Proposal for a Directive of the European Parliament and of the Council on universal service and users' rights relating to electronic communications networks and services
Date: 2000-07-12
Institutions: European Commission
Subjects: consumer protection, new technology, telecommunications, telephone charges, transmission network

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Official Journal of the European Communities

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Proposal for a Directive of the European Parliament and of the Council on universal service and
users’ rights relating to electronic communications networks and services

(2000/C 365 E/19)

(Text with EEA relevance)

COM(2000) 392 final (cid:15) 2000/0183(COD)

(Submitted by the Commission on 28 August 2000)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

necessary for the kind of universal service defined by the
member.

Having regard to the Treaty establishing the European
Community, and in particular Article 95 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of
Committee,

the Economic and Social

Having regard to the opinion of the Committee of the Regions,

Acting in accordance with the procedure laid down in Article
251 of the Treaty,

Whereas:

(1) The liberalisation of the telecommunications sector and
increasing competition and choice for communications
services go hand in hand with parallel action to create
a harmonised regulatory framework which secures the
delivery of universal service. The concept of universal
service must evolve to reflect advances in technology,
market developments and changes in user demand. The
regulatory framework established for the full liberalisation
of
in 1998 in the
Community defined the minimum scope of universal
service obligations and established rules for its costing
and financing.

the telecommunications market

(2) Under Article 153 of the Treaty, the Community is to

contribute to the protection of consumers.

(3) The Community and its Member States have taken
commitments on the regulatory framework of telecom-
munications networks and services in the context of the
World Trade Organisation (WTO) agreement on basic
telecommunications. Any member of the WTO has the
right to define the kind of universal service obligation it
wishes to maintain. Such obligations will not be regarded
as anti-competitive per se, provided they are administered
in a transparent, non-discriminatory and competitively
neutral manner and are not more burdensome than

(4) In a competitive market, certain obligations should apply
to all undertakings providing publicly available telephone
services at fixed locations and others should apply only to
undertakings enjoying significant market power or which
have been designated as a universal service operator.

(5) A fundamental requirement of universal service is to
provide users on request with a connection to the
public telephone network at a fixed location, at an
affordable price. The requirement is limited to a single
network connection, and does not extend to the Inte-
grated Services Digital Network (ISDN) which provides
two or more connections capable of being used simul-
taneously. There should be no constraints on the technical
means by which the connection is provided, allowing for
wired or wireless technologies, nor any constraints on
which operators provide part or all of universal service
obligations. Connections to the public telephone network
at a fixed location should be capable of supporting speech
and data communications at rates sufficient for access to
online services such as those provided via the public
Internet. The data rate that can be supported by a
single
telephone network
depends on the capabilities of the subscriber’s terminal
equipment as well as the connection. For this reason it
is not appropriate to mandate a specific data or bit rate at
Community level. Currently available voice band modems
typically offer a data rate of 56 kbit/s and employ
automatic data rate adaptation to cater for variable line
quality, with the result that the achieved data rate may be
the
lower
connection to the public telephony network at a fixed
location is clearly insufficient
satisfactory
Internet access, Member States should be able to require
the connection to be brought up to the level enjoyed by
the majority of subscribers so that it supports data rates
sufficient for access to the Internet. Where such specific
measures produce a net cost burden for those consumers
concerned, the net effect may be included in any net cost
calculation of universal service obligations.

connection to the public

than 56 kbit/s.

cases where

to support

In specific

level

in the

(6) Affordable price means a price defined by Member States
specific national
at national
conditions, and may involve setting common tariffs irres-
pective of location or special tariff options to deal with
the needs of low income users. Affordability for individual
consumers is related to their ability to monitor and
control their expenditure.

light of

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(7) Directory information and a directory enquiry service
constitutes an essential access tool for publicly available
telephone services and is part of the universal service
obligation. Users and consumers desire comprehensive
directories and a directory enquiry service covering all
listed telephone subscribers and their numbers (including
fixed, mobile and personal telephone numbers) and want
this information to be presented in a non-preferential
fashion. Under Directive . . ./. . ./EC of
the European
Parliament and of the Council (concerning the processing
of personal data and the protection of privacy in the
electronic communications sector), subscribers have the
right
their personal
information is included in a public directory.

to determine which,

if any, of

(8) For the citizen, it is important for there to be adequate
provision of public pay telephones, and for users to be
able to call emergency telephone numbers and,
in
particular, the single European emergency call number
including
(?112@)
the use of coins or
public pay telephones, without
cards.
the existence of
Insufficient
the additional safety ensured
?112@ deprives citizens of
by the existence of
this number at European level
especially during their travel in other Member States.

free of charge from any telephone,

information about

(9) Member States should take suitable measures in order to
guarantee access
to and affordability of all publicly
available telephone services at a fixed location for
social needs.
disabled users and users with special
Specific measures for disabled users could include, as
appropriate, making available public text telephones or
equivalent measures for deaf or speech-impaired people,
providing services such as directory enquiry services or
equivalent measures free of charge for blind or partially
sighted people, and providing itemised bills in alternative
format on request for blind or partially sighted people.
Specific measures may also need to be taken to enable
disabled users and users with special needs to access
emergency services (112) and to give them a similar possi-
bility to choose between different operators or service
providers as other consumers. The provider of universal
service should not take measures to prevent users from
from services offered by different
benefiting
operators or service providers,
in combination with its
own services offered as part of universal service.

fully

ability and, where appropriate, the willingness of under-
takings to accept all or part of the universal service obli-
gations. It is important that universal service obligations
are fulfilled in the most efficient fashion so that users
generally pay prices that correspond to efficient cost
provision. It is likewise important that universal service
operators maintain the integrity of the network as well as
service continuity and quality. The development of greater
competition and choice provide more possibilities for all
or part of the universal service obligations to be provided
by undertakings other than those with significant market
power. Therefore, universal service obligations could in
some cases be allocated to operators demonstrating the
most cost effective means of delivering access and
services. Corresponding obligations could be included as
conditions in authorisations to provide publicly available
services.

is

service

itemised billing,

(11) Member States should monitor the situation of consumers
with respect to their use of publicly available telephone
services and in particular with respect to affordability. The
related to the
telephone
affordability of
information which users
receive regarding telephone
usage expenses as well as the relative cost of telephone
usage compared to other services, and is also related to
their ability to control expenditure. Affordability therefore
means giving power to consumers through obligations
imposed on undertakings designated as having universal
service obligations. These obligations include a specified
level of
the possibility for consumers
selectively to block certain calls (such as high-priced
calls to premium services), the possibility for consumers
to control expenditure via pre-payment means and the
possibility for consumers to offset or defray up-front
connection fees. Such measures may need to be
reviewed and changed in the light of market devel-
opments. Current
a
do
requirement
for operators with universal service obli-
gations to alert subscribers where a predetermined limit
of expenditure is exceeded or an abnormal calling pattern
occurs. Review of the relevant legislative provisions in
future should consider whether there is a possible need
to alert subscribers for these reasons.

not warrant

conditions

(10) The importance of access to and use of

the public
it
telephone network at a fixed location is such that
should be available to anyone reasonably requesting it.
In accordance with the principle of subsidiarity, it is for
Member States to decide on the basis of objective criteria
which undertakings have universal service obligations for
the purposes of this Directive, taking into account the

(12) Except in cases of persistent late payment or non-payment
of bills, consumers should be protected from immediate
disconnection from the network on the grounds of an
unpaid bill and, particularly in the case of disputes over
high bills for premium rate services, should continue to
have access
telephone services pending
resolution of the dispute. In some Member States such
access may continue to be provided only if the subscriber
continues to pay line rental charges.

to essential

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as having universal

(13) Quality and price are key factors in a competitive market
and national regulatory authorities should be able to
monitor achieved quality of
service for undertakings
with significant market power or which have been
service obligations.
designated
National regulatory authorities should also be able to
monitor the achieved quality of services of other under-
telephone networks and/or
takings providing public
publicly available telephone services to users at
fixed
In relation to the quality of service attained
locations.
by both types of undertakings, national regulatory auth-
orities should be able to take appropriate corrective
measures where they deem it necessary.

(14) Member States may establish mechanisms for covering or
financing the net cost of universal service obligations in
cases where it is demonstrated that the obligations can
only be provided at a loss or at a net cost which falls
outside normal commercial standards. It is important to
ensure that the net cost of universal service obligations is
properly calculated and that any financing is undertaken
with minimum distortion to the market and to under-
takings,
compatible with the provisions of
Articles 87 and 88 of the Treaty.

and is

(15) Any calculation of the net cost of universal service should
take due account of costs and revenues, as well as the
resulting from providing universal
intangible benefits
service but
the general aim of
ensuring that pricing structures reflect costs. Any net
costs of universal service obligations should be calculated
on the basis of transparent procedures.

should not hinder

it

(16) When a universal service obligation represents an unfair
burden on an undertaking,
is appropriate to allow
Member States to establish mechanisms for efficiently
recovering net costs. Recovery via general government
budgets constitutes one method of recovering the net
costs of universal service obligations. It is also reasonable
for established net costs to be recovered from all users in
a transparent fashion by means of levies on undertakings.
In the case of cost recovery by means of levies on under-
takings, Member States should ensure that the method of
allocation amongst
them is based on objective and
non-discriminatory criteria and is in accordance with
the principle of proportionality. This principle does not
prevent Member States from exempting new entrants,
which have not yet achieved any significant market
presence. Any funding mechanism should ensure that
market participants only contribute to the financing of
universal service obligations, and not to other activities
which are not directly linked to the provision of
the
universal
service obligations. Recovery mechanisms
should in all cases respect the principles of Community
law, and in the case of fund sharing mechanisms those of

non-discrimination and proportionality. Any funding
mechanism should ensure that users in one Member
State do not contribute to universal service costs in
another Member State, for example when making calls
from one Member State to another.

(17) National regulatory authorities should satisfy themselves
that those undertakings benefiting from universal service
funding provide a sufficient level of detail of the specific
elements requiring such funding in order to justify their
request. Member States’ schemes for
the costing and
financing of universal
service obligations will be
communicated to the Commission for verification of
compatibility with the Treaty. There are incentives for
designated operators to raise the assessed net cost of
universal service obligations. Therefore Member States
should ensure effective transparency and control of
amounts charged to finance universal service obligations.
In addition, the mechanism should be closely monitored
and provision made for efficient procedures for timely
appeal
to an independent body for the settlement of
disputes as to the amount to be paid, without prejudice
to other available remedies under national
law or
Community law.

review should take

(18) Communications markets continue to evolve in terms of
the services used and the technical means used to deliver
them to users. The universal service obligations at a
Community level should be periodically reviewed with a
the scope be changed or
view to proposing that
re-defined. Such a
account of
evolving social, commercial and technological conditions
and the fact that any change of scope should be subject to
the twin test of services that become available to a
substantial majority of the population, with a consequent
risk of social exclusion for those who can not afford
them. Care should be taken in any change of the scope
of universal service obligations to ensure that certain tech-
nological choices are not artificially promoted above
others, that a disproportionate financial burden is not
imposed on sector undertakings (thereby endangering
market developments and innovation) and that any
financing burden does not
fall unfairly on consumers
with lower incomes. Any change of scope automatically
means that any net cost can be financed via the methods
permitted in this Directive. Member States are not
permitted
financial
to impose on market players
contributions which relate to measures which are not
part of universal service obligations. Individual Member
States remain free to impose special measures (outside the
scope of universal service obligations) and finance them
in conformity with Community law but not by means of
contributions from market players.

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across

competition and choice varies

(19) More effective competition across all access and service
markets will give greater choice for users. The extent of
effective
the
Community and varies within Member States between
geographical areas and between access and service
markets. Nevertheless an undertaking that previously
had exclusive rights may retain significant market power
in access markets and in some service markets. Some
users may be entirely dependent on the provision of
access and services by an undertaking with significant
market power. In general for reasons of efficiency and
to encourage effective competition,
it is important that
the services provided by an undertaking with significant
market power reflect costs. For reasons of efficiency and
social reasons, end user tariffs should reflect demand
conditions as well as cost conditions, provided that this
does not result in distortions of competition. There is a
risk that an undertaking with significant market power
in various ways to inhibit entry or distort
may act
competition,
for example by charging excessive prices,
setting predatory prices, compulsory bundling of retail
services or
to certain
showing undue preference
customers. Universal service obligations and the public
interest imply that for some consumers, tariffs and tariff
structures may need to depart from normal commercial
conditions. Nevertheless, undertakings which have been
found to have significant market power should be free
of unnecessary regulation in markets where effective
competition exists. Therefore, national regulatory auth-
orities should have powers to establish, maintain and
withdraw retail tariff regulations on an undertaking with
significant market
regulation,
geographical averaging or similar instruments may be
twin objectives of promoting
used to achieve
effective competition whilst pursuing public interest
needs, such as maintaining the affordability of publicly
available telephone services for some consumers. Access
to appropriate cost accounting information is necessary in
order for national regulatory authorities to fulfil
their
regulatory duties in this area,
including the imposition
of any tariff controls.

power.

Price

cap

the

termination of

Council of 20 May 1997 on the protection of consumers
in respect of distance contracts (2), apply to consumer
transactions relating to electronic networks and services.
Specifically, consumers should enjoy a minimum level of
their contractual relations
legal certainty in respect of
telephone service provider, such that
with their direct
the contractual
service,
terms, conditions, quality of
condition for
the contract and the
service, compensation measures and dispute resolution
are specified in their contracts. Where service providers
other than direct telephone service providers conclude
contracts with consumers, the same information should
be included in those contracts as well. The measures to
and
ensure
to
conditions will
optimise their choices and thus to benefit
fully from
competition.

increase the ability of consumers

transparency on prices,

tariffs,

terms

information

communications

(21) Users and consumers should have access to publicly
available
services.
on
Member States should be able to monitor the quality of
services which are offered in their territories. National
regulatory authorities should be able systematically to
collect information on the quality of services offered in
their
territories on the basis of criteria which allow
comparability between service providers and between
Member States. Undertakings providing communications
services, operating in a competitive environment, are
likely to make adequate and up-to-date information on
their services publicly available for reasons of commercial
should
advantage. National
regulatory
such
nonetheless be able to require publication of
information where
such
that
is
information is not effectively available to the public.

demonstrated

authorities

it

(20) Contracts are an important tool for users and consumers
to ensure a minimum level of transparency of information
and legal security. Most service providers in a competitive
environment will conclude contracts with their customers
for reasons of commercial desirability. In addition to the
provisions of this Directive, the requirements of existing
Community consumer protection legislation relating to
contracts, in particular Council Directive 93/13/EEC of 5
April 1993 on unfair terms in consumer contracts (1) and
Directive 97/7/EC of the European Parliament and of the

(22) Users and consumers should be able to enjoy a guarantee
of interoperability in respect of all equipment sold in the
Community for the reception of digital television. Member
States should be able to require minimum harmonised
standards in respect of such equipment. Such standards
should be adapted from time to time in the light of tech-
nological and market developments.

(23) All users and consumers should continue to enjoy access
to operator assistance services whatever organisation
provides access to the public telephone network.

(1) OJ L 95, 21.4.1993, p. 29.

(2) OJ L 144, 4.6.1997, p. 19.

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(24) The provision of directory services is already open to
competition. The provisions of this Directive complement
the provisions of Directive (concerning the processing of
personal data and protection of privacy in the electronic
communications sector), by giving subscribers a right to
have their personal data included in a printed or elec-
tronic directory. All
service providers which assign
telephone numbers to their subscribers are obliged to
make relevant
information available in a fair, cost-
oriented, non-discriminatory manner.

gations to provide these facilities when they are already
available. Directive [on the protection of personal data
and privacy in the electronic communications sector]
safeguards the privacy of users with regard to itemised
billing, by giving them the means to protect their right
to privacy when calling-line identification is implemented.

?112@,

(25) It is important that users should be able to call the single
European emergency number
and any other
national emergency telephone numbers, free of charge,
from any telephone,
including public pay telephones,
without
the use of coins or cards. Member States
should have already made the necessary organisational
arrangements best suited to the national organisation of
the emergency systems, in order to ensure that calls to
this number are adequately answered and handled. Caller
location information,
to the
emergency services, will improve the level of protection
and the security of users of ?112@ services and assist the
their duties,
emergency services
provided that the transfer of calls and associated data to
the emergency services concerned is guaranteed. Steady
information technology improvements will progressively
languages
support the simultaneous handling of several
over the networks at a reasonable cost. This in turn will
ensure additional safety for European citizens using the
?112@ emergency call number.

to be made available

in the discharge of

(28) Number portability is a key facilitator of consumer choice
and effective competition in a competitive telecommuni-
cations environment such that end users who so request
should be able to retain their number(s) on the public
telephone network independently of
the organisation
providing service. The provision of this facility between
connections to the public telephone network at fixed and
non-fixed locations is not appropriate at present,
in
information to the
particular due to the loss of
consumer that would result. This provision could be
subject to review.

tariff

(29) Currently, Member States impose certain ?must-carry@ obli-
gations on networks established for the distribution of
radio or television broadcasts to the public. Member
States should be able to lay down proportionate obli-
gations on undertakings under their jurisdiction,
in the
interest of
legitimate public policy considerations, but
such obligations should only be imposed where they are
necessary
interest
objectives and should be proportionate, transparent and
limited in time. It would not be proportionate to extend
such obligations to new networks such as the Internet.
The undertakings on which such obligations fall should be
appropriately compensated for the use of their network
capacity on reasonable,
transparent and non-discrimi-
natory terms.

clearly defined general

to meet

access

(26) Easy access to international telephone services is vital for
European citizens and European businesses.
?00@ has
already been established as the standard international
the Community. Special
code
telephone
for
adjacent
calls
for making
arrangements
locations across borders between Member States may be
established or continued. All operators should be obliged
to complete calls that use not only the European regional
code ?3883@ but also any other regional codes that may be
used in Europe.

between

(27) Tone dialling and calling line identification facilities are
normally available on modern telephone exchanges and
little or no
can therefore increasingly be provided at
expense. Tone dialling is increasingly being used for
user
and facilities,
including value added services, and the absence of this
facility can prevent the user from making use of these
services. Member States are not required to impose obli-

interaction with special

services

(30) It

is considered necessary to ensure the continued
application of the existing provisions relating to leased
line services in Community telecommunications legis-
lation, in particular in Council Directive 92/44/EEC of 5
June 1992 on the application of open network provision
to leased lines (1), as
last amended by Commission
Decision 98/80/EC of 7 January 1998 (2), until such
in
time as national
accordance with the market analysis procedures
laid
down in Directive . . ./. . ./EC (on a common regulatory
framework for electronic communications networks and
services),
that such provisions are no longer needed
because a sufficiently competitive market has developed
in their
the time being these services
constitute mandatory services to be provided without
recourse to any compensation mechanisms.

regulatory authorities determine,

territory. For

(1) OJ L 165, 19.6.1992, p. 27.
(2) OJ L 14, 20.1.1998, p. 27.

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(31) Where a Member State seeks to ensure the provision of
other specific services throughout its national territory,
such obligations
should be implemented on a cost-
efficient basis and outside the scope of universal service
obligations. As a reaction to the Commission’s eEurope
initiative, the Lisbon European Council called on Member
States to ensure that all schools have access to the
Internet and to multimedia resources by the end of 2001.

HAVE ADOPTED THIS DIRECTIVE:

CHAPTER I

SCOPE, AIMS AND DEFINITIONS

Article 1

Scope and aims

(32) In the context of a competitive environment, the views of
interested parties, including users and consumers, should
be taken into account by national regulatory authorities
when dealing with issues related to users’ and consumers’
rights. Effective procedures should be available to deal
with disputes between users and consumers, on the one
hand, and undertakings providing publicly available
communications services, on the other. Member States
should take full account of Commission Recommendation
98/257/EC of 30 March 1998 on the principles applicable
to the bodies responsible for out-of-court settlement of
consumer disputes (1).

(33) The provisions of this Directive do not prevent a Member
State from taking measures justified on grounds set out in
Articles 30 and 46 of the Treaty, and in particular on
grounds of public security, public policy and public
morality.

1. Within the framework of Directive (on a common regu-
latory framework for electronic communications networks and
services), this Directive concerns the provision of electronic
and
and
communications
consumers.

networks

services

users

to

the Community of

The aim of this Directive is to ensure the availability
2.
throughout
electronic
communications services at an affordable price by means of
effective competition and choice and to deal with circum-
stances in which users’ and consumers’ needs are not satisfac-
torily met by commercial means. It also aims to ensure inter-
operability of consumer digital television equipment.

good quality

Article 2

Definitions

The definitions given in Directive (on a common regulatory
and
framework for
services) shall apply.

communications networks

electronic

(34) In accordance with the principles of subsidiarity and
proportionality as set out in Article 5 of the Treaty, the
objectives of setting a common level of universal service
for telecommunications for all European users and of
harmonising conditions for access to and use of public
telephone networks at a fixed location and related
publicly available telephone services cannot be realised
satisfactorily at Member State level. The objective of
achieving a harmonised framework for the regulation of
electronic communications services, electronic communi-
cations networks and associated facilities cannot be
sufficiently achieved by the Member States and can
therefore be better achieved by the Community. This
Directive confines itself
to the minimum required in
order
to achieve those objectives and does not go
beyond what is necessary for that purpose.

(35) Since the measures necessary for the implementation of
this Directive are measures of general scope within the
meaning of Article 2 of Council Decision 1999/468/EC of
28 June 1999 laying down the procedures for the exercise
of implementing powers conferred on the Commission (2),
the regulatory
they should be adopted by use of
procedure provided for in Article 5 of that Decision,

(1) OJ L 115, 17.4.1998, p. 31.
(2) OJ L 184, 17.7.1999, p. 23.

The following definitions shall also apply:

(a) ?direct public telephone service provider@ means an under-
taking that provides publicly available telephone services
and that also provides a subscriber with a connection to
the public telephone network;

(b) ?subscriber@ means any natural or legal person that is party
to a contract with undertakings providing publicly available
communications services for the supply of such services;

(c) ?public pay telephone@ means a telephone available to the
general public, for the use of which the means of payment
include coins and/or credit/debit cards and/or pre-payment
cards, including cards for use with dialling codes;

(d) ?public telephone network@ means transmission systems and
switching or routing equipment and other resources which
are used to provide publicly available telephone services; it
supports the transfer between network termination points
of
forms of
communication, such as fax and data; connection to the
public telephone network at a fixed location may take
place via wireless as well as wire-line means;

speech communications, and also other

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(e) ?publicly available telephone service@ means a service
available to the public for originating and receiving
national and international calls, and access to emergency
services using the code 112 through a number or numbers
in a national or international telephone numbering plan; it
may include the provision of operator assistance, directory
services, provision of public pay phones, provision of
service under special
terms and/or provision of special
facilities for customers with disabilities or with special
social needs;

(f)

?network termination point@ (NTP) means the physical point
at which a subscriber is provided with access to a public
communications network; in the case of networks involving
switching or routing, the NTP is identified by means of a
specific network address, which may be linked to a
subscriber number or name; it represents a boundary for
regulatory purposes between different systems; defining the
location of NTP is the responsibility of the national regu-
latory authority;

The connection provided shall be capable of allowing
2.
users to make and receive local, national and international
telephone calls, facsimile communications and data communi-
cations, at data rates that are sufficient
Internet
access.

to permit

Article 5

Directory enquiry services and directories

Member States shall ensure that, in respect of subscribers of
direct public telephone service providers and in conformity
with Article 12 of Directive (on processing of personal data
and protection of privacy in the electronic communications
sector):

(a) a subscriber directory is available to users in a form
approved by the national regulatory authority, whether
printed or electronic, or both, and is updated on a
regular basis, and at least once a year;

(g) ?geographic number@ means a number from the national
numbering plan where part of its digit structure contains
geographic significance used for
to the
location of the NTP of the subscriber to whom
physical
the number has been assigned.

routing calls

CHAPTER II

UNIVERSAL SERVICE OBLIGATIONS

Article 3

Availability of universal service

1. Member States shall ensure that the services set out in
this Chapter are made available at the quality specified to all
users in their territory, independently of geographical location,
and, in the light of specific national conditions, at an affordable
price.

2. Member States shall determine the most efficient and
appropriate approach for ensuring the implementation of
universal service, whilst respecting the principles of
trans-
parency, objectivity and non-discrimination. They shall seek
to minimise market distortions, in particular the provision of
services at prices or subject to other terms and conditions
which depart from normal commercial conditions, whilst safe-
guarding the public interest.

Article 4

Provision of access at fixed locations

1. Member States shall ensure that all reasonable requests
for connection to the public telephone network at a fixed
location and for
telephone
services at a fixed location are met by at least one operator.

to publicly available

access

(b) at least one telephone directory enquiry service covering all
to all users,

listed subscribers’ numbers
including users of public pay telephones;

available

is

(c) undertakings

that provide the services

referred to in
paragraphs (a) and (b) apply the principle of non-discrimi-
nation to the treatment of
information that has been
provided to them by other undertakings.

Article 6

Public pay telephones

1. Member States shall ensure that national regulatory auth-
orities can impose obligations on undertakings in order to
ensure that public pay telephones are provided to meet the
reasonable needs of users
the geographical
coverage, the number of telephones and the quality of services.

in terms of

2.
A Member State may decide not to apply paragraph 1 in
all or part of its territory on the basis of a consultation of
interested parties as referred to in Article 29.

3. Member States shall ensure that it is possible to make
emergency calls from public pay telephones using the single
European emergency call number ?112@ and other national
emergency numbers, all free of charge and without having to
use coins or cards.

Article 7

Special measures for disabled users and users with special
needs

1. Member States shall, where appropriate,
take specific
measures to ensure equivalent access to and affordability of
including access
publicly available telephone services,
to
emergency and directory services,
for disabled users and
users with special social needs.

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2. Member States may take specific measures, in the light of
national conditions, to ensure that disabled users and users
with special needs can also take advantage of the choice of
undertakings and service providers available to the majority of
users.

for undertakings to apply common tariffs, provide support to
consumers identified as having specific economic or social
needs,
to the public
telephone service at a specified tariff.

in particular by granting entitlement

Article 8

Designation of undertakings

1. Member States may, if necessary, designate one or more
undertakings to guarantee the provision of universal service as
identified in Articles 4 to 7, so that the whole of the national
territory is covered. Member States may designate different
undertakings or
to provide different
elements of universal service.

sets of undertakings

4.
National regulatory authorities shall ensure that, where an
undertaking has an obligation to provide special tariff options
1 or common tariffs, the conditions are fully transparent and
are published and applied in accordance with the principle of
non-discrimination. National regulatory authorities may require
that specific schemes be modified or withdrawn.

Article 10

Specific affordability provisions and control of
expenditure

2.
In order to ensure efficient provision of access to and use
of the public telephone network, Member States shall ensure
that all undertakings have an opportunity to be designated as
providing access and services at a fixed location in part or all
of the national territory, if necessary by designating different
undertakings to provide different elements (geographical or
otherwise) of the universal service obligations.

1. Member States shall ensure that designated undertakings,
in providing facilities and services additional to the provision of
a connection to the public telephone network and publicly
available telephone services, establish tariffs in such a way
that the user is not obliged to pay for facilities or services
which are not necessary or not
the service
requested.

required for

3. When Member States designate undertakings in part or
all of the national territory as having universal service obli-
gations, they shall do so using an efficient, objective and trans-
parent allocation mechanism. Such designation methods may
include public tenders and public auctions, in order to ensure
that universal service is provided in a cost-effective manner and
as a means of determining the net cost of the universal service
obligation.

2. Member States shall ensure that designated undertakings
provide the specific facilities and services set out in Annex I in
order that consumers can monitor and control expenditure and
avoid unwarranted disconnection of service.

Article 11

Quality of service of designated undertakings

Article 9

Level and structure of tariffs

available

telephone

regulatory

authorities

service provided

the level and structure of retail

shall monitor
tariffs of
at

1.
National
the
evolution of
the
fixed
publicly
locations by designated undertakings, in particular in relation
to national consumer prices and income. They may, in the light
of national conditions, require the designated undertakings to
provide tariff options or packages to consumers which depart
from those provided under normal commercial conditions, in
particular to ensure that those on low incomes or with specific
social needs are not prevented from accessing or using the
publicly available telephone service.

and

1.
National regulatory authorities shall ensure that all under-
takings with obligations as referred to in Article 4 publish
adequate
their
performance in the provision of access and services, based
on parameters, definitions and measurement methods set out
in Annex III. The published information shall also be supplied
to the national regulatory authority.

information

concerning

up-to-date

National

regulatory authorities

2.
shall be able to set
performance targets for undertakings with universal service
obligations under Article 4. In so doing, national regulatory
authorities shall take account of views of interested parties,
in particular as referred to in Article 29.

2. Member States may require undertakings with obligations
under Article 4 to apply common tariffs throughout
the
territory, in the light of national conditions.

3. Member States may, as an alternative to the requirement
for designated undertakings to provide special tariff options or

Persistent failure by an undertaking to meet performance
3.
targets may result
in specific measures being taken in
accordance with conditions set out in the general authorisation
measures for the operator. National regulatory authorities shall
be able to order independent audits of the performance data,
paid for by the undertaking concerned, in order to ensure the
accuracy and comparability of
the data made available by
undertakings with universal service obligations.

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Article 12

Costing of universal service

Article 14

Transparency

1. Where necessary, national
regulatory authorities may
assess whether the provision of universal service represents
an unfair burden on undertakings designated to provide
universal service.

1. Where a mechanism for sharing the net cost of universal
service obligations as referred to in Article 13 is established,
national regulatory authorities shall ensure that the principles
for cost sharing, and details of
the mechanism used, are
publicly available.

For that purpose, national regulatory authorities may:

(a) calculate the net cost of the obligation in accordance with

Annex IV, Part A; or

(b) use an efficient, objective and transparent allocation

mechanism such as public tendering or auction.

2.
The calculation of the net cost of universal service obli-
gations under paragraph 1(a) shall be audited by an inde-
pendent body or organisation. The results of the cost calcu-
lation and the conclusions of the audit shall be open to the
public.

National
report

service obligations,

2.
regulatory authorities
shall ensure that an
annual
is published giving the calculated cost of
identifying the contributions
universal
made by all the parties involved, and identifying any market
benefits, both financial and non-financial,
that may have
accrued to the undertaking(s) designated to provide universal
service, where a Fund is actually in place and working.

3. Member States may require that contributions made by
undertakings to finance universal service obligations be shown
on users’ bills.

Article 13

Financing of universal service obligations

Article 15

Review of scope of universal service

1. Where, on the basis of the net cost calculation referred to
in Article 12, and taking into account any market benefit
which accrues
to an undertaking designated to provide
universal service, national regulatory authorities find that an
undertaking is subject to an unfair burden, Member States may
decide:

The Commission shall periodically review the scope of
later than two
this Directive,
in particular
the scope be changed or

1.
universal service, on the first occasion not
years after entry into force of
with a view to proposing that
redefined.

(a) to introduce a mechanism to compensate that undertaking
for the determined net costs from the general government
budget; or

(b) to share the net cost of universal service obligations.

This review shall be undertaken in the light of social,
review
and technological developments. The

2.
commercial
process shall be undertaken in accordance with Annex V.

2. Where the net cost
is shared under paragraph 1(b),
Member States shall establish a sharing mechanism admin-
istered by a body independent from the beneficiaries under
the control of the national regulatory authority. Only the net
cost, as determined in Article 12, of the obligations laid down
in Articles 3 to 10 may be financed.

CHAPTER III

USER AND CONSUMER INTERESTS AND RIGHTS

Article 16

Retail tariff regulation

A sharing mechanism based on a Fund shall respect
least market distortion,
in accordance with

3.
the principles of
non-discrimination and proportionality,
the principles of Annex IV.

transparency,

4.
Any charges related to the sharing of the cost of universal
service obligations shall be unbundled and identified separately.
Such charges shall not be imposed or collected from under-
takings that are not providing services in the territory of the
Member State that has established the sharing mechanism.

1. Member States shall maintain all obligations relating to
retail tariffs for the provision of access to and use of the public
telephone network at fixed locations that were in force prior to
the date of entry into force of this Directive under Article 17 of
Directive 98/10/EC of
the
Council on the application of open network provision (ONP)
to voice telephony and a universal service for telecommuni-
cations in a competitive environment (1), until a review has
been carried out and a determination made in accordance
with paragraph 2 of this Article.

the European Parliament and of

(1) OJ L 101, 1.4.1998, p. 24.

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2. Member States shall ensure that, on the entry into force
of this Directive, and periodically thereafter, national regulatory
authorities undertake a market analysis, in accordance with the
procedure set out in Article 14(3) of Directive (on a common
regulatory framework for electronic communications networks
and services) to determine whether to maintain, amend or
withdraw the obligations referred to in paragraph 1 of this
Article. Measures taken shall be subject to the procedure set
out in Article 6(2) to (5) of Directive (on a common regulatory
and
framework for
services).

communications networks

electronic

3. Where as a result of a market analysis carried out in
accordance with Article 14(3) of the Directive (on a common
regulatory framework for electronic communications networks
and services), national regulatory authorities determine that a
market is not effectively competitive, they shall ensure that
undertakings with significant market power in that market
orient
to charge
excessive prices or inhibit market entry, or restrict competition
by setting predatory prices, showing undue preference to
specific users or unreasonably bundling services. National regu-
latory authorities may apply appropriate retail price cap
measures to such undertakings in order to protect user and
consumer interests whilst promoting effective competition.

towards costs,

so as not

tariffs

their

National

regulatory authorities

4.
shall notify to the
Commission the names of undertakings subject to retail tariff
controls and, on request, submit information concerning the
retail tariff controls applied and the cost accounting systems
used by the undertakings concerned.

5. Member States shall ensure that, where an undertaking is
subject to retail tariff regulation, the necessary and appropriate
cost accounting systems are implemented and that the suit-
ability of such systems is verified by a competent body
which is independent of the organisation. National regulatory
authorities shall ensure that a statement concerning compliance
is published annually.

6. Without prejudice to Article 9(1) and Article 10, national
regulatory authorities shall not apply retail tariff control mech-
anisms under paragraph 1 of this Article to geographical or
user markets where they are satisfied that there is effective
competition.

Article 17

Contracts

1. Member States shall ensure that users and consumers
have a right to a contract with their direct public telephone
service provider(s) that specifies:

(a) the identity and address of the supplier;

(b) services provided, the service quality levels offered, as well

as the time for the initial connection;

(c) the types of maintenance service offered;

(d) the means by which up-to-date

information on all
applicable tariffs and maintenance charges may be obtained;

(e) the duration of the contract, the conditions for renewal and

termination of services and of the contract;

(f) any compensation and the refund arrangements which
apply if contracted service quality levels are not met; and

(g) the method of

initiating procedures
disputes in accordance with Article 30.

for

settlement of

contracts

2. Where
concluded between users or
consumers and communications services providers other than
direct public telephone service providers, the information in
paragraph 1 shall also be included in such contracts.

are

3.
Users and consumers shall be given adequate notice of
any intention to modify contractual conditions and shall be free
to withdraw from contracts if they do not accept the new
conditions.

Paragraphs 1, 2 and 3 apply without prejudice to
in particular

4.
Community rules on consumer protection,
Directives 97/7/EC and 93/13/EC.

Article 18

Transparency and publication of information

Member States shall ensure that transparent information on
applicable prices and tariffs, and on standard terms and
conditions,
to and use of publicly
available telephone services is available to the public, and
particularly to all users and consumers,
in accordance with
the provisions of Annex II.

in respect of access

Article 19

Quality of service

electronic

1. Member States shall ensure that national regulatory auth-
orities are able to require undertakings that provide publicly
to publish
available
communications
for
and
comparable,
up-to-date
consumers on the quality of
their services. The published
information shall also be supplied to the national regulatory
authority.

information

adequate

services

2.
An obligation to publish quality of service information
shall be imposed after taking account of the views of interested
parties, including users and consumers, as referred to in Article
29, and after a period of public consultation on the measures
proposed.

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Article 20

Interoperability of consumer digital television equipment

1. Member States
interoperability of
consumer digital television equipment as set out in Annex VI.

ensure

shall

the

3. Member States shall ensure that undertakings which
operate public
location
telephone networks make
information available to authorities handling emergencies,
where technically feasible,
to the European
emergency number ?112@.

for all calls

caller

2.
The Commission may amend Annex VI in the light of
market and technological developments in accordance with the
procedure referred to in Article 33(2).

4. Member States shall ensure that citizens are adequately
informed about
the European
the existence and use of
emergency call number ?112@.

Article 21

Operator assistance and directory enquiry services

1. Member States shall ensure that subscribers to publicly
available telephone services have the right to have an entry in
publicly available directories.

that

shall

ensure

2. Member States
all direct public
telephone service providers which assign telephone numbers
to subscribers meet all reasonable requests to make available,
for the purposes of the provision of directory services, the
relevant information in an agreed format on terms which are
fair, cost-oriented and non-discriminatory.

3. Member States shall ensure that all users provided with a
connection to the public telephone network can access
operator assistance services and directory enquiry services in
accordance with Article 5(b).

shall not maintain any

4. Member States
regulatory
restrictions which prevent users in one Member State from
accessing directly the directory enquiry service in another
Member State.

5.
Paragraphs 1 to 4 apply subject to the requirements of
Community legislation on the protection of personal data and
privacy and, in particular, Article 12 of Directive (concerning
the processing of personal data and the protection of privacy
in the electronic communications sector).

Article 22

European emergency number

1. Member States shall ensure that, in addition to any other
national emergency call numbers specified by the national
regulatory authorities, all users of publicly available telephone
services, including users of public pay telephones, are able to
call the emergency services free of charge, by using the single
European emergency call number ?112@.

shall ensure that calls

to the single
2. Member States
?112@ are appropriately
European emergency call number
answered and handled in a manner best
suited to the
national organisation of emergency systems and within the
technological possibilities of the networks.

Article 23

European telephone access codes

1. Member States shall ensure that
the ’00’ code is the
standard international access code. Special arrangements for
across borders
making calls between adjacent
between Member States may be established or continued. The
subscribers to publicly available telephone services in the
locations
such
be
arrangements.

informed of

concerned

locations

shall

fully

2. Member States shall ensure that all undertakings that
operate public telephone networks handle all calls to and
from the European telephone numbering space identified by
the regional code ?3883@ or any other European regional codes
that may be used.

Article 24

Provision of additional facilities

1. Member States shall ensure that national regulatory auth-
orities are able to require all undertakings that operate public
telephone networks to make available to users the facilities
listed in Annex I, Part B, subject to technical feasibility and
economic viability.

2.
A Member State may decide not to apply paragraph 1 in
all or part of its territory on the basis of a consultation as
referred to in Article 29.

Article 25

Number

portability,

carrier

selection

and

carrier

pre-selection

1. Member States shall ensure that all subscribers of publicly
available telephone services, including mobile services, who so
request can retain their number(s) independently of the under-
taking providing the service:

(a) in the case of geographic numbers, at a specific location;

and

(b) in the case of numbers other than geographic numbers, at

any location.

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National regulatory authorities shall require undertakings
2.
notified as having significant market power for the provision of
connection to and use of the public telephone network at fixed
locations to enable their subscribers to access the services of
any interconnected provider of publicly available telephone
services:

(a) on a call-by-call basis by dialling a short prefix; and

(b) by means of pre-selection, with a facility to override any
pre-selected choice on a call-by-call basis by dialling a short
prefix.

User requirements for these facilities to be implemented on
other networks or
shall be assessed in
in other ways
accordance with the market analysis procedure laid down in
Article 14 of Directive (on a common regulatory framework for
electronic communications networks and services).

3.
National regulatory authorities shall ensure that pricing
for interconnection related to the provision of number port-
ability under paragraph 1, and the use of
the facility in
paragraph 2, are cost oriented.

National regulatory authorities shall not impose tariffs for
4.
the porting of numbers in a manner
that would distort
competition, such as by imposing a common tariff across all
undertakings.

Article 26

2Must carry3 obligations

their

1. Member States may impose ?must carry@ obligations, for
the transmission of specified radio and television broadcasts, on
undertakings under
jurisdiction providing electronic
communications networks established for the distribution of
radio or television broadcasts to the public. Such obligations
shall only be imposed where they are necessary to meet clearly
defined general interest objectives and shall be proportionate,
transparent and limited in time.

2. Member States shall ensure that the undertakings subject
to ?must carry@ obligations receive appropriate compensation
on reasonable,
transparent and non-discriminatory terms
taking into account the network capacity required.

CHAPTER IV

MANDATORY SERVICES AND LEASED LINES

Article 27

Availability of leased lines

1. Member States shall maintain all obligations on under-
takings that were in force prior to the date of entry into
force of this Directive under Articles 3, 4, 6, 7, 8 and 10 of
Directive 92/44/EEC until a review has been carried out and a
determination made in accordance with paragraph 2 of this
Article.

the entry into force of

this
2. Within one year after
Directive, and every two years thereafter, national regulatory
authorities shall conduct a market analysis, in accordance with
the procedure set out
in Article 14(3) of Directive (on a
common regulatory framework for electronic communications
networks and services), to determine whether the provision of
part or all of the minimum set of leased lines services in their
territory is subject to effective competition and to determine
whether to maintain, amend or withdraw obligations referred
this Article. Measures taken shall be
to in paragraph 1 of
subject
to (5) of
in Article 6(2)
Directive (on a common regulatory framework for electronic
communications networks and services).

to the procedure set out

3.
Technical standards for the minimum set of leased lines
with harmonised characteristics shall be published in the
Official Journal of the European Communities, as part of the List
of Standards referred to in Article 15 of Directive (on a
common regulatory framework for electronic communications
adopt
networks
The Commission may
leased
amendments necessary to adapt the minimum set of
lines
in
including the possible deletion of certain
market demand,
types of
leased line from the minimum set, acting in
accordance with the procedure referred to in Article 33(2) of
this Directive.

to new technical developments and to changes

services).

and

Article 28

Additional mandatory services

Member States may decide to make additional services, apart
from universal service obligations as defined in Chapter II,
publicly available in its own territory but,
in such circum-
stances, no compensation mechanism involving specific under-
takings, operators or service providers may be imposed.

CHAPTER V

GENERAL AND FINAL PROVISIONS

Article 29

Consultation with interested parties

1. Member States shall ensure that national regulatory auth-
orities take into account the views of users, consumers, manu-
facturers, undertakings providing communications networks
and service providers on issues
related to all user and
consumer rights concerning publicly available communications
services.

2.
In respect of quality of service issues, and in particular in
response to complaints relating to quality of service, national
regulatory authorities shall be able to determine whether to
require publication of quality of
service information of
network operators and service providers. National regulatory
service
authorities may specify,
inter alia,
form and
to be measured, and the content,
parameters
in order to ensure
manner of information to be published,
that users and consumers have access
to comprehensive,
comparable and user-friendly information. For services falling
within universal service obligations, the parameters, definitions
and measurement methods given in Annex III could be used.

the quality of

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Article 30

Dispute resolution

1. Member States shall ensure that transparent, simple and
inexpensive procedures are available for dealing with users’ and
consumers’ complaints. Member States shall adopt measures to
ensure that such procedures enable disputes to be settled fairly
and promptly with provision, where warranted, for a system of
reimbursement and/or compensation. They should follow,
wherever possible, the principles set out in Recommendation
98/257/EC.

2.
For disputes involving parties in different Member States,
the provisions of Article 18 of the Directive on a common
regulatory
communications
networks and services shall apply.

framework

electronic

for

Article 31

Technical adjustment

Amendments necessary to adapt Annexes I, II, III and VI to
technological developments or to changes in market demand
shall be adopted by the Commission, acting in accordance with
the procedure referred to in Article 33(2).

Article 32

Notification and monitoring

National

regulatory authorities

1.
Commission by 31 December 2001 at
immediately in the event of any change thereafter:

shall notify
the

to the
latest, and

(a) the names of undertakings designated as having universal

service obligations under Article 8(1);

(b) the names of undertakings subject to retail tariff regulation
under Article 16, and details of the relevant product/service
and geographical markets;

(c) the names of undertakings found to have significant market

power for the purposes of Article 25(2);

(d) the names of those undertakings which have obligations for
provision of the minimum set of leased lines, in accordance
with Article 27.

They shall notify the Commission of any changes without
delay. The Commission shall make the information available
in a readily accessible form, and shall distribute it
to the
Communications Committee and the High-Level Communi-
cations Group as appropriate.

The Commission shall periodically review the functioning
2.
of this Directive and report to the European Parliament and to
the Council, on the first occasion not later than two years after
the date of entry into force of this Directive. The Member
States and national regulatory authorities shall supply the
necessary information to the Commission for this purpose.

Article 33

Committee

1.
The Commission shall be assisted by the Communications
Committee, instituted by Article 19 of Directive (on a common
regulatory framework for electronic communications networks
and services).

2. Where reference is made to this paragraph, the regulatory
procedure laid down in Article 5 of Decision 1999/468/EC
shall apply, in compliance with Articles 7 and Article 8 thereof.

The period provided for in Article 5(6) of Decision

3.
1999/468/EC shall be three months.

Article 34

Transposition

1. Member States shall bring into force the laws, regulations
and administrative provisions necessary to comply with this
Directive by 31 December 2001 at
the latest. They shall
forthwith inform the Commission thereof.

When Member States adopt those provisions, they shall contain
a reference to this Directive or be accompanied by such a
reference on the occasion of
their official publication.
Member States shall determine how such reference is to be
made.

2. Member States shall communicate to the Commission the
text of the provisions of national law which they adopt in the
field governed by this Directive and of any subsequent modifi-
cations to those provisions.

Article 35

Entry into force

This Directive shall enter into force on the twentieth day
following that of its publication in the Official Journal of the
European Communities.

Article 36

Addressees

This Directive is addressed to the Member States.

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Description of facilities referred to in Article 10 (specific affordability provisions) and Article 24 (additional
facilities)

ANNEX I

Facilities and services referred to in Article 10:

(a) Itemised billing

PART A

National regulatory authorities, subject to the requirements of relevant legislation on the protection of personal data
and privacy, may lay down the basic level of itemised bills which shall be provided by designated undertakings (as
established in Article 8) to consumers free of charge in order that they can (i) allow verification and control of the
charges incurred in using the public telephone network at a fixed location and/or related publicly available telephone
services, and (ii) adequately monitor their usage and expenditure and thereby exercise a reasonable degree of control
over their bills.

Where appropriate, additional levels of detail may be offered to subscribers at reasonable tariffs or at no charge. A
Member State may authorise its national regulatory authority not to apply the requirements of this paragraph in all
or part of its territory if it is satisfied that this facility is widely available.

(b) Selective call barring for outgoing calls, free of charge

i.e. the facility whereby the subscriber can, on request to the telephone service provider, bar outgoing calls of defined
types or to defined types of numbers free of charge.

(c) Pre-payment systems

National regulatory authorities may require designated undertakings to provide means for consumers to pay for
access to the public telephone network and use of public telephone services on pre-paid terms.

(d) Phased payment of connection fees

National regulatory authorities may require designated undertakings to allow consumers to pay for connection to the
public telephone network on the basis of payments phased over time.

(e) Non-payment of bills

Member States shall authorise specified measures, which shall be proportionate, non-discriminatory and published,
to cover non-payment of telephone bills for use of the public telephone network at fixed locations. These measures
shall ensure that due warning of any consequent service interruption or disconnection is given to the subscriber
beforehand. Except in cases of fraud, persistent late payment or non-payment, these measures shall ensure, as far as
is technically feasible,
that any service interruption is confined to the service concerned. Disconnection for
non-payment of bills should take place only after due warning is given to the subscriber. Member States may
allow a period of limited service prior to complete disconnection, during which only calls that do not incur a charge
to the subscriber (e.g. ?112@ calls) are permitted.

List of facilities referred to in Article 24:

(a) Tone dialling or DTMF (dual-tone multi-frequency operation)

PART B

i.e. the public telephone network supports the use of DTMF tones as defined in ETSI ETR 207 for end-to-end
signalling throughout the network both within a Member State and between Member States.

(b) Calling-line identification

i.e. the calling party’s number is presented to the called party prior to the calls being established.

This facility should be provided in accordance with relevant legislation on protection of personal data and privacy, in
particular Directive [. . .] concerning the processing of personal data and the protection of privacy in the electronic
communications sector.

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ANNEX II

Information to be published in accordance with Article 18

(Transparency and publication of information)

The national regulatory authority has a responsibility to ensure that the information in this Annex is published in
accordance with Article 18. It is for the national regulatory authority to decide which information is to be published by
the undertakings providing public telephone networks and/or publicly available telephone services and which
information is to be published by the national regulatory authority itself.

1. Name(s) and address(es) of undertaking(s)

i.e. names and head office addresses of undertakings providing public telephone networks and/or publicly available
telephone services.

2. Publicly available telephone services offered

2.1. Scope of the publicly available telephone service

Description of the publicly available telephone services offered, indicating what is included in the subscription
charge and the periodic rental charge (e.g. operator services, directories, directory services, selective call barring,
itemised billing, maintenance, etc.)

2.2. Standard tariffs covering access, all types of usage charges, maintenance, and including details of standard

discounts applied and special and targeted tariff schemes

2.3. Compensation/refund policy, including specific details of any compensation/refund schemes offered

2.4. Types of maintenance service offered

2.5. Standard contract conditions, including any minimum contractual period, if relevant.

3. Dispute settlement mechanisms including those developed by the undertaking.

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ANNEX III

Quality of service parameters in the context of universal service

Supply-time and quality-of-service parameters, definitions and measurement methods referred to Articles 11 and 19

Parameter
(Note 1)

Definition

Measurement method

Supply time for initial connection

ETSI EG 201 769-1

ETSI EG 201 769-1

Fault rate per access line

ETSI EG 201 769-1

ETSI EG 201 769-1

Fault repair time

ETSI EG 201 769-1

ETSI EG 201 769-1

Unsuccessful call ratio
(Note 2)

Call set up time
(Note 2)

ETSI EG 201 769-1

ETSI EG 201 769-1

ETSI EG 201 769-1

ETSI EG 201 769-1

Response times for operator services

ETSI EG 201 769-1

ETSI EG 201 769-1

Response
services

times

for directory

enquiry

ETSI EG 201 769-1

ETSI EG 201 769-1

Proportion of coin and card operated
public pay-telephones in working order

ETSI EG 201 769-1

ETSI EG 201 769-1

Bill correctness complaints

ETSI EG 201 769-1

ETSI EG 201 769-1

Version number of ETSI EG 201 769-1 is 1.1.1 (April 2000).

Note 1
Parameters should allow for performance to be analysed at a regional level (i.e. no less than level 2 in the Nomenclature of Territorial Units
for Statistics (NUTS) established by Eurostat).

Note 2
Member States may decide not to require that up-to-date information concerning the performance for these two parameters be kept, if
evidence is available to show that performance in these two areas is satisfactory.

ANNEX IV

Calculating the net cost, if any, of universal service obligations and establishing any recovery or sharing
mechanism in accordance with Articles 12 and 13

PART A: CALCULATION OF NET COST

Universal service obligations refer to those obligations placed upon an undertaking by a Member State which concern
the provision of a network and service throughout a specified geographical area, including, where required, averaged
prices in that geographical area for the provision of that service or provision of specific tariff options for consumers
with low incomes or with specific social needs.

In order to avoid the regulatory burden of calculating any net cost of universal service obligations where this
subsequently proves to be unnecessary, national regulatory authorities shall consider all means to ensure appropriate
incentives for undertakings (designated or not) to provide universal service obligations cost efficiently. Included is an
assessment of the feasibility of assigning universal service obligations by tendering or auction methods.

In undertaking a calculation exercise, the net cost of universal service obligations shall be calculated as the difference
between the net cost for an organisation of operating with the universal service obligations and operating without the
universal service obligations. This applies whether the network in a particular Member State is fully developed or is still
undergoing development and expansion. Due attention shall be given to correctly assess the costs that any universal
service operator would have chosen to avoid had there been no universal service obligation. The net cost calculation
should assess the benefits, both financial and non-financial, to the universal service operator.

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The calculation shall be based upon the costs attributable to:

(i) elements of the identified services which can only be provided at a loss or provided under cost conditions falling

outside normal commercial standards.

This category may include service elements such as access to emergency telephone services, provision of certain
public pay telephones, provision of certain services or equipment for disabled people, etc.

(ii) specific end-users or groups of end-users who, taking into account the cost of providing the specified network and
service, the revenue generated and any geographical averaging of prices imposed by the Member State, can only be
served at a loss or under cost conditions falling outside normal commercial standards.

This category includes those end-users or groups of end-users which would not be served by a commercial operator
which did not have an obligation to provide universal service.

The calculation of the net costs of specific aspects of universal service obligations shall be made separately and so as to
avoid the double counting of any direct or indirect benefits and costs. The overall net cost of universal service
obligations to any undertaking shall be calculated as the sum of the net costs arising from the specific components
of universal service obligations, taking account of both financial and non-financial benefits. The responsibility for
verifying the net cost lies with the national regulatory authority.

PART B: RECOVERY OF ANY NET COSTS OF UNIVERSAL SERVICE OBLIGATIONS

The recovery or financing of any net costs of universal service obligations requires undertakings with universal service
obligations to be compensated for the services they provide under non-commercial conditions. Because such a compen-
sation involves financial transfers, Member States shall ensure that these are undertaken in a transparent, objective,
non-discriminatory and proportional manner. This means that the transfers result in the least distortion to competition
and to user demand. Member States should give due consideration to recovering any net costs via general government
budgets.

A sharing mechanism based on a Fund may also be used. A sharing mechanism based on a Fund should respect the
principles of transparency,
least market distortion, non-discrimination and proportionality. Least market distortion
means that the contribution burden should be spread as wide as possible, subject to proportionality. Proportionality
means that NRAs may choose not to require contributions from undertakings whose national turnover is less than a set
limit.

Member States undertaking cost recovery via a Fund should give due consideration to collecting contributions via a VAT
mechanism on operators and service providers so as to provide a transparent and consistent mechanism (to avoid the
danger of double imposition of contributions on both outputs and inputs of operators and service providers) for
collecting contributions.

The independent body administering the fund shall be responsible for collecting contributions from operators or service
providers who are assessed as liable to contribute to the net cost of universal service obligations in the Member State
and shall oversee the transfer of sums due and/or administrative out-payments to the persons and/or undertakings
entitled to receive payments from the Fund.

Process for reviewing the scope of universal service in accordance with Article 15

ANNEX V

In considering whether a review of the scope of universal service obligations should be undertaken, the Commission
shall take into consideration the following elements:

I social and market developments in terms of the services used by consumers;

I social and market developments in terms of the availability and choice of services to consumers;

I technological developments in terms of the way services are provided to consumers.

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In considering whether the scope of universal service obligations be changed or redefined, the Commission shall take
into consideration the following elements:

I are specific services available to and used by a majority of consumers and does the lack of availability or non-use by

a minority of consumers result in social exclusion; and

I does the availability and use of specific services convey a general net benefit to all consumers such that public
intervention is warranted in circumstances where the specific services are not provided to the public under normal
commercial circumstances?

In proposing any change or redefinition of the scope of universal service obligations, the Commission may consider the
following options:

I propose a change or redefinition of the scope of universal service obligations but require that any net costs are

financed only via general government budgets; or

I propose a change or redefinition of the scope of universal service obligations and permit any net costs to be

financed by mechanisms in conformity with this Directive.

Alternatively, the Commission may propose that specific services should become mandatory services to be provided
under cost-oriented obligations in line with Chapter IV, and not be included in the scope of universal service obligations
as specified in Chapter II.

ANNEX VI

Interoperability of digital consumer equipment (Article 20)

1. The Common Scrambling Algorithm and free-to-air reception

All consumer equipment intended for the reception of digital television, for sale or rent or otherwise made available
in the Community, capable of de-scrambling digital television signals, shall possess the capability:

I to allow the de-scrambling of such signals according to the Common European Scrambling Algorithm as

administered by a recognised European standardisation body, currently ETSI;

I to display signals that have been transmitted in clear provided that, in the event that such equipment is rented,

the rentee is in compliance with the relevant rental agreement.

2. Interoperability for analogue and digital television sets

Any analogue television set with an integral screen of visible diagonal greater than 42 cm which is put on the
market for sale or rent in the Community shall be fitted with at least one open interface socket (as standardised by a
recognised European standardisation body) permitting simple connection of peripherals, especially additional
decoders and digital receivers.

Any digital television set with an integral screen of visible diagonal greater than 30 cm which is put on the market
for sale or rent in the Community shall be fitted with at least one open interface socket (either standardised by a
recognised European standardisation body or conforming to an industry-wide specification) permitting simple
connection of peripherals, and able to pass all the elements of a digital television signal. Apart from video and
audio streams, this includes conditional access information, the full application programme interface (API) command
set of the connected devices, service information and copy protection information.

The above functionality may be updated from time to time under the procedure referred to in Article 20(2).