fall on the Member States and 
their national regulatory authorities in ensuring the timely transposition and 
implementation of that framework, as well as on the Commission in ensuring the 
achievement of the liberalisation process. 
As regards the possible creation of a specific European Regulatory Authority for 
telecommunications in relation to the area of licensing, in particular, for Trans-
European telecommunications networks and services, and in other regulatory areas, 
which was called for in a number of comments received, it is currently too early to 
draw definite conclusions. During the consultation it was suggested, that such an 
authority could be in charge of areas such as licensing harmonisation, numbering, 
frequencies, and interconnection. The Commission is currently carrying out studies 
on the issue which should provide a basis for further analysis of the issue at a later 
stage. 
Any assessment of this institutional issue should have as its decisive criterion whether 
the creation of such an authority would substantially increase the efficiency of the 
regulatory framework. 
46 
VI TIMETABLE FOR ACTION 
Council Resolutions 93/C213/02 and 94/C3 79/03 call on the Commission to prepare 
before 1 January 1996 proposals for the future regulatory framework for a liberalised 
telecommunications environment. In the light of the priorities identified above the 
following timetable for action, respecting the necessary balance between the 
complementary areas of liberalisation and harmonisation, can now be established. 
Date Liberalisation Harmonisation 
Before 31 Draft amendment of Commission Common Position on proposal for a 
July 1995 Directive 90/388/EEC with regard to European Parliament and Council Directive 
mobile and personal communications for ONP Voice Telephony 
Draft amendment of Commission 
Directive 90/388/EEC with regard to the 
full liberalisation of telecommunications 
infrastructure and services from 1 
January 1998 
Before 1 Adoption of amendment of Commission Adoption of the proposal for a European 
January 1996 Directive 90/388/EEC with regard to Parliament and Council Directive for ONP 
cable television networks Voice Telephony 
Adoption of amendment of Commission Proposal for amendment of Council 
Directive 90/388/EEC with regard to Directive 90/387/EEC (ONP framework 
mobile and personal communications directive) and of Council Directive 
92/44/EEC (ONP Leased Lines Directive) 
Adoption of amendment of Commission Proposal for a European Parliament and 
Directive 90/388/EEC with regard to the Council Directive on the application of the 
full liberalisation of telecommunications principle of open network provision to 
infrastructure and services from 1 interconnection to public 
January 1998 telecommunications networks and services 
If required, proposals for appropriate Adaptation of the current proposals in the 
measures to give further effect to the field of licensing 
principles set out in the Treaty (e.g. 
Articles 85 and 86), in particular, with 
regard to interconnection and access 
Proposal for a Council Decision of the co­
ordinated licensing of Satellite PCS services 
within the European Union. 
L 
47 
Date Liberalisation Harmonisation 
Communication to the European Parliament 
and the Council on the preparations for a 
liberalised telecommunications 
environment, addressing in particular the 
issue of universal service 
Communication to the European Parliament 
and the Council on directory information 
and directory services 
Before 1 Adoption of any measures required to Adoption by the European Parliament and 
January 1997 give further effect to the principles set Council of the measures set out above 
out in the Treaty, in particular in 
Articles 85 and 86 
Before 1 Completion of implementation by the Completion of implementation by the 
January 1998 Member States of the liberalisation Member States of the harmonisation 
measures set out above according to the measures set out above according to the 
timetables applicable timetables applicable 
48 
vn CONCLUSIONS 
The Consultation on Parts I and II of the Infrastructure Green Paper have allowed all 
those interested in the telecommunications sector to comment on the specific issue of 
infrastructure liberalisation, and more generally on the overall regulatory approach 
for networks and services which the Commission is proposing to assist the transition 
towards a fully liberalised telecommunications environment. This exercise-has 
continued the process of open consultation initiated by the 1992 Telecommunications 
Service Review and continued with the 1994 Green Paper on Mobile and Personal 
Communications. 
The Consultation has focused on the key regulatory issues of universal service, 
interconnection and licensing, giving a strong mandate to the urgent preparation of 
regulation in these areas. This Commission's proposals for such action have been set 
out above. 
In parallel to these regulatory priorities, the Commission will continue, in line with 
the views expressed in the consultation, the on-going work on the issues of 
employment and the social and societal transformation offered by the Information 
Society. From this perspective, the Green Paper and the consultation raised a range 
of issues going beyond télécoms regulation in a strict sense to touch on : 
• employment, 
• the social and societal implications of a competitive market for 
telecommunications services, and 
• the interplay between telecommunications policy and Union policies in 
neighbouring areas, such a intellectual property, audio-visual policy or data 
protection. 
In each case, the resolution of such issues within other areas of Community policy, 
and drawing, for example, on thé expertise provided by the Social Expert Group and 
other fora, is essential if public confidence in telecommunications liberalisation and 
the Information Society is to be maintained. 
The Commission believes that the Consultation has established a clear consensus 
around the main proposals put forward in the Green Paper and that therefore it has 
provided a major input to the measures which the Commission will table during the 
second half of this year. 
On the basis of the consultation which has emerged the Commission has prepared 
this report which it now transmits it to the European Parliament and Council. 
49 
ANNEX 
LIST OF CONTRIBUTORS TO THE CONSULTATION 
ON THE 1995 GREEN PAPER ON THE 
LIBERALISATION OF TELECOMMUNICATIONS 
INFRASTRUCTURE AND CABLE TELEVISION 
NETWORKS 
LIST OF HEARINGS 
Round Table for the Chairman of Network Operators : 10 
February 1995. 
54 fixed, mobile and alternative infrastructure companies were 
represented. 
General Consultation Meeting : 20 / 21 February 1995 
Approximately 125 organisations participated. 
Meeting with the Trade Unions : 14 March 1995 
Meeting with the Ad Hoc High Level Committee of National 
Regulatory Authorities : 16 March 1995 
LIST OF 
WRITTEN CONTRIBUTIONS 
National Regulatory Authorities 
Austrian National Regulatory Authorities (AU) 
Bundesministerium fur Post- und Telekommunikation (D) 
Department of Trade and Industry (UK) 
General Directorate of Posts and Telecommunications (ICE) 
Institute belge des services postaux et des télécommunications (BE) 
Instituto das Comunicaçôes de Portugal (PO) 
Ministerie van Verkeer en Waterstraat (NL) 
National Post and Telecom Agency (SW) 
Joint Committee of Telecommunications 
Associations 
Association of Private European Cable Operators 
Association of Finnish Telephone Companies (ATC) 
Association Française des Utilisateurs du Téléphone et des Télécommunications (AFUTT) 
Bureau Européen des Unions de Consommateurs 
The Cable Communications Association 
Conseil National du Patronat Français 
Danish Bankers Association 
Danish Chamber of Commerce 
Danish Insurance Association 
Deutsche Industrie und Handlestag 
Deutsche Postgewerkschaft 
ECTEL (the European Telecomminications and Professional Electronics Industry) 
European Public Telecommunications Network Operators Association (ETNO) 
EU Committee of the American Chamber of Commerce 
European Association of Advertising Agencies 
European Broadcasting Union 
European Council of Telecommunications Users Association (ECTUA) 
European Conference of Data Protection Commissioners 
European IT Industry Round Table (EITIRT) 
EVUA - European Virtual Private Network Users Association 
Federation Belges des Coopératives (FEBECOOP) 
Federation of the Electronics Industry (FEI) 
French Consumer and User Associations : (joint submission of ASSECO CFDT, AFOC, ANC, 
AFUTT, LEO, Lagrange, ORGECO, CSF, UNAF, CNAFAL, Familles Rurales, CNAPFS, CGI, 
UFCS, J. Lucas) 
Foreningen af Teknikumingengeni0rer 
Gewerkschaft der Post- und Fernmeldebediensteten 
IT Association of Denmark 
Mediaraad 
Motion Picture Association 
Office of the Unitd States Trade Representative 
UNICE 
Verband der Telekommunikationsnetz und Mehrwertdiensteanbieter (VTM) 
Vereniging van exploitanten en machtiginghouders van centrale antenne inrichtingen (VECAI) 
World Travel & Tourism Council 
Individual Organisations 
ARD 
Airtouch 
AT&T 
BBC 
Belgacom 
BellSouth Europe 
Bouygues Telecom 
British Telecom 
Cable & Wireless pic 
Cellnet 
Club informatique des grandes entreprises françaises 
CNI-Communications Network International GmbH 
Colin Long, Coudert Brothers 
Communication Media Services S.A. 
Compagnie Générale des Eaux 
Datsa Belgium 
Debitel 
Deutsche Sparkassen und Giroverband 
Deutsche Telekom 
Energis 
Enertel 
E-Plus Mobilfunk 
EURIM 
France Telecom 
Fundesco 
Hermes Europe Hitrail B.V. 
Kingston Communications 
Mannesmann Mobilfunk 
Mercury Communications 
Mercury one2one 
MFS Communications 
National Research and Development Centre for Welfare and Health (NAWH) (FIN) 
Netcologne GmbH 
Netcom GSM 
Nokia 
OTE 
Orange 
Ôsterreichischë Post 
Post et Télécommunications (LUX) 
Post & Telekom (AU) 
Portugal Telecom 
PTT Telecom 
Société Française du Radiotéléphone (SFR) 
Sonofon GSM 
Stet 
TeleDanmark 
Telecom Finland 
Telefonica 
Telekommunikations Gesellschaft fiir Betrieb 
und Dienstleistungen mbH 
Telenor Mobil 
fhyssen Telecoms AG 
Torch Telecom 
Telia 
Uriisource 
Dr Rolf H. Weber 
Prof.Dr. Paul J.J. Welfens 
ISSN 0254-1475 
COM(95) 158 final 
DOCUMENTS 
EN 15 
Catalogue number : CB-CO-95-195-EN-C 
ISBN 92-77-88655-2 
Office for Officiai Publications of the European Communities 
L-2985 Luxembourg