Opinion of the Economic and Social Committee on 'Towards a European Numbering Environment - Green Paper on a numbering policy for telecommunications services in Europe` (97/C 287/05)

On 26 November 1997 the European Commission decided to consult the Economic and Social Committee, under Article 198 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for Transport and Communications, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 5 May 1997. The rapporteur was Mr Mobbs.

At its 346th plenary session (meeting of 28 May 1997), the Economic and Social Committee adopted the following opinion by 89 votes for and 1 vote against.

1. Introduction

1.1. On 1 January 1998 telecommunication services and infrastructures will be fully liberalized across the European Union (with derogations for some Member States). This date may lose its importance if all national implementation measures are not taken and observed.

1.2. In addition, measures are still required to enable telecommunication operators, service providers, businesses and users to benefit fully. At the same time adequate protection of all consumer and user interests must be ensured. Numbering reform is one such measure since numbers are finite, yet with each rapid increase in new services there are ever increasing demands by service providers for more numbers. The availability of such numbers is therefore a key element in increasing competition. It has, moreover, to be recognized that still more numbers may be required to satisfy demand for services that become available as a result of technological advances and the increasing popularity of features such as paging, additional lines for home faxes or modems (in addition to expanding business uses), mobile phones, cable TV etc. The recent results of the WTO negotiations on basic telecommunications whereby 69 participants offered to liberalize their domestic telecommunications regimes is expected to cause a huge growth in the global telecommunications market and will therefore also increase the demand by global service providers for more and more numbers.

1.3. The 1995 Green Paper on liberalization of the full telecommunications infrastructure () recognized numbering as 'a key facilitator - a pivot in market liberalization and the introduction of competition`. It was seen as necessary to ensure that the 'development of telecommunications networks and services are not hampered on numbering grounds` and that 'this challenge needs to be addressed by careful management of the overall numbering schemes, at a global, European and national level`. With these goals in mind, Directive 96/19/EC () requires Member States to ensure, before 1 July 1997, that adequate numbers are available for all telecommunication services. Numbers must be allocated on a fair, transparent and non-discriminatory basis as an essential condition for effective competition, innovation and consumer choice.

1.4. The Commission has now issued this green paper to propose a number of possible options for the future treatment of numbering issues in Europe and to launch an active debate amongst interested parties with a view to having a 'master plan` in place by 1 January 1998.

1.5. The key players and the main factors under consideration are referred to below.

1.5.1. Key Players other than the European Commission:

- The National Regulatory Authorities (NRAs). Directives 88/301/EEC and 90/388/EEC both require Member States to establish NRAs to ensure the separation of regulatory activities from the operation and provision of services provided by telecommunications organizations (TOs).

- The Conference Européenne des Postes et Télécommunications (CEPT), the Europe-wide organization comprising over 40 members' administrations from geographical Europe, the European Committee of Telecommunication Regulatory Affairs (ECTRA) and the European Telecommunications Office (ETO). ECTRA and ETO are bodies set up under CEPT with specific responsibilities for licensing, numbering, interconnection etc.

- European Public Telecommunications Network Operators' Association (ETNO) comprising the telecom operators in Europe and any operator with a public voice telephony licence. Discussions are ongoing to open up to independent mobile operators.

- European Telecommunications Standards Institute (ETSI) whose membership is open to any body including those outside Europe.

- European Numbering Forum (ENF) set up as an industry forum to discuss numbering and related issues. Membership is open to any organization with an interest in numbering, that is represented at European level.

- Global Systems for Mobile Communications (GSM) Memorandum of Understanding (MOU) and in particular the European Interest Group (EIG) which represents 75 mobile operators in Europe.

- International Telecommunications Union - Telecommunications sector (ITU-T), comes under the umbrella of the United Nations and has over 180 sovereign states as members (including all EU Member States) has responsibility for the international regime for telecommunications including numbering. CEPT and ETSI attend its meetings as observers.

1.5.2. Factors relevant to the demand for numbers:

- Telephony liberalization: the abolition of any restriction on the provision of (voice) telephony from 1 January 1998.

- Carrier selection: the possibility for customers to choose their long distance or international operator.

- Portability: mainly referred to as the possibility to transfer service on a telephone number from one operator to another.

- Freephone: a service (free of charge to the caller).

- Numbering availability: provision of an adequate and open supply of numbers to ensure that competition is not stifled.

1.6. Member States must ensure the availability of numbers to enable the operation of an efficient and economic service within their territory aside from the requirements generated by international traffic. Several Member States have recently established new numbering plans. It must be noted that consumers resist (re)numbering as it is costly, disruptive and generally unpopular with users/general public. Therefore any changes to national numbering plans have to demonstrate that without such changes the proper development of the telecommunications sector will be endangered.

1.7. The pattern of numbering reform shows very different national approaches which may not resolve many of the fundamental competitive issues created by a multi-operator environment, nor does it provide an immediate response to the demand for unique Europe-wide numbers for certain operators or certain services, should this arise later.

2. The Commission green paper

2.1. The Commission green paper explains why numbering reform is necessary and reviews what are seen as the main problems areas.

2.1.1. Efficient telecommunication services are seen as a key factor for the emergence of the Information Society. Numbering is a commercial and competitive factor for the whole of Europe's telecommunications industry and impacts directly on consumers. The Commission considers that a numbering policy must be based on defined political priorities. These include objectives driven by the liberalization process and those resulting from the rapidly changing economic and technological environment.

2.2. The current situation

2.2.1. Today there is a complex set of rules governing numbering policy established at global, European and national levels within an overall framework established by the ITU-T.

2.2.2. The green paper recognizes that much has been done to date:

- Common Europe-wide numbers for emergency services and international call prefix.

- The independent role of NRAs is developing.

- Establishment of a framework extending beyond the EU for cooperation on numbering (the ENF).

2.2.3. Within the European telephony numbering environment, the Commission asserts that there is a clear split between the incumbent operators and new market players on the best way to proceed.

2.3. Proposals for action

2.3.1. Ensuring effective competition by facilitating carrier selection, number portability and restructuring national numbering plans.

2.3.2. Facilitating a single market through the establishment of a European Telephone Numbering Space (ETNS), the development of private and corporate networks, NRAs and numbering regulation.

2.3.3. Adapting to the information society through a long term European numbering plan and Internet naming.

2.4. The Commission sets out targets, including dates, for the proposed objectives and measures, on which comments are sought specifically.

2.5. In its conclusions, the Commission summarizes all its proposals and names the bodies and organizations including users from whom comment is sought.

3. General Comments

3.1. The Committee welcomes the green paper and recognizes that it is an important part of the necessary follow-on to the enormous steps towards liberalization which the Commission has undertaken since the Green Paper on Telecommunications () was issued in 1987.

3.2. The Committee recognizes that the Commission foresees the need for action to be taken by Member States in order to ensure that a scarce resource, such as numbering, is not another 'barrier to entry` or otherwise an impediment to the full development of the necessary open and competitive market place in telecommunications services as envisaged by the various directives leading to full liberalization on 1 January 1998.

3.3. In considering which proposals to adopt as concrete measures the Commission should not preclude alternative solutions which may offer better 'value for money` (for both consumers and operators) to those contained in the green paper.

3.4. A number of studies on the costing of the various measures proposed by the Commission are being undertaken and the Committee considers that additional studies may be necessary. It is regrettable that agreed recommendations flowing from this green paper may not be implemented until after 1 January 1998. However, full liberalization and all that this requires must not be prejudiced.

3.5. From a practical point of view, it should be noted that the suggested time frame for the changes proposed will unfortunately coincide with both the planned introduction of the euro and the Millennium problem, which could result in a possible shortage of skilled software engineers.

3.6. Numbers are a scarce resource and therefore restrictions on the use of numbers imposed by Member States, their national regulatory authorities or public operators can distort competition and have an adverse effect on the telecommunications market place. This will be a matter to be kept under review by those charged with enforcing the Union's competition law.

4. Specific comments

4.1. Role of numbering in ensuring effective competition

4.1.1. Carrier selection and pre-selection

4.1.1.1. The Commission has focussed on two main types of carrier selection:

- carrier selection: a simple mechanism allowing the customer to choose a carrier by use of code or pre-programmed equipment for each call in the absence of which a long-distance carrier is automatically chosen by the local access provider (local operator) with the possibility of the user overriding that choice on a call-by-call basis ('easy access`);

- carrier pre-selection: local operator/service provider will automatically route long-distance and international calls of a customer to the long-distance carrier of the customer's choice. The customer does not then have to dial or arrange pre-programming of special carrier selection codes with every call ('equal access`).

4.1.1.2. The Commission proposes the introduction of carrier selection on a phased basis:

- from 1 January 1998 ('easy access`); and

- from 1 January 2000, carrier pre-selection ('equal access`) plus the possibility of an override on a call-by-call basis.

4.1.1.3. Some Member States have already introduced carrier selection. Under the 'easy access` system it is anticipated that existing operators remain the operator by default for the majority of customers. This will give existing operators an opportunity to reassess their position in the national, European and global market in preparation of the introduction of the 'equal access` method whereby more customers will (probably) switch to a different operator. The Commission's proposal to use the 'easy access` system as an intermediate step in a phased approach and use the 'equal access` method as the medium to long-term goal could therefore lead to a more gradual transition towards an open competitive market. The precise impact will however depend on the characteristics of the markets concerned.

4.1.1.4. The Committee acknowledges the benefits of carrier selection in general which will result in lower prices and constitute an immediate stimulus to the economy. The Committee also recognizes that there is industry concern about the effects on competition in the single market if the carrier selection route were adopted in some Member States and the carrier pre-selection route in others. It is the Committee's view that an uneven introduction of carrier selection mechanisms could lead to distortions of the European single market. The Committee feels therefore that harmonization/synchronization of the introduction of selection and pre-selection should be given serious consideration: this must include comprehensive cost-benefit analysis. In addition, the Commission should give further consideration to cross border aspects in this context and problems concerning choice of operator in other countries.

4.1.1.5. There are good arguments for the 'equal access` route. i.e. pre-selection of carriers. In countries where competition is less developed and other facilitating mechanisms such as effective competition laws do not exist, pre-selection enhances competition in a more effective way than the 'easy access` selection method. The overriding objective is to ensure that customers have the maximum possible opportunity to choose between alternative carriers if they wish to do so. Pre-selection, possibly in combination with (re)balloting and/or marketing campaigns, enhances customers' awareness of their alternative choices and encourages customers to benefit fully from this possibility.

4.1.1.6. Where the 'equal access` route is chosen the Committee would advocate that customers should be able to re-select their carrier at any time subsequent to the initial pre-selection via a simple and cost-free mechanism. The Committee would therefore support carrier pre-selection as one important means of fostering competition in the main telecommunications markets, subject to harmonization/synchronization as mentioned in 4.1.1.4.

4.1.2. Number portability

4.1.2.1. The Commission proposes the removal of all technical restrictions prohibiting local loop operator portability and number portability for mobile and personal communications services as well as non-geographic services as quickly as possible. Local loop operator portability is proposed to be available in major centres of population by 1 January 2000 at the latest. Number portability for mobile and personal communications services mentioned above is also proposed to be available by 1 January 2000 at the latest.

4.1.2.2. Polls have indicated that some 80 to 90 percent of business customers would not consider switching operators if they cannot take their number with them.

4.1.2.3. The Committee strongly supports the introduction of number portability relating to location within the local area, similar service and service provider portability (including service number portability), at the earliest possible date after 1 January 1998 subject to technical feasibility. For the time being, further portability of numbers is thought to be undesirable given that essential tariffing information would be lost.

4.1.2.4. Without the Commission forcing the pace, number portability will probably not take place in all Member States, at least not within reasonable timescales.

4.1.2.5. In determining the earliest possible date, notice should be taken of a number of concerns expressed by industry players about the practicability and desirability (costs, benefits) of defining common methods and ensuring compatibility between different operators using different technologies and how to resolve service management issues and other technology issues, in particular with respect to mobile and personal communications networks ().

4.1.3. Restructuring national numbering plans

4.1.3.1. The Commission proposes the restructuring of national numbering schemes on a phased basis:

- before 1 July 1997, adequate numbers must be made available to allow in particular new entrants to provide all telephony services to the public;

- from 1 July 1997, national schemes should be reviewed towards further integration of the national numbering plans; and

- after completion of the technical work by ETO, national numbering schemes should be adapted according to the agreed common guidelines and completed by the year 2000. Meanwhile, Member States should not allocate numbers beyond the length of 13 digits, (including country code and excluding international or carrier selection prefix).

4.1.3.2. The Commission's proposals should only set out the framework for implementing numbering reform. Actual numbering reform will need to be carried out by Member States and their respective National Regulatory Authorities.

4.1.3.3. The Committee supports the Commission's view that national numbering plans will need to be rewritten in any event to take account of the vast expected increase in telecommunications traffic that will take place following full liberalization on 1 January 1998 and the recent results of the WTO negotiations. Changes are proceeding today at a national level in any event and they are not always part of a clear long-term European strategy.

4.1.3.4. The Committee acknowledges that any reform of national numbering plans is necessarily going to have an impact on consumers. Consumers resist change to their telephone numbers, so they have to be convinced that what is taking place is necessary and will lead to long-term benefits for them. Previously, changes have met resistance and should be an experience to learn from. Bearing in mind that frequent changes in a national numbering scheme involve high costs in re-programming equipment and updating software, Member States should avoid unnecessary changes.

4.1.3.5. Therefore, the reform of national numbering plans should be done properly, be co-ordinated and be 'once and for all`, insofar as this is possible and practicable.

4.2. Facilitating the Single Market

4.2.1. European Telephone Numbering Space

4.2.1.1. The green paper proposes the creation of the ETNS, a numbering space that sits parallel to the national numbering spaces, for services such as pan-European freephone, shared revenue and personal numbering from 1 January 1998. Other proposals are for changes from 1 January 2000 to European country codes (the existing codes to be prefixed by '3`) and for integration of national schemes which in particular would require wide scale changes to access codes in the Member States.

4.2.1.2. It should be noted that the necessary application for the use of the 388 European Country Code for the ETNS has already been made to the ITU and this has the full support of NRAs, ENF and ECTRA.

4.2.1.3. In view of the basic issues at stake it is worth considering some of the major points concerning ETNS:

- the Universal International Freephone Service ('UIFS`) is considered the platform that will create a true pan-European freephone market;

- increasing demand for Europe-wide numbers as sales, marketing and customer support activities for global products are often organized on a European level;

- the relationship of global developments to latent demands for Europe-wide services such as premium rate and shared cost services;

- the pace of the liberalization in the European Union is progressing more rapidly than in many other parts of the world. The European Union cannot wait for ITU developments where these clearly lag behind European needs, but must take its own initiatives in this field;

- the ETSI taskforce will conclude its studies on the subject by the end of 1997, and it is considered that at least eighteen months will be needed to agree and to implement the chosen solution;

- the administration of the ETNS requires the creation of a new European Authority which does not exist today. Some industry players feel that the creation of such an Authority, which implies negotiations between NRAs and the Commission, cannot be as rapid as the green paper suggests;

- if the ETNS is based on the ECTRA preference for Country Code 388 the time scale for the ITU agreement must be taken into account and carried out; and

- the implementation of ETNS will depend on the interest of operators and service providers to launch pan-European services. The services provided within the ETNS should be market driven and not imposed by regulatory measures.

4.2.1.4. Whilst the Committee is of the opinion that ETNS should be adopted as soon as possible there should be a constant review of the economic and social benefits of the creation of ETNS.

4.2.1.5. The Committee supports the creation of ETNS where there is currently no equivalent global service or European solution that can be achieved more quickly. Global services can be pan-European services that can also be offered at a global level or by multi national operators having their own international numbering resources.

4.2.2. European Numbering to be administered by/at EU level

4.2.2.1. The Commission proposes the creation of a new European Authority by 1 January 1998, at the latest. The Committee does not feel that the Commission has provided sufficient detail about this new authority to enable the Committee to express a view. More information on the nature and role of such a body (which would naturally have a clear coordination role in connection with ETNS and any subsequent developments) is required.

4.2.2.2. A framework for numbering will need to be established at a European level. This could be done, for example, through bolstering the existing international organizations (i.e. putting ETO, which is already a legal entity in Denmark on a more legal footing).

4.2.2.3. The implementation of any agreed rules and regulations would remain a matter for each Member State and their respective national regulatory authority. Member States therefore should retain the right to administer numbers.

4.2.3. Convergence in numbering

4.2.3.1. The Committee acknowledges that in a multi-operator environment in Europe, where more and more people are travelling, working and living in different parts of the Union, the use of the telephone should be simple, user-friendly and that numbers should give some indication of price.

4.2.3.2. The Committee supports the Commission's view that the dialling arrangements across Europe need harmonizing.

4.3. Adapting European Numbering environment to Information Society

4.3.1. Creation of long term numbering plan for Europe

4.3.1.1. The Commission proposes the development of a long-term strategic plan for numbering in Europe at the latest by 1 January 1998, as outlined below.

4.3.1.2. By 2000, the convergence of the national numbering schemes and the ETNS through a unified European numbering scheme is envisaged. Also by 2000, intra-European calls will no longer be treated as international calls and will be allocated an appropriate prefix applicable throughout Europe. The Commission believes that this will facilitate dialling and remove psychological barriers and open a range of common short codes for different applications e.g. carrier selection etc.

4.3.1.3. However, it is important to note that changes to existing Country Codes not only impact on the countries whose code changes, but on the rest of the world, where international switches have to be reprogrammed. The impact on the rest of the world, for which there is no obvious benefit, is repeated every time a change takes place to achieve the paper's objectives. Additionally, there are no easy migration paths for the proposed changes.

4.3.1.4. The Committee agrees with the Commission that users must be closely involved in the formulation of the long-term numbering strategy. Whilst the Committee supports the Commission's long-term strategy for numbering in Europe, feeling this will benefit European consumers and create a European identity, the Commission should provide more information on this subject.

4.3.2. Naming and addressing in the Internet and other emerging multi-media

4.3.2.1. The Commission feels that consideration should be given to the situation with regard to Internet naming and addressing in the Member States and, if necessary, to measures proposed to safeguard their fair and non-discriminatory allocation.

4.3.2.2. The market is a global one and very much driven by market forces. The Committee would urge the Commission to explore a proactive European role within international fora, and in particular those dealing with naming and addressing, as the Internet develops.

Brussels, 28 May 1997.

The President of the Economic and Social Committee

Tom JENKINS

() Green Paper on the liberalization of telecommunications infrastructure and cable television networks - Part II: A common approach to the provision of infrastructure in the European Union (COM(94) 682 final); ESC Opinion: OJ C 301, 13. 11. 1995, p. 24.

() Commission Directive 96/19/EC of 13 March 1996 amending Directive 90/388/EEC with regard to the implementation of full competition in telecommunications markets (OJ L 74, 22. 3. 1996, p. 13); ESC Opinion: OJ C 39, 12. 2. 1996, p. 52.

() Green Paper on Development of the Common Market for Telecommunications Services and Equipment (COM(87) 290 final, 30. 6. 1987).

() See ECOSOC Opinion on Interconnection/Interoperability in Telecommunications, OJ C 153, 28. 5. 1996, p. 21.