OPINION OF THE COMMISSION pursuant to Article 251 (2), third subparagraph, point (c) of the EC Treaty, on the European Parliament's amendments to the Council's common position regarding the proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on a common regulatory framework for electronic communications networks and services AMENDING THE PROPOSAL OF THE COMMISSION pursuant to Article 250 (2) of the EC Treaty

2000/184 (COD)

OPINION OF THE COMMISSION pursuant to Article 251 (2), third subparagraph, point (c) of the EC Treaty, on the European Parliament's amendments to the Council's common position regarding the proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on a common regulatory framework for electronic communications networks and services AMENDING THE PROPOSAL OF THE COMMISSION pursuant to Article 250 (2) of the EC Treaty

1. Introduction

Article 251(2), third subparagraph, point (c) of the EC Treaty provides that the Commission is to deliver an opinion on the amendments proposed by the European Parliament at second reading. The Commission sets out its opinion below on the 23 amendments proposed by Parliament.

2. Background

In response to the conclusions of the special European Council of Lisbon of 23 - 24 March 2000, and building on the Communication on the results of the public consultation on the 1999 Review of the Electronic Communications Sector and the principles and orientations for the new Regulatory Framework (COM(2000)239), the Commission proposed this Directive on a common regulatory framework for electronic communications networks and services - the central measure in a package of five directives that would make up the new regulatory framework. The new framework seeks to take account of the convergence between telecommunications, broadcasting and IT sectors. It seeks to reinforce competition in all market segments, while ensuring that the basic rights of consumers continue to be protected. It is designed to cater for new, dynamic and largely unpredictable markets with many more players than today.

The European Parliament adopted its first reading on 1 March 2001 and the Commission adopted its modified proposal on 4 July 2001. The Council adopted its common position on 17 September 2001 unanimously. The Commission considered that the common position would have significantly weakened the content of its proposal and would have reduced the likelihood of consistency of regulation across the EU. For these reasons, the Commission was not able to support the common position.

The amendments voted by the European Parliament are part of a compromise package of amendments on four directives, including the present directive, and one decision on spectrum that was put as an ensemble to the EP by the Council Presidency. The package was accepted in its totality in the plenary vote by the EP on 12 December. Since the amendments are acceptable to the Council, the conciliation procedure will not be invoked. Final adoption by the Council is foreseen in the beginning of 2002 following verification of the texts by jurist-linguists.

3. Purpose of the proposal

This proposed Directive aims to establish a harmonised regulatory framework for electronic communications networks and services across the EU. It seeks to respond to the convergence phenomenon by covering all electronic communications networks and services within its scope. It sets out a number of principles and objectives for regulators to follow, as well as a series of tasks in respect of management of scarce resources such as radio spectrum and numbering. Finally, it contains a number of horizontal provisions common to more than one measure in the package.

4. Opinion of the Commission on the amendments by the European Parliament

The Parliament adopted 23 amendments to the Framework directive on 12 December 2001. The Commission can accept all of them in full.

4.1. Harmonisation (amendments 23, 39, 40, 41, 42, 43 and 49)

The main issue dividing Council and Parliament during negotiations has been the so-called 'transparency mechanism' in Article 6. The Commission proposed that the Commission should have powers to require a national regulatory authority to withdraw draft measures in certain areas where those measures were contrary to Community law and the objectives set out in Article 7. Parliament strongly supported the Commission proposal in its first reading, sharing the Commission's analysis that there was a need for a balancing harmonisation power, given the increased discretion delegated to national authorities under the new framework. The Council rejected this binding intervention power in its common position.

The compromise solution, set out in amendments 39-43 and 49, represents a good balance between these two positions, concentrating the Commission's power to intervene on the two issues central to maintaining consistency of regulatory action. It covers decisions to analyse markets not listed in the Commission's Recommendation under Article 14, and the designation or not of undertakings as having Significant Market Power (SMP).

Amendment 23 will reinforce consistency of regulatory decision-making.

4.2. Interoperability (amendments 46, 47, 48 and 53)

In its first reading, and in committee, the Parliament adopted several amendments strengthening provisions on interoperability, in particular an amendment mandating implementation of the so-called Multimedia Home Platform (MHP) standard for interactive services on digital TV on all new market players (and entirely replacing the existing Article 16 on standardisation).

Council argued that to impose the MHP standard would contradict the new approach on standardisation and the directive's own Article 16 whereby standardisation should be industry-led and voluntary, and to require NRAs to have objectives related to content was not appropriate.The compromise (in amendments 46-48) strikes a good balance between the two positions.It requires Member States to encourage digital television platform operators to use open application program interfaces (APIs), and requires the Commission to review the application of the provision one year after the package is transposed, with a view to holding a public consultation upon the desirability of making a standard mandatory.

Amendment 53 usefully strengthens the regulatory objective on interoperability.

4.3. Right of appeal (amendments 25, 44 and 45)

Article 4 ensures that any user or undertaking providing electronic communications networks and/or services who is affected by a decision of a national regulatory authority, has the right of appeal against the decision. Amendment 44 (and amendment 45 to the associated recital) clarify that the appeal body may be a court, and require Member States to ensure that the merits of the case are duly taken into account. This is in line with the Commission's original proposal and the Commission can therefore support it.

Amendment 25 (and amendment 45 to the associated recital) introduce a new requirement for appeal against decisions on rights of way. This is a useful strengthening of the package on rights of way which the Commission fully supports.

4.4. Roaming (amendment 37)

This amendment adds the national market for international roaming to the list of markets which the Commission must include in its first Recommendation on Relevant Markets, thereby ensuring that this market is analysed by national regulatory authorities. The Commission recognises that there are legitimate concerns about the degree of competition in international roaming, and considers this amendment a useful strengthening of the text on this point.

4.5. Other amendments clarifying and strengthening the text (amendments 2, 6, 26, 27, 29, 50, 51 and 52)

Amendment 2 clarifies that a market which is effectively competitive within the meaning of Article 15 is in effect a market on which there is no undertaking with a dominant position.

Amendment 6 clarifies that systems that use electricity cables for transmission of signals (i.e. 'powerline' systems) are a further example of an electronic communications network.

Amendment 52 adds a definition of 'trans-national market', a list of which the Commission must identify according to Article 14, and amendments 27 and 29 amend references accordingly.

Amendments 50 and 51 clarify that there is an obligation on NRAs and competition authorities to provide each other with the information necessary to carry out their tasks under this directive, but that confidentiality of this information must be ensured.

Amendment 26 adds an obligation for the Commission to consult publicly on its Recommendation on Relevant Markets before adoption.

All these amendments clarify or strengthen the text and the Commission can fully support them.

5. Conclusion

Pursuant to Article 250(2) of the EC Treaty, the Commission amends its proposal as set out above.