WRITTEN QUESTION P-1839/00

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

(31 May 2000)

Subject: Auctioning of mobile-telephone radio frequencies

On 24 May 2000, at the hearing on the 1999 review in Parliament, Commissioner Liikanen voiced his disquiet at the considerable proceeds from the auctioning-off of UMTS frequencies in the United Kingdom. I very much share that disquiet and note that the EC can bring infringement proceedings against the United Kingdom on the basis of Article 11 of the licences directive (Directive 97/13/EC(1); see below).

1. In view inter alia of the disquiet voiced and the point made above, why does the Commission not commence infringement proceedings against the United Kingdom?

2. Is the EC ultimately prepared to commence infringement proceedings on the same grounds against the Netherlands, Germany and Denmark, which are planning to auction-off radio frequencies for UMTS usage?

(1) OJ L 117, 7.5.1997, p. 15. Article 11 Fees and charges for individual licences 1.Member States shall ensure that any fees imposed on undertakings as part of authorisation procedures seek only to cover the administrative costs incurred in the issue, management, control and enforcement of the applicable individual licences. The fees for an individual licence shall be proportionate to the work involved and be published in an appropriate and sufficiently detailed manner, so as to be readily accessible. 2.Notwithstanding paragraph 1, Member States may, where scarce resources are to be used, allow their national regulatory authorities to impose charges which reflect the need to ensure the optimal use of these resources. Those charges shall be non-discriminatory and take into particular account the need to foster the development of innovative services and competition.

Answer given by Mr Liikanen on behalf of the Commission

(4 July 2000)

The Commission is following closely the implementation of procedures in the Member States for the licensing of third generation mobile networks, including those involving the auctioning of radio frequency spectrum. It is doing so in the light of the applicable provisions of Community law, notably 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, Commission Directive 90/388/EEC of 28 June 1990, on competition in the markets for telecommunications services(1) (as amended) and Decision No 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(2), as well as

the competition rules of the EC Treaty.

In particular, Article 10(3) of Directive 97/13/EC provides that selection criteria for licensing of scarce resources such as radio frequencies should be objective, non-discriminatory, detailed, transparent and proportionate. In addition, Article 11(2) states thatmldr Member States may, where scarce resources are to be used, allow their national regulatory authorities to impose charges which reflect the need to ensure the optimal use of these resources. Those charges shall be non-discriminatory and take into particular account the need to foster the development of innovative services and competition.

Consequently, it is for Member States to determine, in accordance with the principle of subsidiarity, what procedures to follow in allocating the limited frequency spectrum available for third generation networks, provided that they comply with the principles of objectivity, non-discrimination, proportionality and transparency established by Community law. The Commission is of the view that the use of auction procedures for the allocation of radio frequencies for third generation mobile networks is not in itself contrary to those principles and cannot as such be subject to an infringement procedure. As for the need to foster the development of innovative services and competition, it depends on the economic effect of the various auction formulae used. Those depend on a number of variables (length of licence, rules for payment of licence fees, conditions for network deployment, and roaming obligations) which cannot yet be assessed. The Commission continues to monitor the licensing process in the Member States with great attention. It is particularly attentive to the need to ensure that the above-mentioned principles are respected, and is making an assessment of the economic impact of the procedures used.

(1) OJ L 192, 24.7.1990.

(2) OJ L 17, 22.1.1999.