WRITTEN QUESTION E-2942/98

by Carlos Carnero González (PSE) to the Commission

(8 October 1998)

Subject: Telephone charges in the Community of Madrid since the creation of a "regular area" and the impact on consumers

In recent weeks, the difference in telephone charges introduced in the Community of Madrid by the Spanish telephone company, Telefónica, has provoked indignation amongst local councils and political, social and citizens' groups, which see the move as arbitrary and highly detrimental to a large number of users. Telefónica has apparently divided the Community of Madrid into two areas - the so-called "regular Madrid area" (comprising the capital city and other towns) and the remainder of the region, which covers large towns such as Alcalá de Henares, Aranjuez and Arganda del Rey, boasting populations of 195 000, 41 000 and 30 000 respectively and sizeable industrial estates.

The main drawback to the said system from the consumer's viewpoint lies in the fact that calls made to the capital city or other towns within the "area" from outside - regardless of whether or not the point from which they are made also lies within the Community of Madrid - are considerably more expensive, since they are deemed to be long-distance calls. This unfair and arbitrary situation affects some 650 000 people and thousands of undertakings. Estimates suggest that on the basis of the rates in force, private users outside the "regular area" may pay 5 000 pesetas more per month on average than users within it, whilst undertakings in, say, Alcalá de Henares, may have to pay between two and nine times more. To add to this, the people affected are disgruntled at Telefónica's inability to provide any kind of objective explanation for its decision to introduce the said "area" and the resulting difference in charges.

1. Is the Commission aware of the aforementioned situation? If not, does it intend to take this matter up with the authorities and the Telefónica company, demand reasonable explanations from them, and contact the local councils and the organisations representing the residents and consumers of Madrid who have been affected?

2. Does it take the view that the existence of this "regular area" is detrimental to consumer rights and contravenes the relevant Community directives in force?

3. If so, will it urge Telefónica to amend its decision rapidly, with a view to restoring equal treatment for consumers and abandoning the difference in charges resulting from the creation of this "area"?

Answer given by Mr Van Miert on behalf of the Commission

(10 November 1998)

The Commission was not aware of the situation to which the Honourable Member refers in connection to the creation by Telefonica de España, S.A. of a so-called "distrito regular" in the region of Madrid.

According to the information available to the Commission, the tariffing areas in which Spain, including the region of Madrid, is divided for the purposes of basic telephony communications were established by the Spanish authorities in 1969(1). Some minor changes have been approved since then by the administration, the last affecting the Madrid area dating from 1993. The Spanish authorities have informally confirmed that the modification of the tariffing areas of the metropolitan district of Madrid is not currently envisaged. The Commission would draw the attention of the Honourable Member to the fact that Telefonica cannot create a new tariffing area without the previous approval of the Spanish authorities(2).

The Commission could only intervene regarding the creation of new tariffing areas if it had evidence that the new tariffs were not in line with the underlying costs of the service, or were contrary to Community competition law for some other reason.

At the end of July 1998, the Spanish government informed the Commission that it had authorised a number of amendments to the tariffs that Telefónica applied for the provision of basic telephony services all over Spain.

Under Community law, the Spanish government must indeed, on the one hand, authorise Telefónica to rebalance its tariffs and, on the other, monitor that these tariffs are cost-oriented. Rebalancing includes reducing the difference in the respective cost of local and interprovincial calls. Although it could imply in the short term an increase in the tariffs for local calls, the Commission expects that the introduction of full competition into the Spanish telecommunications markets, due for 1 December 1998, will lead to a progressive reduction in the overall tariffs for basic telephony services all over the country. This should address to a large extent the concern raised. The Commission notes that new entrants into the Spanish market (e.g. Retevision) have already announced tariffs lower than those of Telefonica for local phone calls.

Directive 98/10/EC(3) requests Member States to ensure that voice telephony is provided at an affordable price, but leaves the definition of what affordable tariffs are to each Member State, in the light of their specific national conditions. The Commission understands that the Spanish authorities are establishing the necessary safeguards to ensure that Telefónica offers its voice telephony services according to the criteria laid down by the Directive.

For the reasons explained above, the Commission is not, for the time being, considering taking the action mentioned by the Honourable Member.

(1) Acuerdo de la Comisión delegada para asuntos economicos de 11 de septiembre de 1969.

(2) Secretaria General de Comunicaciones, dependiente del Ministerio de Fomento.

(3) Directive 98/10/EC of the European Parliament and of the Council of 26 February 1998 on the application of open network provision (ONP) to voice telephony and on universal service for telecommunications in a competitive environment (OJ L 101, 01/04/1998 p. 24-47).