Amended proposal for a European Parliament and Council directive on the application of open network provision (ONP) to voice telephony and on universal service for telecommunications in a competitive environnment (replacing European Parliament and Council Directive 95/62/EC)
Date: 1997-06-04
Institutions: European Commission
Subjects: competition, liberalisation of the market, telecommunications, telephone, transmission network

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  04.06.1997 
COM(97)  287  final 

96/0226  (COD) 

Amended proposal  for a 

EUROPEAN  PARLIAMENT  AND  COUNCIL  DIRECTIVE 

on the application of open network provision (ONP) to voice telephony 
and on universal service for telecommunications in a competitive environment 
(replacing European Parliament and Council Directive 95/62/EC) 

(presented by the Commission  pursuant to  Article  189  a (2) 
of the EC-Treaty) 

EXPLANATORY  MEMORANDUM 

The Commission hereby presents a modified proposal for a European Parliament and 
Council Directive on the application of open network provision (ONP) to voice telephony 
and on universal service for telecommunications in a competitive environment (replacing 
European Parliament and Council Directive 95/62/EC). 
The modified proposal incorporates those amendments proposed by the European 
Parliament at First Reading which were accepted by the Commission. 

1. Introduction 

a) Background 

The Commission adopted its proposal on 11.9.19961, and it was formally transmitted 
to the EP and the Council on 5.11.1996. 

The Economic and Social Committee gave a favourable Opinion on 27.2.19972. 
The European Parliament adopted a favourable Resolution at its First Reading on 
20.2.1997, and proposed 34 amendments to the Commission proposal3. 

b) Purpose of the Directive 

The aim of the Commission proposal is to replace the existing European Parliament and 
Council Directive 95/62/EC on the application of open network provision (ONP) to voice 
telephony4. 
The adaptation is being made in view of the liberalisation of public voice telephony services 
by 1st January 1998 (with transition periods for certain Member States), in accordance with 
Commission Directive 96/19/EC5. 

The purpose of the adaptation is two-fold: firstly it is necessary to adapt the Directive to a 
competitive environment and, in particular, to be more specific as to whom the provisions 
of the Directive will apply in a market with many players; secondly the Directive is being 
strengthened in the area of universal service, in line with the position expressed in the 
Commission Communication on universal service for telecommunications6. 
The adaptation is consistent with the Common Position adopted by the Council on the 
European Parliament and-Council Directive 97/. ./EC on interconnection in telecommuni 
cation7, which lays down that only the provision of a fixed public telephone network and 
fixed public telephone service can be financed by a universal service financing scheme. 

1 COM(96) 419, OJ C 371, 9.12.1996,  p. 22 
2TRA/324 
3  A4-0049/97, PV  20.2.1997 
4O J L 3 2 1,  30.12.1995, p. 6 
5O J L 7 4,  22.3.1996,  p. 13 
6COM(96)73,  13.3.1996 
7  OJ C 220, 29.7.96, p. 13 

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2. EP  amendments  accented  by the  Commission 

Of the 34 amendments adopted  by the European  Parliament  at First Reading, the 
Commission  accepted  19 in full,  in part or in principle (i.e. with some  reformulation 
of the text). 

Amendments accepted  in full,  in part or in principle: 
2, 3, 5, 8,  10,  13, 14,  17, 19, 20, 22, 25, 29, 30, 31, 33, 35, 41, 51 

The Commission accepted those amendments which: 

•  help to more clearly specify  the scope of universal  service and improve consumer 

protection  [amendments 3,  10 (parts),  19, 20, 22 (parts), 29, 35 and 41]; 

•  bring the text in line with Community law, in particular the data protection  Directive 

and the interconnection Directive [amendments  17 and 33]; 
improve the clarity of the text [amendments 2 (parts), 5, 8 (parts), 25 and 31]. 

• 

In addition, the Commission agreed with the EP on the principles underlying the  following 
amendments: 
•  Amendment  13 (parts): geographic  segmentation 
•  Amendment  14: reports on tariff  evolution 
•  Amendment  30: number portability 
•  Amendment  51: consultation  of interested  parties 

In its modified  proposal, the Commission has taken.over amendments  13, 19, 29, 35 and 51 
in the relevant  recitals rather than as changes to the Articles. 

3. Amendments  not  accepted  by the  Commission 

The reasons which led the Commission not to accept  a number of the amendments (or parts 
of them) proposed by the European Parliament  are given below, grouped  into 4 categories. 

Scope of universal  service, financing  schemes  and  contributors 
[amendments 3 (parts), 7,  10 (parts), 22 (parts), 46 and  50] 

Universal  service as defined  in this proposal  is indeed  a minimum set of services, and 
Member  States may be allowed to set additional  requirements as long as they do not 
increase contributions from  market players to the cost  of universal  service. However,  the 
Commission  is not able to accept  those amendments which could  lead to any change of the 
scope of universal  service as already agreed by the EP and the Council, nor to the cost of 
universal  service becoming excessively high. Provision of terminal equipment for  disabled 
users, or public access to the information  society are an important  issue, but these social 
needs should  be-met by other means, and not by including them within the scope of 
universal service. 

The interconnection Directive also lays down principles for financing universal service, and 
the Commission does not accept the need to address that issue in this Directive. 

Price regulation, tariff monitoring  and  European  guidelines  for  affordability 
[amendments 2 (parts),  13 (parts), 44 and 45] 

This Directive does not seek to change the existing situation, whereby Member  States 
are free to have or not to have uniform  prices throughout  their territory. Therefore  the 
first part of amendment 2 is not accepted. However unbalanced  prices distort  competition, 
and there are better methods of protecting vulnerable users, such as targetted  tariff  v 
schemes. 
Art. 4 of the Directive does foresee the possibility  for  implementation  of price caps or 
other similar schemes in order to prevent  any excessive price rises for  residential users. 
But they will not be necessary in all cases and therefore  should not be made obligatory 
(amendment  13). 
Member  States must publish regular reports on tariffs  which the Commission will 
monitor, taking actions if needed. Common rules are not  considered  necessary 
(amendment 45). 
In accordance with the principle of subsidiarity,  the criteria to calculate  affordability 
are also to be determined  at a national level. Considering the very different  national 
or regional conditions throughout  the Union, it does not seem appropriate to aim at 
providing Europe-wide measures in this area (amendment  2, second  part; amendment 44). 

Consistency with other Directives 
[amendments 8 (parts),  16, 18, 32, 37 and 47] 

The issues concerning entries in directories (amendments  16,  18 and 47) are already dealt 
with by the Directive concerning the processing of personal data and the protection  of 
privacy in the telecommunications  sector, in particular in the integrated  services digital 
network (ISDN) and in the public digital mobile networks. 
The definition  of universal service has already been agreed  in the interconnection  Directive 
(amendment  8). The restriction  for NRAs to intervene only in case of failure  of commercial 
negotiations (amendment  32) is inconsistent  with the line taken  in the context  of the inter 
connection Directive. 
The concept  of a dispute resolution  procedure the Parliament wants to introduce in amend 
ment 37 is inconsistent  with the procedures in Directives 92/44/EEC on ONP leased lines 
and 95/62/EC on ONP voice telephony, both approved  by EP. 

Other  amendments 

•  Amendment  12 reformulates  the Commission  text without  improving it. 
•  Amendment  24 is already covered  by Art. 26. 
•  Amendment  28 would be inconsistent with the aims of Art.  12(4). 
•  Amendment  36 introduces  some rather unclear concepts concerning the non-payment  of 

bills, which do not seem to improve the text of Art. 21. 

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Amendment 52 foresees mandatory publication of quality of service targets which does 
not seem absolutely necessary. 

4,  Conclusion 

The Commission has accepted  19 of the 34 amendments proposed by the European 
Parliament at First Reading either in whole, in part or in principle. 

In accordance with Article  189a paragraph 2 of the EC Treaty, the Commission amends its 
initial proposal, incorporating these amendments. 

Amended  proposal  for  a 

EUROPEAN  PARLIAMENT  AND  COUNCIL  DIRECTIVE 

on  the  application  of  open  network  provision  (ONP)  to voice  telephony 
and  on  universal  service  for  telecommunications  in  a competitive  environment 
(replacing  European  Parliament  and  Council  Directive  95/62/EC) 

Original  text 

Amended 

text 

Recital  4 
(based  on  EP  amendments  2 and  13) 

4. Whereas the basic universal service requirement 
is to provide users on request with a connection to 
the fixed public telephone network at a fixed 
location, at an affordable  price; whereas there 
should be no constraints on the technical means by 
which the connection is provided, allowing for wire 
or wireless technologies; whereas affordability  is a 
matter to be determined at national level in the light 
of specific national conditions, including town and 
country planning aspects; whereas the  affordability 
of telephone service is related to the  information 
users receive about telephone usage expenses as 
well as the relative cost of telephone usage 
compared to other services; 
Whereas tariff  rebalancing is leading to a move 
away from  uniformly  low and non cost-oriented 
tariffs;  whereas until competition  is  effectively 
established safeguards  may be necessary to ensure 
that price increases in remote or rural areas are not 
used to compensate for losses in revenue resulting 
from  price decreases elsewhere; whereas price caps 
and similar schemes may be used to ensure that the 
necessary rebalancing does not affect  users 
adversely, and that the differences  between prices in 
high cost areas and prices in low cost areas do not 
endanger the affordability  of telephone services; 

4. Whereas the basic universal service  requirement 
is to provide users on request with a connection to 
the fixed public telephone network at a fixed 
location, at an affordable  price; whereas there 
should be no constraints on the technical means by 
which the connection is provided, allowing for wire 
or wireless technologies; whereas affordability  is a 
matter to be determined at national  level in the light 
of specific national conditions, including town and 
country planning aspects; whereas the  affordability 
of telephone service is related to the  information 
users receive about telephone usage expenses as 
well as the relative cost of telephone usage 
compared to other services; 
Whereas tariff  rebalancing is leading to a move 
away from  uniformly  low and non cost-oriented 
tariffs;  whereas until competition  is  effectively 
established safeguards  may be necessary to ensure 
that price increases in remote or rural areas are not 
used to compensate for losses in revenue resulting 
from  price decreases elsewhere; whereas  tariff 
rebalancing is an essential feature  of a competitive 
market; whereas, however, price caps and similar 
schemes, possibly based on geographic 
segmentation, may be used to ensure that the 
necessary  rebalancing does not affect  users 
adversely, and that the differences  between prices in 
high cost areas and prices  in low cost areas do not 
endanger the affordability  of telephone services; 

Original text 

Amended text 

Recital 5 
(based  on EP amendment 3) 

5. Whereas the importance of the telephone network 
and service is such that it should be available to 
anyone reasonably requesting it; whereas in 
accordance with the principle of subsidiarity, it is 
for Member States to decide which organisations 
have the responsibility for providing the various 
elements of the universal service for 
telecommunications as defined in this Directive; 
whereas corresponding obligations could be 
included as conditions in authorisations to provide 
voice telephony services; whereas only the net cost 
of obligations covered in this Directive should be 
shared under a universal service financing scheme; 

5. Whereas the importance of the telephone network 
and service is such that it should be available to 
anyone reasonably requesting it; whereas in 
accordance with the principle of subsidiarity, it is 
for Member States to decide on the basis of 
objective and non-discriminatory criteria which 
organisations have the responsibility for providing 
the various elements of the universal service for 
telecommunications as defined in this Directive, 
taking into account the ability of organisations to 
provide all or part of these elements: whereas 
corresponding obligations could be included as 
conditions in authorisations to provide voice 
telephony services; whereas only the net cost of 
obligations covered in this Directive should be 
shared under a universal service financing scheme; 

Recital 6a (new) 
(based  on EP amendment  41) 

6a. Whereas, where telephone directories are 
provided free of charge to subscribers, subscribers 
who are blind or partially sighted should be granted 
free access to directory enquiry services, in order to 
guarantee equal access for all users to published 
directory information: 

Recital 7a (new) 
(based  on EP amendments  19 and 29) 

7a. Whereas the publicly available telephone 
service is of particular importance to blind and 
partially sighted people; whereas organisations 
providing publicly available telephone services 
should take into account their needs bv offering the 
possibility of having bills in suitable alternative 
formats, and where appropriate provide publicly 
accessible text telephones for deaf and hearing-
impaired people; 

Original text 

Amended text 

Recital 8 
(based on EP amendment 51) 

8. Whereas quality and price are key factors in a 
competitive market, and national regulatory 
authorities should be able to monitor achieved 
quality of service and take appropriate corrective 
measures where necessary; whereas these powers 
are without prejudice to the application of 
competition law by national and Community 
authorities; 

8. Whereas quality and price are key factors  in a 
competitive market, and national regulatory 
authorities should be able to monitor achieved 
quality of service for fixed public telephone services 
and take appropriate corrective measures where 
necessary; whereas transparency of network 
interface specifications is a prerequisite for a 
competitive market in terminal equipment: whereas 
the national regulatory authority should consult the 
interested parties, and especially terminal 
equipment suppliers and the representatives of the 
users and consumers, on the changes in existing 
network interface specifications: whereas these 
powers are without prejudice to the application of 
competition law by national and Community 
authorities; 

Recital 11 
(based on EP amendment 35) 

11. Whereas certain prior obligations concerning 
tariffs and cost accounting systems will no longer 
be appropriate once competition is introduced, and 
others can be relaxed by the competent national 
regulatory authority as soon as competition 
achieves the desired objectives; whereas in all cases 
the non-discrimination requirements of the 
competition rules of the Treaty apply; 

11. Whereas certain prior obligations concerning 
tariffs and cost accounting systems will no longer 
be appropriate once competition is introduced, and 
others can be relaxed by the competent national 
regulatory authority as soon as competition 
achieves the desired objectives; whereas in all cases 
the non-discrimination requirements of the 
competition rules of the Treaty apply; 
Whereas price transparency should guarantee that 
residential subscribers do not subsidise discounts to 
industrial customers: whereas Member States 
should ensure that there is consultation before the 
introduction of the different  discount schemes: 

8-

Original  text 

Amended 

text 

Recital  14 
(based  on  EP  amendment  5) 

14. Whereas in view of the forecast  convergence of 
fixed and mobile telephone services, the 
applicability of the Directive with respect to mobile 
services should be re-examined when the Directive 
is reviewed; whereas the review date of 31 
December  1999 will allow for a coordinated  review 
of all the ONP Directives in the light of experience 
with the liberalization of public telecommunications 
networks and voice telephony services; 

14. Whereas in view of the forecast  convergence of 
fixed and mobile telephone services, the extent to 
which the Directive is applicable with  respect to 
mobile services should be re-examined when the 
Directive is reviewed: whereas the review date of 31 
December  1999 will allow for a coordinated  review 
of all the ONP Directives in the light of experience 
with the liberalization of public  telecommunications 
networks and voice telephony services; 

Article  2(2),  indent  7 
(based  on  EP  amendment  8) 

"national regulatory authority" means the body 
or bodies in each Member State, entrusted by that 
Member State, inter alia, with the regulatory 
functions  addressed in this Directive; 

- "national regulator}' authority" means the body or 
bodies in each Member State, as described in 
Directive 97/  /EC amending  Directives 
90/387/EEC and 92/44/EEC  0)  for the purpose 
of adaptation to a competitive environment in 
telecommunications, entrusted by that  Member 
State, inter alia, with the regulatory  functions 
addressed  in this Directive; 

(')OJL  165. 19.6.1992. p. 27 

Article  3, second  paragraph 
(based  on  EP  amendment  10) 

Where these services cannot be commercially 
provided on the basis of conditions laid down by the 
Member State, Member States may set up universal 
service schemes for the shared financing  of these 
services, in conformity  with Community law. 

Where these services cannot be commercially 
provided on the basis of conditions  laid down by the 
Member State, Member States may set up a 
universal  service financing  scheme, in conformity 
with Community  law. 

Member  States mav to some extent  impose 
additional  universal  service requirements. Such 
additional  requirements mav not, under anv 
circumstances whatever, have an impact on the 
costing of universal  service provision as laid down 
in Community  law and mav not be financed  from  a 
mandatory contribution bv market plavers. 

-9 

Original text 

_ _ _ _ __ 

Amended text 

Article 4(2) 
(based  on EP amendment  14) 

2. Member States shall publish regular reports on 

the evolution of tariffs. 

2. Member States shall publish regular reports on 
the evolution of tariffs. The Commission shall 
publish regular reports on the evolution of tariffs 
throughout the European Community. 

Article 6(1) (b) 
(based on EP amendment  17) 

(b) directories of all subscribers who consent to be 
listed, including fixed and personal numbers, are 
available to users in printed and where 
appropriate, electronic form, and updated on a 
regular basis; 

fixed 

(b) directories of all subscribers who have not 

expressed opposition to being listed, including 

and personal numbers, are available to 

users in printed and where appropriate, 
electronic form, and updated on a regular basis; 

Article 7(2) 
(based on EP amendment  20) 

2. Member States shalh-ensure that it is possible to 
make emergency calls from public payphones 
using the single European emergency call number 
'112* referred to in Decision 91/396/EEC, and 
other national emergency numbers, all free of 
charge. 

2. Member States shall ensure that it is possible to 
make emergency calls from public payphones 
•*  and where they exist public pav text telephones 

using the single European emergency call number 
'112' referred to in Decision 91/396/EEC, and 
other national emergency numbers, all free of 
charge and without having to make use of coins 
or cards. 

Article 9 (b) 
(based  on EP amendment 22) 

(b) access operator assistance services, and 

(b) access operator assistance services at a 

directory enquiry services in accordance with 
Article 6; 

reasonable price, and directory enquiry services 
in accordance with Article 6; 

Article  10(2), second  subparagraph  a and b  (new) 
(based  on EP amendment  25) 

Alterations mav be called for insofar as thev 
concern the protection of the rights of users and/or 
subscribers as foreseen bv this Directive. 

The Commission shall ensure that the alterations 
called for do not interfere with fair competition on 
the market. 

-  10 

Original text 

Amended text 

Article  15(4) (new) 
(based  on EP amendment  30) 

4. Where the facility of number portability, as 

referred to in Article  12(5) of Directive 97/  /EC 
on interconnection in telecommunications with 
regard to ensuring universal service and 
interoperability through application of the 
principles of open network provisionvis not vet in 
use, national regulatory authorities shall ensure 
that for a reasonable period after a subscriber 
has changed supplier either a telephone call to his 
old number can be re-routed to his new number 
or callers are given at no additional cost to them 
an indication of the new number. 

National regulatory authorities shall ensure that 
any fees for such re-routing of calls are 
reasonable. 

Article  16(1) 
(based  on EP amendment  31) 

1. National regulatory authorities shall ensure that 
the organisations with significant market power 
in the provision of fixed public telephone, 
networks deal with reasonable requests from 
organisations providing telecommunications 
services for access to the fixed public telephone 
network at network termination points other than 
the commonly provided network termination 
'points referred to in part 1 of Annex II. 

1. National regulatory authorities shall ensure that 
the organisations with significant market power 
in the provision of fixed public telephone 
networks deal with reasonable requests from 
organisations providing telecommunications 
services for access to the fixed public telephone 
network at network termination points other than 
the commonly provided network termination 
points referred to in part  1  of Annex II. This 
obligation mav only be limited if there are 
technically and commercially viable alternatives 
to the special access requested, and if the 
requested access is inappropriate in relation to 
the resources available to meet the request. 

11 

Original text 

Amended text 

Article  16(9) 
(based  on EP amendment  33) 

Details of agreements for special network access 
shall be made available to the national regulatory 
authority upon its request. 

9. Details of the agreements for special network 

access referred to in paragraph 3 shall be made 
available to the national regulatory authority 
upon its request and mav be made available on 
request to interested parties, with the exception 
of those parts which deal with the commercial 
strategy of the parties. 

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ISSN 0254-1475 

COM(97) 287 final 

DOCUMENTS 

EN 

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Catalogue  number  :  CB-CO-97-276-EN-C 

ISBN 92-78-21165-6 

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