WRITTEN QUESTION E-2688/97 by W.G. van Velzen (PPE) to the Commission (1 September 1997)

Subject: Legislation on telecommunications

The European telecommunications sector is currently preparing for full liberalization on 1 January 1998. I would ask the Commission to give detailed answers to the following questions and to throw light on any obscure aspects of legislation or the communication on access.

1. During conciliation on the interconnection directive the European Parliament had a long discussion with the Council of Telecommunications Ministers about the definition of 'interconnection'. Parliament's aim was to offer (new) service providers access to telecommunications networks (including non-standard network points). However, many access problems have now arisen, the sector being uncertain whether an access problem must be qualified as interconnection or special network access. Can the Commission state precisely and in detail what, in its view, is the difference between 'special network access' and 'interconnection', which articles in the legislation and competition rules in the Treaty are relevant and precisely what, in its view, is the legal consequence of qualification as special market access and/or interconnection (and above all the differences of legal consequence)?

2. Can the Commission say precisely what is meant by point 93 in conjunction with endnote 68 of its communication on the application of the competition rules to access agreements in the telecommunications sector ((OJ C 76, 11.3.1997, p. 9. ))? Clarification of this question is, after all, crucial for decisions on investment in infrastructure by telecommunications firms. To what extent is discrimination in pricing permitted when the capacity of infrastructure is underutilized? And what criteria are applied in this respect? What view does the Commission generally take of firms which have invested in infrastructure and claim exclusive rights?

3. According to the aforementioned communication, there are two markets for access: the 'end-user market' and the market for 'access to facilities' (Part II). Can the Commission state rather more clearly what it understands by 'specific product market' so that the sector may be surer about market definitions?

Answer given by Mr Bangemann on behalf of the Commission (2 October 1997)

1. Interconnection is defined in Article 2(1) of Directive 97/33/EC on interconnection in telecommunications with regard to ensuring universal service and interoperability through application of the principles of open network provision (ONP) ((OJ L 199, 26. 7.1997. )). This definition states that interconnection refers to the linking of telecommunications networks. Recital 4 of the Directive clarifies, firstly, that the Directive covers those situations where the interconnected networks are used for the commercial provision of publicly available telecommunications services, and secondly, that the interconnected networks may be owned by the parties involved or may be based on leased lines or transmission capacity not owned by the parties involved.

According to Article 7(3) of the Interconnection directive, fixed network operators with significant market power must publish terms and conditions, including tariffs, for their interconnection offerings. Different terms and conditions may be applied to different categories of organisation, where such differences can be objectively justified, but the terms and conditions must be applied in a non-discriminatory manner (Article 6). The interconnection tariffs must be cost-oriented.

2. Special network access is referred to in Article 9 of Directive 95/62/EC on the application of ONP to voice telephony ((OJ L 321, 30.12.1995. )) (this Article is retained as Article 16 in the draft revision of this Directive ((OJ C 234, 1. 8.1997. )), currently in co-decision procedure). Special network access is designed to encourage innovation and new applications, as explained in recital 20 of Directive 95/62/EC. Special network access may be requested by any type of telecoms service provider, whether or not they are operating a telecoms network, and whether they are offering public or private telecommunications services.

Organisations with significant market power must deal with reasonable requests for special network access from telecoms service providers. Unlike interconnection, special network access is not a standard offering with published tariffs. It is an individually negotiated type of network access which can be requested by a telecoms service provider if the commonly provided forms of network access are not suitable. Tariffs for special network access granted by organisations with significant market power must be cost-oriented.

3. The communication of the Commission of 10 December 1996'draft notice on the application of the competition rules to access agreements in the telecommunications sector' was published for consultation of all interested parties. The issues raised in points 2 and 3 of the question of the Honourable Member will, as far as necessary, be further specified in the final wording of the communication, which the Commission is currently finalising.