Opinion of the Committee of the Regions on: the Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions, on the Fifth Report on the implementation of the Telecommunications Regulatory Package
Date: 2000-04-13
Institutions: European Committee of the Regions
Subjects: application of EU law, communications industry, competition law, telecommunications

C 226/56

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Official Journal of the European Communities

8.8.2000

Opinion of the Committee of the Regions on:

— the ‘Communication from the Commission to the European Parliament, the Council, the
Economic and Social Committee and the Committee of the Regions’, on the ‘Fifth Report on
the implementation of the Telecommunications Regulatory Package’, and

— the ‘Communication from the Commission to the Council, the European Parliament, the
Economic and Social Committee and the Committee of the Regions: Towards a new
framework for electronic communications infrastructure and associated services — the 1999
Communications Review’

(2000/C 226/15)

THE COMMITTEE OF THE REGIONS,

having regard to the Communication from the Commission to the European Parliament, the Council, the
Economic and Social Committee and the Committee of the Regions on the ‘Fifth Report on the
Implementation of the Telecommunications Regulatory Package’,
(COM(1999) 537 final) and the
Communication from the Commission to the Council, the European Parliament, the Economic and Social
the Regions on ‘Towards a new framework for Electronic
Committee and the Committee of
Communications infrastructure and associated services — The 1999 Communications Review’,
(COM(1999) 539 final);

having regard to the decision by the Commission on 15 November 1999, acting under the first paragraph
of Article 265 of the Treaty establishing the European Community, to consult the Committee of the
Regions on the matter;

having regard to the decision taken by its bureau on 2 June 1999 to instruct Commission 3 for Trans-
European Networks, Transport and Information Society to prepare an opinion on the subject;

having regard to the draft opinion (CdR 520/99 rev. 1) adopted by Commission 3 on 4 February 2000
(rapporteur: Mr Koivisto FIN, PSE),

adopted the following opinion at its 33rd plenary session on 12-13 April 2000 (session of 13 April).

1. The purpose of the communications

b) Towards a new framework for Electronic Communications

infrastructure and associated services

a) The Fifth Report on the Implementation of the Telecommuni-

cations Regulatory Package

1.1.

The communication

— examines the implementation of existing telecommuni-

cations regulations in the Community;

— analyses how national regulations are implemented in

practice;

— provides an overview of the development of telecommuni-

cations markets;

— summarises the main obstacles to the implementation of

the single market;

— provides starting points for the review of

the entire
regulatory framework for communications, but telecom-
munications in particular.

The communication presents a review of EU regulation
1.2.
in telecommunications, and proposes the main elements for
a new framework for communications infrastructure and
associated services.

2. The opinion of the Committee of the Regions; the
general situation with regard to telecommunications
markets

The Committee of the Regions agrees with the general
2.1.
policy objectives presented by the Commission, the principles
behind regulatory action, and the structure of
the new
regulatory framework. In particular, the Committee of the
Regions endorses the Commission’s view that the new frame-
work must seek to increase competition in all market segments,
particularly at local and regional level.

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2.2.
The Committee of the Regions also agrees with the
principles underlying the two communications, namely that
the new regulatory framework should be designed to cater for
new, dynamic and largely unpredictable markets with many
more players than at present.

2.3.
Like the Commission, the Committee of the Regions
wishes to stress that the new framework must be much more
flexible than before and broader in scope in order to be able
to adapt to rapid and unpredictable technological and market
changes, which have an impact on all other sectors of society.

areas which, on account of their market structure, require a
different approach. For example, various local authorities
across Europe — the best and most widely known example
probably being the city of Stockholm — have, through their
own efforts or by other means, acquired an often quite
extensive broadband telecommunications cable network,
which has then been available in practice for network equip-
ment and services to all businesses. In such cases, although in
one respect a kind of monopoly prevails,
the common
European objectives are generally achieved more effectively
from the point of view of
the user with regard to the
breadth of service provision and value for money than in the
competition situations envisaged by the two communications.

2.4.
The Committee of the Regions commends the fact that
the Fifth Report takes the regional dimension into account
more clearly when considering the consequences of legislation
on service access and pricing.

2.8.
In view of the situation described above, the Committee
of the Regions hopes that the Commission will seek to make a
clearer market distinction between cable and other equivalent
infrastructure services on the one hand, and actual consumer
services on the other.

2.5.
The Committee of the Regions wishes to draw the
Commission’s attention to the fact that, in many Member
States, the regional competition described in the Fifth Report
is, in practice, purely theoretical and in reality, particularly in
the most remote regions, services are provided by a single
company. The Committee of the Regions is concerned at the
rapidly widening disparities between regions and considers
that a universal service and other similar mechanisms are
excessively slow instruments for rectifying the situation in
rapidly evolving markets.

2.5 (a)
Existing research confirms that there is a clear
link between concentrations of economic activity and the
establishment of
telecommunications networks. Telecom-
munications infrastructure is thus one of the elements of
competition in attracting enterprises. It also follows that in all
likelihood differences do not exist — or will not arise — solely
between EU regions; they will also occur within regions.
Account should be taken of these factors in the formulation
of EU telecommunications policy as they have important
implications for social and economic cohesion in the EU
Member States. Furthermore, regional and local authorities
should be careful to take measures to establish the right
conditions with regard to the establishment of telecommuni-
cations networks, insofar as such measures come within their
powers.

future
The Committee of the Regions hopes that
2.6.
reports on implementing telecommunications markets might
consider actual operators located in various parts of the EU
and in different regions with different service needs, in order
to establish just how effective competition really is.

3. The opinion of the Committee of the Regions; pro-

posals for new regulatory principles

3.1. Licensing and authorisations

3.1.1.
authorisations outlined in the communication.

The regions support the principles on licensing and

3.2. Access and interconnection

In line with the above, the Committee of the Regions
3.2.1.
is doubtful as to whether the proposed measures can achieve
the general EU information society policy objectives suf-
ficiently quickly and would prefer to see a clearer market
separation between infrastructure and services.

3.2.2.
The Committee of the Regions feels it is important
that all mobile operators, and not just those with a major
market position, are subject to the obligations relating to the
freedom of choice of operator.

2.7.
The Committee of the Regions agrees with the Com-
mission’s view on the need for a broader regulatory basis for
the communications sector, but wishes to emphasise that
elsewhere within the field of telecommunications there are

The Committee of the Regions has no comments to
3.3.1.
make on the Commission position on management of radio
frequency.

3.3. Management of radio frequency

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3.4. Universal service

3.6. Numbering, naming and addressing

3.4.1.
The Committee of the Regions wishes to draw the
Commission’s attention in particular to the fact that free
competition in telecommunications does not bring equal
benefits to all regions or to all local districts within regions. In
addition, the rapid evolution in markets and technologies has
merely served to exacerbate these differences, as new services
tend to be concentrated in areas with a sufficiently large
volume of customers. The aim of universal services is to
provide universal access to the information society. The
Committee of the Regions therefore feels that the positions
presented in the communication must be regularly monitored
with regard to actual results, and constantly, pro-actively
revised in order to guarantee truly universal access. At the
same time we must guarantee, inter alia, the social, cultural
and economic development of the sparsely populated areas
and influence population stabilisation.

Contrary to the Commission’s position, the Com-
3.4.2.
mittee of the Regions feels it is important to include broadband
services within the scope of existing universal services, at least
as a political objective. Inter alia this would achieve the aim of
ensuring that the most disadvantaged regions, or at least
part of them, would not remain unconnected to the new
technologies. Otherwise they would lag even further behind
the potentially more developed regions, since they would
either lack advanced telecom services or would secure them
too late.

3.4.3.
The Committee of the Regions also wishes to draw
the Commission’s attention to the fact that users in every
region have very different needs (for example, schools, health
care, different kinds of companies and citizens). Effective
universal service criteria should also take account of users with
unusual needs.

3.4.4.
In addition to developing a universal service, the
Committee of the Regions feels that serious consideration
should be given to rapidly targeting resources, including EU
funding opportunities, towards local authorities and other
local and regional players responsible for general infrastructure
provision, so that they can, if necessary, put in place the
necessary broadband infrastructure in their own regions and
make it available to different kinds of service provider.
Naturally, particular attention should be paid in this respect to
those regions where the market does not function correctly
and funding should be provided to counter this shortfall, so as
to put them on an equal footing with other regions when it
comes to playing this new role.

3.5. The interests of users and consumers

The Committee of the Regions hopes that number
3.6.1.
portability can also be introduced as quickly as possible
between fixed and mobile communication networks.

3.7. Specific competition issues

The Committee of the Regions endorses clarification
3.7.1.
of the concepts of ‘significant market power’ and ‘dominant
position’. However, in general the situation with regard to
market position changes decisively when the focus is shifted
from the European or national level to the regional and local
one. The Committee of the Regions feels that, in essence, it
should also be possible to apply the regulations on dominant
market position in those cases where individual consumers
only have a single option for purchasing an important
communication service.

3.8.

Institutional issues

3.8.1.
In view of the convergence taking place between
different fields of communications and telecommunications,
the Committee of the Regions considers the Commission
proposal on the Communications Committee to be appropri-
ate. Indeed, the capability should be there to rapidly expand
the activities of both the Committee and the High Level Group,
if the fields converge faster than expected in the future. The
Committee of the Regions agrees with the Commission view
that no real added value would be achieved by setting up a
European regulatory authority.

The Committee of the Regions believes that the
3.8.2.
independence of national regulatory authorities is essential, as
the transition from the former state monopolies to open
competition is still ongoing in many Member States.

4. Summary

The Committee of the Regions:

— The Committee of the Regions agrees with the general
policy objectives presented by the Commission, the prin-
ciples behind regulatory action, and the structure of the
new regulatory framework. In particular, the Committee
of the Regions endorses the Commission’s view that the
new framework must seek to increase competition in all
market segments, particularly at local level.

3.5.1.
The Committee of the Regions wishes to draw the
Commission’s attention to the importance of ensuring privacy
protection in operations employing the latest mobile phone
technologies.

— The Committee feels that the views on the universal service
presented in the Communication must be applied actively
and on an ongoing basis in order to ensure the relevant
access.

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— In addition to developing a universal service, the Com-
mittee feels that serious consideration should be given to
rapidly targeting resources, including EU funding oppor-
tunities, towards local authorities and other local and
regional players responsible for general
infrastructure
provision, so that they can, if necessary, put in place the
necessary broadband infrastructure in their own regions
and make it available to different kinds of service provider.

— The Committee endorses clarification of the concepts
of ‘significant market power’ and ‘dominant position’.
However, in general the situation with regard to market
position changes decisively when the focus is shifted from

the European or national level to the regional and local
one. The Committee of the Regions feels that, in essence,
it should also be possible to apply the regulations on
dominant market position in those cases where individual
consumers only have a single option for purchasing an
important communication service.

— The Committee draws the Commission’s attention to the
importance of ensuring privacy protection in operations
employing the latest mobile phone technologies.

— The Committee hopes that number portability can be
introduced as quickly as possible between fixed and mobile
communication networks.

Brussels, 13 April 2000.

The President

of the Committee of the Regions

Jos CHABERT