Opinion of the Economic and Social Committee on the "Proposal for a Directive of the European Parliament and of the Council on access to, and interconnection of, electronic communications networks and associated facilities"
Date: 2001-01-24
Institutions: European Economic and Social Committee
Subjects: communications policy, competition, electronic equipment, harmonisation of standards, systems interconnection, telecommunications

C 123/50

EN

Official Journal of the European Communities

25.4.2001

4.6. Article 7 (of Regulation (EC) No 2027/97)

In the ESC’s view, the deadline by which the Commission is to
draw up its report should be fixed so as to allow use of the
report’s conclusions by the deadlines indicated in Article 24 of
the Montreal Convention concerning the review of liability
limits.

However,

4.7.
in the ESC’s view, the liability ceiling of
1 000 SDR for loss, damage or delay of luggage is too low. It
would seem unrealistic for ordinary passengers to be expected
to make a special declaration of interest in delivery of their
baggage at destination.

Nonetheless, the ESC does understand that the proposed
amendment of Regulation (EC) No 2027/97, on this point
alone, duplicates the corresponding provision in the Montreal
Convention.

5. Conclusion

Subject to the above comments, the Economic and Social
Committee supports the Commission proposal for a Regu-
lation of the European Parliament and of the Council amending
Regulation (EC) No 2027/97 on air carrier liability in the event
of accidents (COM(2000) 340 final). It also urges the Member
States to ratify the 1999 Montreal Convention as speedily as
possible.

Brussels, 24 January 2001.

The President

of the Economic and Social Committee

Göke FRERICHS

Opinion of the Economic and Social Committee on the ‘Proposal for a Directive of the European
Parliament and of the Council on access to, and interconnection of, electronic communications
networks and associated facilities’

(2001/C 123/10)

On 25 October 2000 the Council decided to consult the Economic and Social Committee, under
Article 95 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for
preparing the Committee’s work on the subject, adopted its opinion on 7 December 2000. The rapporteur
was Mr Lagerholm.

At its 378th plenary session on 24 and 25 January 2001 (meeting of 24 January) the Economic and
Social Committee adopted the following opinion with 82 votes in favour and two abstentions.

1.

The Commission’s Proposal

1.1.
Against the background of the draft Directive on a
common regulatory framework for electronic communications
networks and services (1) the proposed Directive is intended to

harmonise the way in which access to, and interconnection of,
electronic communications networks and associated facilities
are regulated. The aim is to establish a regulatory framework
for relations between suppliers of networks and services so as
to ensure sustainable competition and interoperability of
services to the benefit of consumers.

(1) COM(2000) 393 final; ESC opinion CES 50/2001; see also ESC
opinion in OJ C 204, 18.7.2000 on ‘Towards a new framework for
electronic communications infrastructure and associated services.
The 1999 communications review’ (COM(1999) 539 final).

1.2.
The Directive provides legal certainty by establishing
clear criteria for regulatory intervention and clear limitations
on what obligations can be imposed, and in which circum-
stances, whilst at
the same time allowing for sufficient
flexibility.

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Official Journal of the European Communities

C 123/51

1.3.
All operators of electronic communications networks
will have a right and — when requested by other authorised
undertakings — an obligation to conclude interconnection
agreements with each other for the purpose of providing the
services in question,
in order to ensure access to, and
interoperability of, services throughout the Community.

redress market failures in providing effective and healthy
infrastructure competition. Where there is market failure the
regulatory response needs to be specific to the problem,
appropriate and temporary’.

1.4. Member States have to maintain all previous obli-
gations concerning access and interconnection under Direc-
tives 97/33/EC (1), 98/10/EC (2) and 92/44/EC (3), as well as
under the proposed Regulation on unbundled access to the
local loop (4), until such time as indicated otherwise by the
findings of a market analysis (5).

1.5.
The competent national regulatory authorities (NRAs)
are to encourage and secure adequate network access and
interconnection, and interoperability of services. Following a
market analysis they may impose obligations on operators with
significant market power as regards transparency, accounting
separation, non-discrimination and lastly, publication of a
sufficiently unbundled reference offer. The NRAs may also
require operators to grant access to, and use of, specific
facilities and/or associated services. In conclusion, they may
(with due consideration of operators’ investment risks) impose
price controls, including cost orientation of prices, and obli-
gations concerning cost accounting systems.

2. Comments

On the subject of access and interconnection, the
2.1.
Committee,
in its Opinion on the 1999 Communications
Review, stated that ‘regulatory intervention is justified only to

2.2.
It also took the view that ‘if it is deemed necessary to
take short term action on regulating access conditions (such as
in the case of local loop unbundling), attention should mainly
focus on achieving commerce-based agreements. If this is not
feasible, the methodology used for pricing unbundled access
should create incentives for infrastructure investments (e.g., by
time limits on specific costing mechanisms) and be applied in
a consistent manner across the Member States. The develop-
ment of alternative access possibilities needs to be monitored
very closely and any recommendations to NRAs on access
should include an obligation to forbear from regulatory
interventions when alternative means of access are available’.

The ESC notes that the Commission’s proposal

2.3.
is
generally in line with the views expressed in the above
Opinion.

The proposed Directive on access and interconnection
2.4.
is possibly the most decisive proposal as regards competition
and investment propensity. The fundamental reliance on
competition legislation also in this part of the new regime is,
in the Committee’s view, likely to generate a sound balance
between regulation and market opportunities, for both cus-
tomers and suppliers.

(1) European Parliament and Council Directive 97/33/EC of 30 June
1997 on interconnection in telecommunications with regard to
ensuring universal service and interoperability through application
of the principles of Open Network Provision, OJ L 199 of
26.7.1997, as amended by European Parliament and Council
Directive 98/61/EC of 24 September 1998 with regard to operator
number portability and carrier pre-selection, OJ L 268, 3.10.1998.
(2) European Parliament and Council Directive 98/10/EC of 26 Febru-
ary 1998 on the application of open network provision to voice
telephony and on universal service for telecommunications in a
competitive environment, OJ L 101, 1.4.1998.

(3) Directive of 5 June 1992 on the application of open network
provision to leased lines, OJ L 165, 19.6.1992, as amended by
Directive 97/51/EC, OJ L 295, 29.10.1997 and Commission
Decision No 80/98/EC of 7 January 1998.

(4) COM(2000) 394 final; ESC opinion in OJ C 14, 16.1.2001.
(5) In accordance with Article 14 of

the proposed Directive

COM(2000) 393 final.

The proposal indicates that the interconnection con-
2.5.
cept
is likely to vary considerably between applications
and therefore might not lend itself to traditional regulatory
intervention. However, it seems to be a considerable leap from
this general observation to practical conclusions about when
interconnection is still relevant and if it needs to be regulated.

2.5.1.
In its opinion (point 4.10.5) on the proposal for a
Framework Directive, the Committee stressed that there was
likely to be a rapid establishment of modern communications
networks competing in parallel. Transparency is likely to be
the dominant trend here, in order to maximise network traffic.
As is already the case with the Internet, any practical problems
are either solved between the parties where they arise, or the
traffic seeks out another route. The latter was seldom possible

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Official Journal of the European Communities

25.4.2001

with the traditional telephony network, and this was behind a
potentially interventionist regulation of interconnection. The
Committee believes it would be wise to refrain from any
similar attempts to regulate the new networks until it has been
shown that their alternative solutions would not operate
satisfactorily. Furthermore, any IP regulation would need to be
considerably more complex than that for telephony, and risk
causing serious market disruption. Unlike the traditional
telephony sector, the IP sector does not have a fixed set of
services which can be defined using narrow quality standards.

The Internet,

2.6.
is based on technical
for example,
availability for anybody with the necessary end-user capacity.
Universal accessibility is the basic principle for the net. If an
operator fails to fulfil this criterion, he will have no net
customers and be unable to sell advertising space. The
Committee therefore feels there is scant reason to include the
Internet in an interconnection regulation. In addition, end-
users have several inexpensive alternatives for accessing the
net in their own country or internationally. Usually access is
provided through universal
telephony service, making it
possible to connect with the net by modem.

2.7.
The Committee would have welcomed more detailed
examples which could have made it easier to understand where
the Commission believes that new interconnection regulation
might be applied.

Brussels, 24 January 2001.

2.8.
The Committee harbours no doubts that the new
approach — namely, to refrain as far as possible from sector-
specific regulation and instead rely on increased application of
general competition law — is fully endorsed, in principle, by
the Commission itself. However, the wording of a couple of
points in the proposed Directive on access and interconnection
could be understood to imply that the Commission is not fully
prepared to rely on this strategy.

2.8.1.
For instance the strategy section of the explanatory
memorandum to the proposed directive states that continued
monopoly advantages may still adversely influence compe-
tition. Few would dispute that, but in the next sentence a
similar assumption is presented to motivate ex-ante sector
regulation for mobile markets with only four or five operators.
The ESC believes that until an evaluation of effective compe-
tition has been carried out under the new regime no such
general assumption can be made. It should also be observed
that the limitation of the number of licences in some countries
seems to be due to administrative deficiencies rather than real
spectrum scarcity.

There also seems to be a risk that legal certainty
2.8.2.
could be undermined by the statement in Article 8 that the
Commission, in exceptional cases, can mandate the NRAs to
apply more stringent obligations than those of Articles 9 to
13, provided such an expansion is ‘justified in the light of the
objectives laid down in Article 1 of this Directive’. In the
Committee’s view, it is doubtful whether it can be considered
acceptable to generate such uncertainty regarding which ex-
ante measures can be relevant. If an operator exercising a
dominant position abuses his influence, the general compe-
tition legislation comes into play.

The President

of the Economic and Social Committee

Göke FRERICHS