WRITTEN QUESTION P-2508/00

by W. G. van Velzen (PPE-DE) to the Commission

(24 July 2000)

Subject: Effects of auctioning of UMTS frequencies for mobile phones

In reply to my written question P-1839/00(1) to the European Commission, Commissioner Liikanen stated that the Commission was examining the economic impact of auctions, which depended on a number of variables.

1. What criteria are being employed by the Commission in checking that new entrants and incumbents are treated equally, and does this mean in practice that in auctions of licences there must be separate blocks for new entrants and incumbents?

2. What legal basis is being used by the Commission for such an ex post economic analysis?

3. If such an ex post economic analysis shows that the high proceeds from auctions are incompatible with the provisions of the licences directive and/or other principles of EC law, what further action will be taken, who will have to be paid back and what will this mean for auctions that have already been held?

4. What ex ante measures will the Commission be proposing, taking account of this situation, in connection with the forthcoming revision of telecommunications legislation, in order in future to avoid the need for ex post action? If none have been provided for in the forthcoming package of measures, what measures will need to be adopted?

5. How will the Commission ensure that such an economic examination, which is to be carried out carefully and will therefore take time, does not hinder the rapidly-growing telecommunications market or even interfere with competition in a market in which companies that are the first to provide a product quite definitely have the competitive advantage?

6. Can the Commission promise that it will actively ensure that special access agreements for the benefit of third parties are concluded by UMTS licence holders?

7. (a) Does the Commission agree with the fact that in a number of auctions the national government is carrying out what, in accordance with Article 11(2) of the licences directive, should be carried out by the national regulatory authority?

(b) Does the Commission consider that in the case of the Netherlands auction, in which the Dutch state is both acting as organiser of the auction and, at the same time, is a major shareholder in one of the undertakings bidding in the auction, neutrality is ensured?

(1) OJ C 89 E, 20.3.2001.

Answer given by Mr Liikanen on behalf of the Commission

(22 September 2000)

1. As stated in its answer to the Honourable Member's written question P-1839/00(1), the Commission is following very closely the implementation of procedures in the Member States for the licensing of third generation mobile networks in the light of the applicable principles of Community law, as referred to in that answer. It is for the Member States to apply those principles, including the non-discrimination principle, in the light of prevailing conditions in their respective markets. Whether there should be separate lots for new entrants and existing licensed operators is therefore a matter to be determined by each Member State in the light of the circumstances in its territory.

2. The Commission will assess the economic impact of the procedures used in the Member States and its relationship with the development of innovative services and competition, not only in the context of its ongoing monitoring of the application of Community law but also with a view to developing spectrum policy in the future.

3. In the event that any proceedings were brought in the future, the Commission would consider the measures to be taken on the merits of the cases concerned.

4. The Commission has verified the Member States' licensing regimes in accordance with the provisions of Commission Directive 90/388/EEC of 28 June 1990 on competition in the markets for telecommunications services(2) (as amended by Council Directive 1999/59/EC of 17 June 1999(3)), and has brought a number of infringement proceedings pursuant to Directive 97/13/EC of the Parliament and of the Council of 10 April 1997 on a common framework for general authorisations and individual licences in the field of telecommunications services(4) relating to matters which, while not specific to the licensing of third generation mobile, are important in ensuring compliance with the Community framework. As regards the proposals for a new regulatory framework adopted by the Commission on 12 July 2000(5), the Commission considers that the emphasis in the

proposed Framework Directive on the co-ordination of spectrum issues, together with the possibility for the identification of best practices and their application throughout the Community in the proposed spectrum decision(6), will contribute to safeguarding the Community interest in this field.

5. The Commission has been working since before the adoption in 1998 of its proposal for a UMTS Decision(7) to ensure the timely and co-ordinated introduction of third generation mobile systems in the Community. Its analysis of the economic impact of third generation mobile licensing procedures will naturally take account of these priority objectives and should not have any distortive effect on competition.

6. The Commission will continue to monitor the provisions relating to access for third parties to mobile networks in the Member States with a view to encouraging the development of fair competition throughout the Community.

7. The Commission draws attention to the fact that, under the regulatory framework, regulatory tasks may be carried out by bodies other than the separate regulatory agency set up in the Member State concerned. Accordingly, in the case of the Netherlands it is for the authorities of that Member State to decide on the division of regulatory tasks as between the bodies designated under national law, while ensuring that the principle of Community law of the structural separation of such bodies from activities associated with ownership or control of a telecommunications operator is complied with. The Commission, for its part, has no reason to believe that that principle has not been respected in the Netherlands.

(1) OJ C 89 E, 20.3.2001.

(2) OJ L 192, 24.7.1990.

(3) OJ L 162, 26.6.1999.

(4) OJ L 117, 7.5.1997.

(5) COM(2000) 407 final.

(6) COM(2000) 393 final.

(7) Decision 128/1999/EC of the Parliament and of the Council of 14 December 1998 on the co-ordinated introduction of a third-generation mobile and wireless communications system (UMTS) in the Community (OJ L 17, 22.1.1999).