COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels,20.03.1996 
COM(%) 121 final 
95/0207 (COD) 
Amended proposal for a 
EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE 
on interconnection in telecommunications with regard to ensuring universal service 
and interoperability through application of the principles of Open Network 
Provision (ONP) 
(presented by the Commission pursuant to Article 189 a (2) 
of the EC-Treaty) 

EXPLANATORY MEMORANDUM 
The Commission hereby presents a modified proposal for a European Parliament 
and Council Directive on Interconnection in Telecommunications with regard to 
ensuring universal service and interoperability through application of the principles 
of Open Network Provision (ONP). The modified proposal incorporates those 
amendments proposed by the European Parliament at First Reading which were 
accepted by the Commission. 
1. Introduction 
a) Background 
The Commission adopted its proposal on 19.07.95, and it was formally transmitted 
to the EP and the Council on 12.09.951. 
The Economic and Social Committee gave a favourable Opinion on 28.02.962. The 
European Parliament adopted a favourable Resolution at its First Reading on 
14.02.96, and proposed 69 amendments to the Commission proposal3. 
b) Purpose of the Directive 
This Directive is an essential component of the regulatory framework for the future 
liberalised telecommunications sector, to be in place by 1.1.98. 
It will enable new market entrants to access existing business and residential 
customers, on a basis which will encourage increased investment and market growth 
in the telecommunications services sector, within a predictable and stable regulatory 
environment. At the same time, it will put in place safeguards to ensure 
interconnection and interoperability of networks and services so that users may 
increasingly benefit from the European wide provision of universal 
telecommunications services. 
The Directive lays down harmonized principles for interconnection to be 
implemented at a national level, under supervision of the national regulatory 
authorities, in accordance with the principle of subsidiarity. 
1 OJ C 313, 24.11.1995, p.7 
2 TRA/301 ,28.02.1996 
3 A4-0017/96, PV 14-02-96 
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2. EP amendments accepted by the Commission 
Of the 69 amendments adopted by the European Parliament at First Reading, the 
Commission accepted 28 in full, 13 in part, and 4 in principle (ie with some 
reformulation of the text), making a total of 45. 
Amendments accepted in full : 1, 2, 5, 8, 11, 14, 20, 22, 24, 28, 29, 33, 39, 40, 42, 
43, 44, 46, 47, 48, 52, 56, 58, 63, 64, 65, 66, 67 
Amendments accepted in part : 3, 4, 6, 9, 12, 15, 26, 32, 36, 37, 45, 49, 57, 
Amendments accepted in principle : 23, 51, 53, 68 
The Commission accepted those amendments which: 
- re-inforce the importance of ensuring universal service, and a single European 
telecommunications market; 
- concern number portability; 
- emphasise the need for protection of the environment; 
- increase transparency and ensure reasonable confidentiality; 
- call for increased coordination between national regulatory authorities and 
between national regulatory authorities and the Commission; 
- clarity the text in a manner consistent with the aims of the Directive; 
- call for an examination of the possibility of a European regulator)' authority for 
telecommunications, as part of the review of the Directive during 1999; 
- are consistent with other EU legislation. 
3. Amendments not accepted by the Commission 
The Commission has not accepted 24 of the 69 amendments proposed by the European 
Parliament. The reasons are given below, where the amendments are grouped into 11 
broad categories. 
Scope of the Directive 
(Amendments 13, 15 (part), 55) 
The Directive concerns interconnection to public telecommunications networks and 
services. Amendment 13 would restrict the scope of the Directive to interconnection 
between public networks of the same type, and is inconsistent with part of amendment 1 
On the other hand, amendment 15 (first part) would expand the scope of the Directive 
too far by extending the requirement for confidentiality to al] telecommunications 
networks (public and private). 
The Directive concerns interconnection within the Community, as set out in Article 1. 
Amendment 55 is therefore outside the scope of the Directive. 
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World Trade Organisation (WTO) negotiations on basic telecommunications 
services 
(Amendments 10, 54) 
Negotiations on multilateral agreements for comparable and effective access to third 
country markets are currently underway in the context of the World Trade Organisation 
negotiations in Geneva. Amendment 10 is inappropriate as the Directive is due to be 
adopted after the conclusion of the WTO negotiations scheduled for April 1996. 
Amendment 54 would place inappropriate constraints on the action to be taken in the 
case of a lack of agreement at a multilateral level. 
Accounting separation 
(Amendments 6(part), 34, 35, 37, 38, 60) 
Amendments 6 (second part), 34, 35, 37 (second part) would replace the requirement 
for full accounting separation in Article 8 by a weaker requirement for transparent cost 
accounting systems. The Commission proposal represents a careful balance between the 
differing needs of the existing operators, the new entrants and the national regulatory 
authorities; this amendment would tip that balance in favour of the existing operators, 
while also adding to the supervisory load of the national regulatory authorities. 
Amendments 38 and 60 could lead to inconsistency with Commission Directive 
95/51/EC4 on the use of cable television networks for the provision of already liberalised 
telecommunications services, by proposing an additional threshold for accounting 
separation 
National regulatory authorities 
(Amendments 16, 41) 
The need for independence of the national regulatory authorities as expressed in 
amendment 41 is being dealt with elsewhere, in the proposed adaptation of the ONP 
framework Directive (see COM(95) 543). 
The possibility for the national regulatory authority to extend obligations for 
interconnection, as referred to in Amendment 16, is already foreseen in Article 9.6. 
Universal service 
(Amendments 3(parts), 17, 18, 19, 26(part), 31, 32(part), 57(parts), 59, 62, 69) 
Services which cannot at present be made available to all users everywhere cannot be 
accepted as part of a universal service obligation, at least for the time being.. Hence 
amendments 3 (second part) and 57 (first and second parts) are not accepted. 
Amendments 17 (first part) and 18 are not accepted because they would reduce the 
flexibility in the financing of universal service, by requiring Member States to set up a 
universal service fund. 
OJ L 256, 26.10.1995, p.49 
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Amendments 3 (last part) and 17 (second part) would provide for contributions to the 
cost of the universal service obligations to be shared between all operators of 
telecommunications networks (instead of only public networks). This would be unfair on 
those networks which already contribute to the cost of the universal service through 
payment of standard tariffs. 
Amendment 19 would suppress the reference to market benefit for organisations with 
universal service obligations. This is an important factor to be taken into account when 
assessing the net burden*of universal service obligations. 
Amendments 26 (third part), 31, 32 (second part) and 59 could increase the cost of 
market entry to new players and decrease incentives to remove tariff imbalances between 
local and long distance calls. They would have the effect of reducing the clear distinction 
between interconnection charges and contributions to universal service obligations. 
Amendment 62 would reduce the role of the national regulatory authority in overseeing 
contributions to universal service costs. 
The Commission's forthcoming Communication on Universal Service For 
Telecommunications means that amendment 69 is notappropriate. 
Dispute resolution 
(Amendments 25, 49(part), 50) 
Amendment 25 was not accepted because amendment 51, accepted in principle, already 
covers the question of damages in the context of dispute resolution, and retrospective 
adjustments in charges are already foreseen in 9(2) of the Directive. 
Amendment 49 (second part) cannot be accepted as the principles in Article 9(1) are an 
important reference for dispute resolution. 
Amendment 50 would allow a dispute to be pursued simultaneously in national courts 
and at EU level, and could result in two different outcomes. This does not provide legal 
certainty. 
Review of the Directive 
(Amendment 12 (part)) 
There are provisions in the Directive which will need to remain even after achievement of 
full competition, in particular those concerning universal service and dispute resolution. 
The second part of Amendment 12 is therefore not accepted. 
Commission guidelines 
(Amendments 7(part), 21, 30, 36(part), 61) 
Guidelines are considered the most appropriate tool for addressing complex financial 
issues, in that they are flexible and more easily updated than Directives. The committee 
procedure proposed will ensure that the guidelines have the backing of Member States. 
Amendments 7 (first part), 21, 30, 36 (second part), 61 would change the nature of the 
guidelines and/or extend their scope. 
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Definition of significant market power 
(Amendment 4 (parts)) 
The deletions proposed in Amendment 4 cannot be accepted as they are important 
factors for assessing if an organisation has significant market power. The existence of 
alternative means of access to the market does not justify immediate removal of 
obligations on those with significant market power. 
Collocation and facility sharing 
(Amendments 9 (parts) and 45 (parts)) 
Amendments 9 and 45 would result in too rigid a framework for collocation and facility 
sharing, in particular in the area of costing. These are issues which demand a certain 
flexibility of approach in order to decide where the public interest lies. Amendment 45 
would remove the requirement for public consultation. 
Other amendments 
(Amendment 7(part), 26(part), 27) 
Amendments 26 (first part) and 27 would result in inconsistent terminology with other 
ONP Directives. 
Amendment 7 (second part) cannot be accepted as the interconnection point is not 
always the choice of the organisation providing interconnection. 
4. Conclusion 
The Commission has accepted 45 of the 69 amendments proposed by the European 
Parliament at First Reading either in whole, in part or in principle. 
In accordance with Article 189a paragraph 2 of the EC Treaty, the Commission amends 
its initial proposal, incorporating these amendments. 
Amended Proposal for a European Parliament and Council Directive 
on interconnection in telecommunications with regard to ensuring 
universal service and interoperability through application of 
the principles of Open Network Provision (ONP) 
Original text Amended text 
Recital 1 
Whereas from 1 January 1998 (with transition 
periods for certain Member States) the provision of 
telecommunications services and infrastructure in 
the Community will be liberalized; whereas the 
Council's Resolution of 7 February 1994 on 
universal service principles in the 
telecommunications sector^ recognizes that in 
order to promote Community-wide 
telecommunications services there is a need to 
ensure interconnection of public networks and, in 
the future competitive environment, interconnection 
between different national and Community 
operators; whereas Council Directive 90/387/EEC 
of 28 June 1990 on the establishment of the internal 
market for telecommunications services through the 
implementation of open network provision (ONP)(4) 
lays down harmonized principles for open and 
efficient access to, and use of, public 
telecommunications networks and, where 
applicable, services; whereas the Council's 
Resolution of 22 July 1993 on the review of the 
situation in the telecommunications sector and the 
need for further development in that markct(5) 
recognizes that open network provision measures 
provide an appropriate framework for harmonizing 
interconnection conditions; Whereas from 1 January 1998 (with, subject to 
certain conditions, the possibility of transition 
periods in some Member States) the provision of 
telecommunications services and infrastructure in 
the Community will be liberalized; whereas in 
order to promote Community-wide 
telecommunications services there is a need to 
ensure interconnection of networks between 
different national and Community operators; 
whereas Council Directive 90/387/EEC of 28 June 
1990 on the establishment of the internal market for 
telecommunications services through the 
implementation of open network provision (ONP)(4) 
lays down harmonized principles for open and 
efficient access to, and use of, public 
telecommunications networks and, where 
applicable, services; whereas the Council's 
Resolution of 22 July 1993 on the review of the 
situation in the telecommunications sector and the 
need for further development in that market(5) 
recognizes that open network provision measures 
provide an appropriate framework for harmonizing 
interconnection conditions; 
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Recital 4 
Whereas, following the removal of special and 
exclusive rights for telecommunications services 
and infrastructure in the Community, the provision 
of telecommunications networks or services may 
require some form of authorization by Member 
States; whereas all organizations authorized to 
provide public telecommunications networks or 
public telecommunications services in all or part of 
the Community should be free to negotiate 
interconnection agreements on a commercial basis 
in accordance with Community law, subject to 
supervision and intervention by national regulatory 
authorities; whereas it is necessary to ensure 
adequate interconnection within the Community of 
certain networks and services essential for the 
social and economic well-being of Community 
users, notably public telephone networks and 
services, and leased lines; Whereas, following the removal of special and 
exclusive rights for telecommunications services 
and infrastructure in the Community, the provision 
of telecommunications networks or services may 
require some form of authorization by the relevant 
public authority, in accordance with the subsidiarity 
principle; whereas all organizations authorized to 
provide public telecommunications networks or 
public telecommunications services in all or part of 
the Community should be free to negotiate 
interconnection agreements on a commercial basis 
in accordance with Community law, subject to 
supervision and intervention by the relevant 
authorities; whereas it is necessary to ensure 
adequate interconnection within the Community of 
certain networks and services essential for the 
social and economic well-being of Community 
users, notably public telephone networks and 
services, and leased lines; 
Recital 6 
Whereas the Resolution of 7 February 1994 sets 
out conditions for financing a universal voice 
telephony service; whereas obligations for the 
provision of universal service contribute to the 
Community objective of socio-economical cohesion 
and territorial equity; whereas there may be more 
than one organization in a Member State with 
universal service obligations; whereas the 
calculation of the net cost of universal service 
should take due account of costs and revenues, as 
well as economic externalities and the intangible 
benefits resulting from providing universal service 
but, in order not to hinder the on-going process of 
tariff rebalancing, should not include elements 
which are due to historic tariff imbalances; whereas 
costs of universal service obligations should be 
calculated on the basis of transparent procedures; 
whereas financial contributions related to the 
sharing of universal service obligations should be 
unbundled from charges for interconnection; Whereas obligations for the provision of universal 
service contribute to the Community objective of 
socio-economical cohesion and territorial equity; 
whereas the aim should be to introduce new 
technologies like the integrated services digital 
network (ISDN) as soon as possible and on as 
broad a basis as possible in the Member States; 
whereas the current level of deployment of ISDN in 
Member States means that it cannot be made 
available to all users everywhere and therefore it 
cannot at present be subject to a universal service 
obligation; whereas there may be more than one 
organization in a Member State with obligations of 
providing universal service; whereas the calculation 
of the net cost of universal service should take due 
account of costs and revenues, as well as economic 
externalities and the intangible benefits resulting 
from providing universal service but, in order not to 
hinder the on-going process of tariff rebalancing, 
should not include elements which arc due to 
historic tariff imbalances, given that the fixed costs 
associated with the existing network are at present 
partly taken into account in the tariff shared by all 
users of that network; whereas costs of universal 
service obligations should be calculated on the basis 
of transparent procedures; whereas financial 
contributions related to the sharing of the cost of 
universal service obligations should be unbundled 
from charges for interconnection; 
Recital 7 
Whereas it is important to lay down principles to 
guarantee transparency, access to information, non­
discrimination and equality of access, in particular 
for organizations with significant market power; 
whereas the market power of an organization 
depends on a number of factors including its share 
of the relevant product or service market in the 
relevant geographical market, its turnover relative 
to the size of the market, its ability to influence 
market conditions, its control of the means of 
access to end-users, its access to financial 
resources, its experience providing products and 
services in the market; whereas, for the purpose of 
this Directive, an organization with a share of more 
than 25% of a particular telecommunications 
market in the geographical area in a Member State 
within which it is authorized to operate would be 
presumed to enjoy significant market power, unless 
its national regulatory authority determined that this 
was not the case; whereas, for an organization 
foiling below this threshold market share, the 
national regulator^' authority may nevertheless 
determine that the organization enjoyed significant 
market power; Whereas it is important to lay down principles to 
guarantee transparency, access to information, non­
discrimination and equality of access, in particular 
for organizations with significant market power; 
whereas the market power of an organization 
depends on a number of factors including its share 
of the relevant product or service market in the 
relevant geographical market, its turnover relative 
to the size of the market, its ability to influence 
market conditions, its control of the means of 
access to end-users, its international links, its 
access to financial resources, its experience 
providing products and services in the market; 
whereas, for the purpose of this Directive, an 
organization with a share of more than 25% of a 
particular telecommunications market in the 
geographical area in a Member State within which 
it is authorized to operate would be presumed to 
enjoy significant market power, unless the relevant 
regulatory authority determined that this was not 
the case; whereas, for an organization falling below 
this threshold market share, the relevant regulatory 
authority may nevertheless determine that the 
organization enjoyed significant market power; 
Recital 8 
Whereas pricing for interconnection is a key factor 
to determine the structure and the intensity of 
competition in the transformation process towards a 
liberalized market; whereas organizations with 
significant market power must be able to 
demonstrate that their interconnection charges are 
set on the basis of objective criteria and follow the 
principles of transparency and cost orientation, and 
arc sufficiently unbundled in ternis of network and 
service elements offered; whereas publication of a 
list of interconnection services and charges 
enhances the necessary transparency and non­
discrimination; whereas flexibility in the methods of 
charging for interconnection traffic should be 
possible, including capacity-based charging; 
whereas the level of charges should promote 
productivity and encourage efficient and sustainable 
market entry, and should not be below a limit 
calculated by the use of long-run incremental cost 
and cost allocation and attribution methods based 
on actual cost causation, nor above a limit set by 
the stand-alone cost of providing the 
interconnection m question; Whereas pricing for interconnection is a key factor 
to determine the stmcture and the intensity of 
competition in the transformation process towards a 
liberalized market; whereas organizations with 
significant market power must be able to 
demonstrate that their interconnection charges are 
set on the basis of objective criteria and follow the 
principles of transparency and cost orientation, and 
arc sufficiently unbundled in terms of network and 
service elements offered; whereas publication of a 
list of interconnection services, charges, terms and 
conditions enhances the necessary transparency and 
non-discrimination; whereas flexibility in the 
methods of charging for interconnection traffic 
should be possible, including capacity-based 
charging; whereas the level of charges should 
promote productivity and encourage efficient and 
sustainable market entry, and should not be below a 
limit calculated by the use of long-run incremental 
cost and cost allocation and attribution methods 
based on actual cost causation, nor above a limit 
set by the stand-alone cost of providing the 
interconnection m question; 
Recital 9 
Whereas appropriate accounting separation 
between interconnection activities and other 
activities ensures transparency of internal cost-
transfers; whereas, where an organization with 
special or exclusive rights in a non-
telecommunications field also provides 
telecommunications services, accounting separation 
is an appropriate means to discourage unfair cross-
subsidies; Whereas where an organization enjoys significant 
market power, appropriate accounting separation 
between interconnection activities and other 
activities ensures transparency of internal cost-
transfers; whereas, where an organization with 
special or exclusive rights in a non-
telecommunications field also provides 
telecommunications services, accounting separation 
is an appropriate means to discourage unfair cross-
subsidies; 
Recital 11 
Whereas, in accordance with Directive 
90/387/EEC, the essential requirements upon which 
restrictions on access to and usage of public 
telecommunications networks or services are 
justified are limited to security of network 
operations, maintenance of network integrity, 
interoperability of services in justified cases, and 
protection of data as appropriate; Whereas, in accordance with Directive 
90/387/EEC, the essential requirements upon which 
restrictions on access to and usage of public 
telecommunications networks or services are 
justified are limited to security of network 
operations, maintenance of network integrity, 
interoperability of services in justified cases, and 
protection of data as appropriate; whereas the 
reasons for these restrictions must be made public; 
Recital 12 
Whereas facility-sharing can be of benefit for town 
planning, environmental, economic or other reasons, 
and should be encouraged by national regulatory 
authorities on the basis of voluntary agreements; 
whereas compulsory facility-sharing may be 
appropriate in some circumstances, but should be 
imposed on organizations only after full public 
consultation; whereas virtual collocation may 
provide a satisfactory alternative to physical 
collocation of telecommunications equipment; Whereas facility-sharing can be of benefit for town 
planning, environmental, economic or other reasons, 
and should be encouraged by national regulatory 
authorities on the basis of voluntary agreements; 
whereas compulsory facility-sharing may be 
appropriate in some circumstances, but should be 
imposed on organizations only after full public 
consultation; whereas virtual collocation may in 
normal circumstances provide a satisfactory 
alternative to physical collocation of 
telecommunications equipment; 
Recital 22 
Whereas the essential goal of interconnection of 
networks and services throughout the Community 
and the provision of trans-European networks and 
services cannot be realized satisfactorily at Member 
State level, and is better achieved at Community 
level by this Directive; Whereas the essential goal of interconnection of 
networks and services throughout the Community 
and the provision of trans-European networks and 
services cannot be realized satisfactorily at Member 
State level, and is better achieved at Community 
level by this Directive; whereas it may appear 
desirable, when this Directive is reviewed, io 
envisage the possibility of establishing a European 
Regulatory Authority to ensure those tasks carried 
out by the Commission or the National Regulatory 
Authority according to this Directive, which would 
be more efficiently fulfilled through such a 
European Regulatory Authority; 
10 
Article 1 par. 1 
This Directive establishes a regulatory framework 
for securing the interconnection and interoperability 
of telecommunications networks and services in the 
Community, in an environment of open and 
competitive markets. This Directive establishes a regulatory framework 
for securing the interconnection and interoperability 
of telecommunications networks and services in the 
Community and ensuring universal service, in an 
environment of open and competitive markets. 
Article 2 par. 1(h) (new) 
"universal service" means a defined minimum 
service or set of services of specified quality which 
is accessible to all users everywhere and, in the 
light of specific national conditions, at an 
affordable price. 
Article 3 par. 1 
Member States shall take all necessary measures to 
remove any restrictions which prevent organizations 
authorized by Member States to provide 
telecommunications networks and 
telecommunications services from negotiating 
interconnection agreements between themselves in 
accordance with Community law. The 
organizations concerned may be in the same 
Member State or in different Member States. 
Technical and commercial arrangements for 
interconnection shall be a matter for agreement 
between the parties involved, subject to the 
provisions of this Directive and the competition 
rules of the Treaty. Member States shall take all necessary measures to 
remove any restrictions which prevent organizations 
authorized in Member States to provide 
telecommunications networks and 
telecommunications services from negotiating 
interconnection agreements between themselves in 
accordance with Community law. The 
organizations concerned may be in the same 
Member State or in different Member States. 
Technical and commercial arrangements for 
interconnection shall be a matter for agreement 
between the parties involved, subject to the 
provisions of this Directive and the competition 
rules of the Treaty. 
Article 3 par. 3 
Member States shall ensure that organizations who 
interconnect their facilities to public 
telecommunications networks and/or public 
telecommunications services respect at all times the 
confidentiality of information transmitted or stored. Member States shall ensure that organizations who 
interconnect their facilities to public 
telecommunications networks and/or public 
telecommunications services respect at all times the 
confidentiality of information transmitted or storedi 
except when required by their national law for the 
protection of public order. 
Article 5 par. 5 
Where the mechanisms referred to in paragraph 4 
are established, national regulator}' authorities shall 
ensure that the principles for cost sharing, and 
details of the mechanism used, are open to public 
inspection in accordance with Article 14(2). Where a mechanism for sharing the net cost of 
universal service obligations as referred to in 
paragraph 4 is established, national regulatory 
authorities shall ensure that the principles for cost 
sharing, and details of the mechanism used, are 
open to public inspection in accordance with Article 
14(2). 
11 -
Article 6 par. 1 
For interconnection to the public 
telecommunications networks and public 
telecommunications services identified in Annex I 
provided by organizations which have been notified 
by national regulatory authorities as having 
significant market power, Member States shall 
ensure that: For interconnection to the public 
telecommunications networks and public 
telecommunications services identified in Annex I 
provided by organizations which have significant 
market power, Member States shall ensure that: 
Article 6(d) 
interconnection agreements are open to public 
inspection, in accordance with Article 14(2), with 
the exception of those parts which deal with the 
commercial strategy of the parties. In every case, 
details of interconnection charges and any 
contributions to universal service obligations shall 
be published. interconnection agreements and changes to them are 
communicated to the relevant national regulatory 
authorities and the Commission, and made available 
on request to interested parties, in accordance with 
Article 14(2), with the exception of those parts 
which deal with the commercial strategy of the 
parties. The national regulatory authority shall 
decide which parts deal with the commercial 
strategy of the parties. In every case, details of 
interconnection charges, terms and conditions and 
any contributions to universal service obligations 
shall be made available on request to interested 
parties. 
Article 6(e) (new) 
Information received from an organization seeking 
interconnection shall be used only for the purpose 
for which it was supplied. It shall not be passed on 
to other departments, subsidiaries or partners for 
whom such information could provide a competitive 
advantage. 
Article 7 par. 3 
Charges for interconnection shall be based on the 
costs of providing the interconnection services 
requested, and shall normally contain the following 
elements, each of which should be itemized 
separately: 
- a charge to cover re-imbursement of the one­
time costs incurred in providing the specific 
elements of the interconnection requested; (i.e. 
the initial cost of any engineering work needed to 
provide the interconnection facilities requested); 
usage charges related to the utilisation of the 
network elements and resources requested. 
These may include capacity-based charges 
and/or traffic related charges; Charges for interconnection shall be based on the 
costs of providing the interconnection services 
requested, and shall normally contain the following 
elements, each of which should be itemized 
separately: 
- a charge to cover re-imbursement of the one­
time costs incurred in providing the specific 
elements of the interconnection requested; (i.e. 
the initial and subsequent cost of any 
engineering work needed to provide the 
interconnection facilities requested); 
- usage charges related to the utilisation of the 
network elements and resources requested. 
These may include capacity-based charges 
and/or traffic related charges; 
12 
Annex IV indicates, for information only, the types 
of costs that may be included in each of these tariff 
elements. Where other tariff elements are applied, 
these must be transparent and based on objective 
criteria, and approved by the national regulatory 
authority. 
Charges for interconnection may include bulk 
discount schemes. In some cases, these may be 
available only to organizations identified in Annex 
II. Such schemes shall be based on objective 
criteria and applied in a non-discriminatory manner. Annex IV indicates the types of costs that may be 
included in each of these tariff elements. Where 
other tariff elements are applied, these must be 
transparent and based on objective criteria, and 
approved by the national regulatory authority. 
Charges for interconnection may include bulk 
discount schemes. In some cases, these may be 
available only to organizations identified in Annex 
II. Such schemes shall be based on objective 
criteria and applied in a non-discriminatory manner. 
Article 7 par. 5 
National regulatory authorities shall ensure the 
publication, in accordance with Article 14(1), of a 
list of interconnection services and associated tariffs 
broken down into components, according to market 
needs. National regulatory authorities shall ensure the 
publication, in accordance with Article 14(1), of 
terms and conditions for interconnection. This shall 
include a list of interconnection services and 
relevant tariffs broken down into components, 
according to market needs. 
Article 7 par. 5a (new) 
In order to provide a common basis for the 
derivation of interconnection charges. the 
Commission shall draw up. acting in accordance 
with the procedure in Article 15, guidelines on cost 
accounting systems in relation to interconnection. 
Article 7 par. 8 
Member States shall ensure that published 
interconnection charges and charges related to the 
sharing of the cost of universal service obligations 
arc made available to the ONP Committee at the 
request of the Commission. Member States shall ensure that published 
interconnection charges, terms and conditions, and 
charges related to the sharing of the cost of 
universal service obligations are made available to 
the ONP Committee at the request of the 
Commission. 
Article 7 par. 9 
In order to provide a common basis for the 
derivation of interconnection charges, the 
Commission shall, if necessary, draw up, acting in 
accordance with the procedure laid dowTi in Article 
15, recommendations on cost accounting systems in 
relation to interconnection. (deleted) 
13 
Article 8 par. 3a (new) 
The Commission shall, acting in accordance with 
the procedure laid down in Article 15. draw up 
guidelines on accounting separation in relation to 
interconnection. 
Article 8 par. 4 
The financial accounts of organizations providing 
public telecommunications networks or public 
telecommunications services shall be drawn upa 
published and submitted to independent audit. The 
audit shall be carried out in accordance with the 
relevant rules of national legislation. 
The first subparagraph shall also apply to the 
separate accounts required in paragraphs 1 and 2. The financial accounts of organizations providing 
public telecommunications networks or public 
telecommunications services shall be drawn up, 
submitted to independent audit and published. The 
audit shall be carried out in accordance with the 
relevant rules of national legislation, and its results 
shall be made public. 
The first subparagraph shall also apply to the 
separate accounts established as required in 
paragraphs 1 and 2. 
Article 8 par. 6 
Where appropriate, the Commission shall, acting in 
accordance with the procedure laid down in Article 
15. draw up guidelines on accounting separation in 
relation to interconnection. (deleted) 
Article 9 par. 1 
National regulatory' authorities shall encourage and 
secure adequate interconnection in the interests of 
all users, exercising their responsibility in a way 
that provides maximum economic efficiency and 
gives the maximum benefit to end-users. 
In particular, national regulatory authorities shall 
take into account: National regulatory authorities shall encourage and 
secure adequate interconnection in the interests of 
all users, exercising their responsibility in a way 
that provides maximum economic efficiency and 
gives the maximum benefit to end-users. 
In particular, national regulatory authorities shall 
take into account: 
the need to ensure satisfactory end-to-end 
communications for users; 
the need to stimulate a competitive market; the need to ensure satisfactory end-to-end 
communications for users; 
the need to stimulate a competitive market; 
_the need to ensure the fair and proper 
development of a seamless harmonious 
European telecommunication home market, thus 
coordinate their policies, guidelines and actions 
with their counterparts in other Member States 
and .with the Commission; 
14 
the need to promote the establishment and 
development of trans-European networks and 
services, and the interconnection and 
interoperability of national networks and 
services, as well as access to such networks and 
services; 
the principles of non-discrimination (including 
equal access) and proportionality; 
the need to maintain the universal service. the need to promote the establishment" and 
development of trans-European networks and 
services, and the interconnection and 
interoperability of national networks and 
services, as well as access to such networks and 
services; 
the principles of non-discrimination (including 
equal access) and proportionality; 
the need to maintain the universal service. 
Article 9 par. 5 
In the event of an interconnection dispute between 
organizations operating under authorizations 
granted by the same Member State, the national 
regulatory authority of that Member State shall, on 
request of either party, take steps with a view to 
resolving the dispute. 
In so doing, the national regulatory authority shall 
take into account, inter alia: In the event of an interconnection dispute between 
organizations operating under authorizations 
granted by the same Member State, the national 
regulatory authority of that Member State shall, on 
request of either party, take steps with a view to 
resolving the dispute. 
In so doing, the national regulatory authority shall 
take into account, inter alia: 
the user interest, 
regulatory obligations or constraints imposed on 
any of the parties, 
the desirability of stimulating innovative market 
offerings, and of providing users with a wide 
range of telecommunications services at a 
national and at a Community level, 
the availability of technically and commercially 
viable alternatives to the interconnection 
requested, 
the desirability of ensuring equal access 
arrangements, 
the need to maintain the integrity of the public 
telecommunications network and the 
interoperability of services, 
the nature of the request in relation to the 
resources available to meet the request, 
the relative market positions of the parties, 
the public interest (e.g. the protection of the 
environment). - the user interest, 
- the need to maintain a universal service, 
- regulatory obligations or constraints imposed on 
any of the parties, 
- the desirability of stimulating innovative market 
offerings, and of providing users with a wide 
range of telecommunications services at a 
national and at a Community level, 
- the availability of technically and commercially 
viable alternatives to the interconnection 
requested, 
- the desirability of ensuring equal access 
arrangements, 
- the need to maintain the integrity of the public 
telecommunications network and the 
interoperability of services, 
- the nature of the request in relation to the 
resources available to.meet the request, 
- the relative market positions of the parties, 
- the public interest (e.g. the protection of the 
environment). 
-15-
Article 9 par. 6a (new) 
National regulatory authorities shall provide help 
and assistance to their counterparts in other 
Member States whenever required in order to 
implement this Directive. The Commission may at 
any time request a National regulatory authority to 
intervene on specific issues. National Regulatory 
Authorities shall take due account of the 
Commission's request and inform the Commission 
in detail and without undue delay of the steps taken. 
Article 10(e) (new) 
Protection of the environment : Member States may 
impose conditions in interconnection agreements in 
order to ensure the protection of environment or 
comply with objectives of town planning, and in 
particular to impose physical collocation of lines 
and ducts. The need to protect the environment 
does not constitute a valid reason for refusal_to 
negotiate terms of interconnection. 
Article 11 par. 1 
Where an organization is granted a general right 
under national legislation to install facilities for 
telecommunications purposes on, over or under 
public or private land, or may take advantage of a 
procedure for the expropriation or use of property 
for telecommunications purposes, national 
regulatory authorities shall encourage the sharing of 
such facilities and property with other organizations 
providing public telecommunications services. Where an organization is granted a general right 
under national legislation to install facilities for 
télécommunications purposes on, over or under 
public or private land, or may take advantage of a 
procedure for the expropriation or use of property 
for telecommunications puq^oses, national 
regulatory authorities shall encourage the sharing of 
such facilities and property with other organizations 
providing public telecommunications networks and 
services. 
Article 12 par. 2 
In order to ensure full interoperability of European-
wide networks and services, Member States shall 
take all necessary steps to ensure the coordination 
of their national positions in international 
organizations and fora where numbering decisions 
are taken, taking into account possible future 
developments in numbering at a European level. In order to ensure full interoperability of European-
wide networks and services, Member States shall 
ensure the coordination of their national positions in 
international organizations and fora where 
numbering decisions are taken, taking into account 
possible future developments in numbering at a 
European level. 
16 
Article 12 par. 3 
Member States shall ensure that national 
telecommunications numbering plans are controlled 
by the national regulatory authority, in order to 
guarantee independence from organizations 
providing public telecommunications networks or 
public telecommunications services. In order to 
ensure effective competition, national regulatory 
authorities shall ensure that the procedures for 
allocating individual numbers and/or numbering 
ranges are transparent, equitable and timely and the 
allocation is carried out in an objective, transparent 
and non-discriminatory manner. National 
regulatory authorities may lay down conditions for 
the use of certain prefixes or certain short codes, in 
particular where these are used for services of 
general public interest (e.g. freephone services, 
kiosk billed services, directory services, emergency 
services), or to ensure equal access. Member States shall ensure that national 
telecommunications numbering plans are controlled 
by the national regulatory authority, in order to 
guarantee independence from organizations 
providing public telecommunications networks or 
public telecommunications services and facilitate 
number portability. In order to ensure effective 
competition, national regulatory authorities shall 
ensure that the procedures for allocating individual 
numbers and/or numbering ranges are transparent, 
equitable and timely and the allocation is carried 
out in an objective, transparent and non­
discriminatory manner. National regulatory 
authorities may lay down conditions for the use of 
certain prefixes or certain short codes, in particular 
where these are used for services of general public 
interest (e.g. freephone services, kiosk billed 
services, directory services, emergency services), or 
to ensure equal access. 
Article 12 par. 5 
National regulatory authorities shall encourage the 
earliest possible introduction of the facility whereby 
end-users who so request can retain their national 
number at a specific location independent of the 
organization providing service, and shall ensure that 
this facility is available at least in all major centers 
of population before 1 January 2003. National regulatory authorities shall encourage the 
earliest possible introduction of the facility whereby 
end-users who so request can retain, against a 
reasonable contribution, their national number at a 
specific location independent of the organization 
providing service, and shall ensure that this facility 
is available at least in all major centers of 
population before 1 January 2003. If this facility is 
not yet in use, national regulatory authorities shall 
ensure that, once a user has changed supplier, a 
telephone call to his old number is rerouted to the 
user, or that during a reasonable period callers are 
given an indication of the new number. 
Article 16 par. 2 
Any party may refer the dispute to the national 
regulatory authorities concerned. The national 
regulatory authorities shall coordinate their efforts 
in order to bring about a resolution of the dispute, 
in accordance with the principles set out in Article 
9(1). Any party may refer the dispute to the national 
regulatory authorities concerned. The national 
regulatory authorities shall coordinate their efforts 
and shall inform the Commission in order to bring 
about a resolution of the dispute, in accordance 
with the principles set out in Article 9(1). 
-17 
Article 16 par. 5 
The position agreed in accordance with the 
procedure referred to in paragraph 4 shall form the 
basis of a solution to be implemented at a national 
level without delay. If an agreed position is not 
reached, or if an agreed position is not implemented 
within a reasonable time which shall not, except in 
justified cases, exceed two months, the appropriate 
solution shall be adopted by the Commission in 
accordance with the procedure laid down in Article 
15. The position agreed in accordance with the 
procedure referred to in paragraph 4 shall form the 
basis of a solution to be implemented at a national 
level without delay. If an agreed position is not 
reached, or if an agreed position is not implemented 
within a reasonable time which shall not, except in 
justified cases, exceed two months, the appropriate 
solution shall be adopted by the Commission in 
accordance with the procedure laid down in Article 
15. This solution does not prejudice the 
possibilities which exist in national legislation for 
one party to claim in the relevant courts for the 
granting of damages if it appears that the behaviour 
of another party has led to financial losses due to 
distortion of competition. However, issues which 
have been settled at EU level cannot be 
questioned under these claims. 
Article 17 par. 2 
National regulatory authorities shall notify to the 
Commission by 31 January 1997, and immediately 
thereafter in the event of any change, the names of 
those organizations which: National regulatory authorities shall notify to the 
Commission by 31 January 1997, and immediately 
thereafter in the event of any change, the names of 
those organizations which: 
have universal service obligations for the 
provision of the public telecommunications 
networks and services identified in Annex I, Part have universal service obligations for the 
provision of the public telecommunications 
networks and services identified in Annex I, Part 
are subject to the provisions of this Directive 
concerning organizations with significant market 
power; are subject to the provisions of this Directive 
concerning organizations with significant market 
power; 
are covered by Annex II. are covered by Annex II. 
The Commission may request national regulatory 
authorities to provide their reasons for classifying 
an organization as having significant market power. The Commission may request national regulatory 
authorities to provide their reasons for classifying 
an organization as having significant market power 
or for not classifying an organization as such. 
Article 19 par. I 
Deferment from the obligations under Articles 3(1) 
and 9(3) may be requested by those Member States 
identified in the Council's Resolution of 22 July 
1993 who benefit from an additional transition 
period for the liberalization of telecommunications 
services. Deferments granted on these grounds 
shall not exceed the transition periods set out in the 
said Resolution. Member States with less developed networks which 
are granted an additional period of up to five years 
in which to implement all or some of the obligations 
under Directive 96/.../EC may request a 
corresponding deferment of some or all the 
requirements of Articles 3(1) and 9(3). to the extent 
justified by any special or exclusive rights for 
telecommunications services and infrastructure 
allowed under Community law. 
Article 19 par. 2 
Deferment from the obligations under Article 12(5) 
may be requested where the Member State 
concerned can prove that they would impose an 
excessive burden on certain organizations or classes 
of organization. 
The Member State shall inform the Commission of 
the reasons for requesting a deferment, the date by 
which the requirements can be met, and the 
measures envisaged in order to meet this deadline. 
The Commission shall consider the request taking 
into account the particular situation in that Member 
State and the need to ensure a coherent regulatory 
environment at a Community level, and shall info mi 
the Member State whether it deems that the 
particular situation in that Member State justifies a 
deferment and, if so, until which date such 
deferment is justified. Deferment from the obligations under Article 12(5) 
may be requested where the Member State 
concerned can prove that they would impose an 
excessive burden on certain organizations or classes 
of organization. 
The Member State shall inform the Commission of 
the reasons for requesting a deferment, the date by 
which the requirements can be met, and the 
measures envisaged in order to meet this deadline. 
The Commission shall consider the request taking 
into account the particular situation in that Member 
State and the existing possibilities of otherwise 
meeting the requirements, and shall inform the 
Member State whether it deems that the particular 
situation in that Member State justifies a deferment 
and, if so, until which date such deferment is 
justified. 
Article 21 par. 2 
The Commission shall examine and report to the 
European Parliament and to the Council on the 
functioning of this Directive, on the first occasion 
not later than 31 December 2000. For this purpose, 
the Commission may request information from the 
Member States. Where necessary, further measures 
can be proposed in the report for the full 
implementation of the aims of this Directive. The Commission shall examine and report to the 
European Parliament and to the Council on the 
functioning of this Directive, on the first occasion 
not later than 31 December 1999. For this purpose, 
the Commission may request information from the 
Member States. Where necessary, the report shall 
examine what provisions of this Directive should be 
adapted in the light of the developments in the 
market. Further measures can be proposed in the 
report for the full implementation of the aims of this 
Directive; in particular, the report shall examine 
the possibility of establishing a European regulatory 
authority to ensure those tasks carried out by the 
Commission or the national regulatory authorities 
according to this Directive, which would be more 
efficiently fulfilled through such a European 
Regulatory Authority. 
19 
Annex I, Part 1 
The fixed public telephone service 
The fixed public telephone service means the 
provision to end-users at fixed locations of a service 
for the originating and receiving of national and 
international calls, and may include access to 
emergency (112) services, the provision of operator 
assistance, directory information services, provision 
of public pay phones, provision of service under 
special terms and/or provision of special facilities 
for customers with disabilities. The fixed public telephone service 
The fixed public telephone service means the 
provision to end-users at fixed locations of a service 
for the originating and receiving of national and 
international calls, and includes access to 
emergency (112) services, the provision of operator 
assistance, directory information services, provision 
of public pay phones, provision of service under 
special terms and/or provision of special facilities 
for customers with disabilities. 
Annex II par. 4 
Organizations included in this category at their own 
request, under relevant national licensing or 
authorization schemes. Organizations providing telecommunication 
services which are included in this category at their 
own request, under relevant national licensing or 
authorization schemes. 
Annex VII, Part 2. (n) (new) 
Provision of facility sharing. 
Annex VII, Part 2. (o) (new) 
Maintenance and quality of interconnection 
services. 
Annex VII, Part 2. (p) (new) 
Protection of confidential information. 
Provision of facility sharing. Annex VII, Part 3. (b) 
(deleted) 
Annex VII, Part 3. (e) 
Maintenance and quality of interconnection (deleted) 
services. 
20-
ISSN 0254-1475 
COM(96) 121 final 
DOCUMENTS 
EN 15 
Catalogue number : CB-CO-96-131-EN-C 
ISBN 92-78-01831-7 
Office for Official Publications of the European Communities 
L-2985 Luxembourg 
IX