Opinion of the Economic and Social Committee on the ' Proposal for a European Parliament and Council Directive amending Council Directives 90/387/EEC and 92/44/EEC for the purpose of adaptation to a competitive environment in telecommunications'
Date: 1996-04-25
Institutions: European Economic and Social Committee
Subjects: approximation of laws, competition law, harmonisation of standards, telecommunications, transmission network













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51996AC0529

Opinion of the Economic and Social Committee on the ' Proposal for a European Parliament and Council Directive amending Council Directives 90/387/EEC and 92/44/EEC for the purpose of adaptation to a competitive environment in telecommunications'  


Official Journal C 204 , 15/07/1996 P. 0014 





Opinion of the Economic and Social Committee on the 'Proposal for a European Parliament and Council  Directive amending Council Directives 90/387/EEC and 92/44/EEC for the purpose of adaptation to a  competitive environment in telecommunications` ()(96/C 204/05)On 28  March 1996, the  Council decided to consult the Economic and Social Committee, under Article  100a of the Treaty  establishing the European Community, on the above-mentioned proposal. The Section for Transport and Communications, which was responsible for preparing the Committee's  work on the subject, adopted its Opinion on 10  April 1996. The Rapporteur was Mr von Schwerin. At its 335th Plenary Session (meeting of 25  April 1996), the Committee adopted the following  Opinion by 99 votes to two with 13 abstentions. 1. Introduction1.1. The EU's policy on open network provision (ONP) is based on Article   7a of the Treaty establishing the European Community, which regulates the freedom to provide  services. 1.2. The Commission Green Paper of 30  June 1987 on telecommunications services and equipment  introduced open network provision (ONP) as a policy concept. 1.3. This policy concept was implemented by Council Directive 90/387/EEC of 28  June 1990 on the  establishment of the internal market for telecommunications services through the implementation of  open network provision (). 1.4. The ONP Directive on leased lines (Council Directive 92/44/EEC of 5  June 1992 on the  application of open network provision to leased lines () and the proposal for a Directive on voice  telephony () lay down minimum conditions for the provision of a minimum set of services for all  users in the EU. 1.5. The recommended conditions are specified in two ONP Recommendations (Recommendation 92/382/EEC  of 5 June 1992 on the harmonized provision of a minimum set of packet-switched data services (),  and Recommendation 92/383/EEC of 5  June 1992 on the provision of harmonized ISDN access  arrangements and a minimum set of ISDN offerings (). 1.6. A group of top industrialists convened by Commissioner Bangemann presented the Corfu European  Council meeting of 24 and 25  June 1994 with a report entitled 'Europe and the global information  society` in which the interconnection of networks and interoperability of services and applications  was regarded as a priority EU objective. 1.7. The Commission communication on Europe's way to the information society - an action plan  (COM(94) 347 final) emphasizes the importance of the ONP policy in connection with the introduction  of competition in the EU. 2. Commission proposal for a European Parliament and Council Directive amending Directive  90/387/EEC for the purpose of adaptation to a competitive environment in telecommunications2.1.  General comments on the amendment of Directive 90/387/EEC2.1.1. The Economic and Social Committee  recognizes the importance of the ONP provisions and the need to amend Directive 90/387/EEC because  of changes in the competitive environment. The Committee stresses that ONP is vitally important for  developing economic activity in Europe, for improving European industry's competitiveness, for  safeguarding and creating jobs and for furthering consumer interests, not only in urban areas but  also in rural and thinly populated areas. 2.1.2. The Council has set 1  January 1998 as the date on which all telecommunications networks and  services are to be liberalized (albeit with transitional periods for some Member States).  Consequently the aim of the Commission proposal is to update the framework ONP Directive  90/387/EEC. 2.1.3. The proposed Directive expressly states that the national regulatory authorities must be  independent. Accordingly, Member States holding a stake in a telecommunications organization or  exercising a significant degree of control over such an organization have to ensure that the  regulatory functions are effectively separated from activities associated with ownership or  control. 2.2. Specific comments2.2.1. Article  1 of Directive 90/387/EEC2.2.1.1. The Committee welcomes  the extension of the framework Directive's objectives. It thinks, however, that the second indent  of Article  1(3) should read as follows: '- ensuring the availability of good quality services at realistic prices,`. 2.2.1.2. The prices and charges for the universal service have an all important role to play in  connection with the launch of the information society. Therefore, the framework Directive should  take account of the social aspects of telecommunications. 2.2.2. Article  2 of Directive 90/387/EEC2.2.2.1. The Committee would urge the Commission to  reconsider and clarify its definitions of 'public` and 'universal service`. 2.2.2.2. The definition of 'public` must distinguish closed user groups and corporate networks. The  Commission drew attention to this in its communication to the European Parliament and the Council  on the status and implementation of the services Directive (), in which it defined 'for the public`  as follows: 'a service for the public is a service available to all members of the public on the  same basis`. This view is shared by the Committee. 2.2.2.3. The ESC considers the universal service to be a key factor in connection with tomorrow's  information society. The form taken by the universal service will help to shape our working and  living conditions, the type and level of employment, the ability of European firms to innovate and  hence Europe's position as a centre of economic activity. 2.2.2.4. Users expect a comprehensive universal service which is developed according to their  needs, which takes account of the development of society in Europe and which does not merely  provide a minimum standard. Apart from furnishing a modern definition of universal services as they  stand at present, it is necessary to continually develop the universal services on offer within the  framework of a dialogue between the different groups in society. The definition of universal  service should be expanded accordingly. 2.2.3. Article  5a of Directive 90/387/EEC2.2.3.1. The Committee expressly welcomes the principle  that regulator and operator functions are to be kept separate. In accordance with the principle of  subsidiarity, the national regulatory authorities have an essential role to play in implementing  the EU's liberalization policy. This means that the Commission has to urge the Member States to  provide the national regulatory authorities with the financial, material and human resources which  they require for the performance of their duties. 3. Commission proposal for a European Parliament and Council Directive amending Directive  92/44/EEC for the purpose of adaptation to a competitive environment in telecommunications3.1.  General comments3.1.1. This proposal also makes amendments to existing ONP provisions, bringing  them into line with the liberalized environment that is to apply from 1998. The Committee endorses  this policy, with due regard to the Council Resolution of 18  September 1995 on the implementation  of the future regulatory framework for telecommunications (). 3.1.2. According to the revised Directive on leased lines, all users are to have access to a  minimum set of leased lines from at least one operator. The Commission proposal stipulates that  obligations are to be imposed only on operators with significant market power. 3.1.3. The tariff principles are also to be changed. The principle of cost orientation is to be  relaxed for the provision of leased lines once the market becomes competitive. 3.2. Specific comments3.2.1. Tenth recital3.2.1.1. An organization with a 25 % market share  within the territory of a Member State in which it operates is assumed to enjoy significant market  power. The former monopolies will fall into this category indefinitely. The Committee thinks that  the Commission's approach contradicts its ways of thinking on competition. The figure used as the  basis for the Commission's assumption is not a suitable dividing line. 3.2.2. Article  1 of Directive 92/44/EEC3.2.2.1. The Committee thinks that it is the Commission's  task to establish and develop the rules and regulations which guarantee the efficient transmission  of information at low cost throughout the area covered. Initially this will depend on the creation  of conditions which permit fair competition. Thus, the Commission quite rightly stressed in Part II  of its Green Paper (COM(94) 682 final) that 'open access to the facilities of public  telecommunications infrastructure providers will be fundamental in establishing an effective,  competitive environment for telecommunications infrastructure and services within the Information  Society`. 3.2.2.2. The Committee thinks, however, that competition cannot ultimately be fair unless all  providers of telecommunications infrastructure have the same rights and obligations in proportion  to their area of activity. In accordance with the principle of equal treatment, this Directive  should also apply to organizations without significant market power. This is the only way to  translate into reality the Commission's underlying belief that there must be competition. 3.2.2.3. Member States in which liberalization has already been introduced either in full or in  part need not withdraw measures if they conform with the legal provisions of the EU. 3.2.3. Article  10 of Directive 92/44/EEC3.2.3.1. In the Committee's opinion the cost orientation  principle must be applied flexibly. Thus, the Commission could consider rebates or concessionary  tariffs for certain purposes or certain groups where it was in the public interest. 4. Conclusions4.1. The Committee recognizes that Directives 90/387/EEC and 92/44/EEC need to be  amended, and agrees in the main with the Commission proposals. However, it would be pleased if the  Commission could take account of the proposals and comments made in the present Opinion. 4.2. The Committee thinks that if competition is to be safeguarded and the rules governing  competition applied in full, the ONP provisions must be binding on all providers in order to ensure  equal opportunity and the existence of proper competition. Done at Brussels, 25  April 1996. The Presidentof the Economic and Social CommitteeCarlos FERRER() OJ No C 62,  1. 3. 1996, p. 3.  () OJ No L 192, 24. 7. 1990.  () OJ No L 165, 19. 6. 1992.  () OJ No C 122, 18. 5. 1995.  () OJ No L 200, 18. 7. 1992.  () OJ No C 258, 3. 10. 1995.  () Communication by the Commission to the European Parliament and the Council on the status and  implementation of Directive 90/388/EEC on competition in the markets for telecommunications  services (OJ No  C 275, 20. 10. 1995, p.  2).