WRITTEN QUESTION E-1319/96 by Felipe Camisón Asensio (PPE) to the Commission (3 June 1996)

Subject: Specifying certain aspects of the concept of universal service in the telecommunications sector

Liberalization of the telecommunications sector is underway in the European Union, and the Commission has stated its position with regard to the concept of universal service, establishing certain minimum quality levels for the services to be provided. However, with regard to costs, it has given no more than an indication that they should be based on reasonable and affordable prices, leaving it up to the Member States to decide whether to set up a fund to this end, or whether to provide refunds for major operators.

1. What specific indications can the Commission give with regard to assessing national attitudes to the questions of costs and funding?

2. Can the Commission state in figures what it considers to be a reasonable and affordable price?

Answer given by Mr Bangemann on behalf of the Commission (3 July 1996)

On 13 March 1996, the Commission adopted a communication on universal service for telecommunications in the perspective of a fully liberalised environment ((COM(96) 73 final. )). It identified the scope of universal service at a Community level, highlighting, in particular, the importance of affordability of the service for all users. It also suggested principles for the costing and funding of universal service, which have been given legislative form in Commission Directive 96/19/EC ((OJ L 74, 22. 3.1996. )) of 13 March 1996 amending Commission Directive 90/388/EEC regarding the implementation of full competition in telecommunications markets, and the proposal for a 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 ((OJ C 313, 24.11.1995. )).

The proposed interconnection directive provides a methodology to be used to calculate the cost of universal service on the basis of a net cost approach (the difference between the net cost for an organisation of operating with the universal service obligations and operating without the universal service obligations). Such an approach is valid both in the case of fully developed telecommunications networks and in the case of those Member States where network development is still underway.

Both directives allow Member States either to fund universal service through an independent universal service fund at a national level or through a system of supplementary charges paid to an operator providing universal service in addition to interconnection payments. The Commission will provide further detail on approaches to costing and funding of universal service in a communication to be brought forward in autumn 1996.

Affordability is principally an issue to be determined at a national level, given its close links to specific national conditions, such as average incomes, cost of living, national regional development policies and the availability of special or targeted tariff schemes. At the same time, the communication indicates a number of ways in which affordability can be better guaranteed by greater payment flexibility or through the expansion of special and targeted tariff schemes currently found in all Member States.