WRITTEN QUESTION E-0628/97 by Luigi Moretti (NI) to the Commission (4 March 1997)

Subject: Telecommunications

Given the combined provisions of Articles 86 and 90 of the EC Treaty;

given that, under Directive 92/44/EEC ((OJ L 165, 19.6.1992, p. 27. )), telecommunications organizations have the power to deny access to, interrupt or suspend the service on leased lines only in cases of force majeure and subject to the prior opinion of the national regulatory authority which must reach a decision as quickly as possible after consulting the users affected;

given the particular situation in Italy, where services to users have been interrupted without first obtaining the opinion of the regulatory authority;

will the Commission say:

whether Decree Law No 289/94, implementing Directive 92/44/EEC, is compatible with the general principles of the EC Treaty and the above-mentioned directive, in view of the fact that it allows the monopoly public telecommunications network operator (which is also the provider of deregulated services) to deny access to or interrupt services on leased lines following non-payment by the user of the estimated amount he or she owes, without any requirement to obtain the prior opinion of the regulatory authority, with the result that the operator can use this provision to establish a dominant position wholly to the disadvantage of its direct competitors?

Whether operations launched in Italy by the monopoly public telecommunications network operator to take over companies in the sector, acquire direct shares in the capital of these companies or take control of them indirectly, are legal, in view of the fact that no separate accounting system yet exists for the branches of the monopoly operator's companies supplying deregulated telecommunications services and that the monopoly operator now controls more than 60% of the national market?

Answer given by Mr Bangemann on behalf of the Commission (10 April 1997)

Directive 92/44/EEC on the application of open network provision to leased lines cited by the Honourable Member seeks to provide a framework under which leased lines are made available throughout the Community. Such a framework includes the conditions according to which service may be terminated or withdrawn.

Article 8 requires Member States to ensure that the national regulatory authority lays down the procedures whereby it decides, on a case by case basis and in the shortest time possible, whether to allow telecommunications organisations to take measures such as the refusal to provide a leased line, the interruption of the provision of leased lines or the reduction in the availability of leased lines features for failure to comply with the usage conditions, which would clearly include conditions relating to payment. This extends the possibility under Article 6 of the Directive to suspend or terminate service on the basis of non-compliance with essential requirements, which might indeed include situations of force majeure. The Commission is currently assessing the compatibility of the Italian situation with Community law.

Obligations concerning accounting separation are established in Directives 90/388/EEC on competition in the markets for telecommunications services ((OJ L 192, 24. 7.1990. )), 92/44/EEC and 95/62/EC on the application of open network provision (ONP) to voice telephony ((OJ L 321, 30.12.1995. )) in order to ensure a degree of transparency in the way in which operators with subsisting exclusive rights over leased lines or voice telephony services operate their businesses. Nevertheless, the existence of such separation is not a precondition for continued operation on the market, nor is it necessarily a bar to the acquisition or extension of shareholdings in companies within the sector. On the other hand, it is likely that in the absence of such separation, the relevant undertaking will be induced to cross subsidise competitive services with revenues from the currently reserved sector. Such cross subsidies are monitored on a case by case basis by European or national competition authorities, as appropriate.