Opinion of the Economic and Social Committee on the "Proposal for a Directive of the European Parliament and the Council on universal service and users' rights relating to electronic communications networks and services"
Date: 2001-03-01
Institutions: European Economic and Social Committee
Subjects: communications industry, competition law, consumer protection, electronic equipment, protection of privacy, telephone charges

11.5.2001

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Official Journal of the European Communities

C 139/15

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

(2001/C 139/05)

On 25 October 2000, the Council decided to consult the Economic and Social Committee, under Article
262 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 30 January 2001. The rapporteur
was Mr Herna´ndez Bataller.

At its 379th plenary session of 28 February and 1 March 2001 (meeting of 1 March 2001), the Economic
and Social Committee adopted the following opinion by 41 votes to three, with one abstention.

1.

Introduction

1.1.
One of the ESC’s express conditions for lending its
support to the current process of liberalising the telecommuni-
cations sector has always been that consumers and users must
have access to good quality essential services at an affordable
price, taking into account the technology available on the
market.

— European Parliament and Council Directive 97/33/EC of
30 June 1997 on interconnection in telecommunications
with regard to ensuring universal service and interop-
erability through application of the principles of Open
Network Provision (ONP) (2).

— European Parliament and Council Directive 97/51/EC of
amending Council Directives
6 October
90/387/EEC and 92/44/EEC for the purpose of adaptation
to a competitive environment in telecommunications (3).

1997

As part of a universal service in telecommunications,
1.2.
it is crucial that consumers have access to networks and
services that meet the standard of the technologies currently
available on the market if an information society that offers
everyone the same opportunities is to evolve.

— European Parliament and Council Directive 98/10/EC of
26 February 1998 on the application of open network
provision (ONP) to voice telephony and on universal
service for telecommunications in a competitive environ-
ment (4).

1.3.
The essential elements of the universal service are not
created simply by opening up competition, as competition
alone cannot guarantee a universal service. However, while it
is hoped that the free play of market forces and competition
will lead to a better allocation of resources, to a mobilisation
of considerable investment capital and to better prices for the
user, these instruments have their limits. There is a risk that
only some of the population will benefit and social and
territorial cohesion will therefore be weakened.

1.4.
The European Community has addressed the issue of
universal service in the following Directives and Communi-
cations:

— Commission Directive 96/19/EC, of 13 March 1996,
amending Directive 90/388/EC (‘Full competition Direc-
tive’) (1), which provides,
in particular, that Members
States must, no later than 1 January 1997, notify the
financial obligations with regard to
Commission of
universal service and publish them no later than 1 July
1997.

(1) OJ L 74, 22.3.1996.

— Communication from the Commission to the Council,
the European Parliament, the Economic and Social Com-
mittee and the Committee of the Regions, ‘Towards a new
framework for Electronic Communications infrastructure
and associated services — The 1999 Communications
Review’ (5).

— Communication from the Commission on the results of
the public consultation on the 1999 communications
review and orientations for the new regulatory frame-
work (6).

The Committee has expressed its views on these documents in
various opinions, which basically state that the priority of
universal service should be to encourage citizens to participate
in community life and thereby strengthen social and economic
cohesion (7).

(2) OJ L 199, 26.7.1997.
(3) OJ L 295, 29.10.1997.
(4) OJ L 101, 1.4.1998. ESC opinion; OJ C 133, 28.4.1997.
(5) COM(1999) 539 final.
(6) COM(2000) 239 final.
(7) ESC opinion on Universal service for telecommunications in the
perspective of a fully liberalized environment — OJ C 30, 30.1.1997;
ESC opinion on Services of General Interest — OJ C 368, 20.12.1999.

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1.5.
Following public consultation on the new legal frame-
work, the purpose of which is to create greater stability over
time, the Commission has presented a series of proposals
concerning the common regulatory framework, the processing
of personal data and protection of privacy, authorisation, the
radio spectrum, unbundled access to the local loop, universal
service and users’ rights, all
in the context of electronic
communications networks and services.

The aim is to bring the regulations into line with the
1.5.1.
technological
innovation and economic impetus that has
radically transformed the world of telecommunications, with-
out losing sight of the protection and promotion of certain
social objectives, such as improving the overall quality and
benefits of telecommunications or ensuring that they are
within people’s reach. This must be the purpose of regulatory
intervention.

1.5.2.
According to the US 1996 Telecommunications
Act (1), universal service means access to telecommunications
services as a basic social right of all citizens and essential for
their full participation in the community, constituting an
essential element in the freedom of expression. The concept of
universal service as laid down in this Law may be broken down
into a series of subsidiary concepts: availability (provision of
service on demand), accessibility (all users to be treated equally
in terms of price and quality of service), and affordability
(relation between the cost of
the service and the users’
purchasing power).

The Communication from the Commission on Ser-
1.5.3.
vices of General Interest in Europe (2) defines universal service,
within an environment of open and competitive telecommuni-
cations markets, as the minimum set of services of specified
quality to which all users and consumers have access in the
light of specific national conditions, at an affordable price.

1.5.4.
For the ESC, the risk of individuals, groups or entire
regions being excluded from the overall initiative is great and
manifold as non-computer access to universal services will
gradually fall into disuse as increasingly services are provided
electronically (3).

(1) See http://www.fcc.gov/telecom.html.
(2) COM(2000) 580 final of 20 September 2000.
(3) See opinion on eEurope 2002 — An information society for all —
Draft Action Plan. Rapporteur Mr Koryfidis. Opinion currently
being drafted.

2.

The Commission proposal

2.1. Aims of the proposal

2.1.1.
The aims of the proposal for a Directive are listed in
paragraph II of the explanatory memorandum and summarised
in Article 1(2). They are:

— to ensure the availability throughout the European Union
of good quality electronic communications services at an
affordable price;

— to deal with circumstances in which users’ and consumers’
needs are not satisfactorily met by commercial means;

— to ensure interoperability of consumer digital television

equipment.

2.1.2.

In attaining these objectives the Directive aims to:

— safeguard competition and real choice;

— when this is not sufficient, to impose universal service

obligations.

2.1.3.
The proposal should be seen in the context of the
proposed framework Directive on a common regulatory
framework for electronic communications networks and ser-
vices, and the Directive on the processing of personal data and
the protection of privacy in the electronic communications
sector.

2.1.4.
ates in its articles all the obligations regarding:

Furthermore, the proposal maintains and incorpor-

— retail tariff regulation for provision of access to and use
of the telephone network at fixed locations, as laid down
by Article 17 of Directive 98/10/EC (4) (Art. 16 of the
proposal);

— availability of leased lines, as laid down by Articles 3, 4,
5, 6, 7, 8 and 10 of Directive 92/44/EC (Art. 27 of the
proposal)

until,
in accordance with the market analysis procedure
provided for in Article 14 of the proposed framework directive,
the national regulatory authorities (NRA) decide that such
obligations shall be maintained, changed or withdrawn.

2.2. Scope of the universal service

2.2.1.
The proposal defines the universal service concepts
applicable to electronic communications networks and ser-
vices, in accordance with the criteria already established in the
Communication on universal service for telecommunications
in the perspective of a fully liberalised environment (5).

(4) OJ L 101, 1.4.1998.
(5) ESC opinion: OJ C 30, 30.1.1997.

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2.2.2.
It should be borne in mind that in some language
versions (e.g. the Portuguese version) of the draft directive the
obligation to provide users on request with a connection to
the public network at a fixed location and at an affordable
price is not qualified by the addition of the adjective ‘reason-
able’ before ‘requests for connection’
in Article 4(1). All
language versions of
therefore need to be
harmonised.

the proposal

2.2.3.
The guidelines on the availability of the universal
service are based on the principles of transparency, objectivity,
non-discrimination and minimum distortion of the market
and on the criteria of availability, reasonable access and
interconnection.

j)

k)

l)

that the general public and users and consumers in
particular be informed about the applicable prices and
tariffs and about the other terms and general conditions
for access to the service (Art. 18);

the interoperability of consumer digital television equip-
ment (Art. 20);

that all subscribers to telephone services, including mobile
services, can retain their number, independently of the
undertaking providing the service [Art. 25(1)];

2.3. Definition of universal service

In the proposed Directive, universal service is defined
2.3.1.
as a series of obligations imposed in the Member States by the
NRAs.

2.3.2.
obligation of the Member States to ensure:

As part of the universal service, it is the express

a)

b)

c)

d)

e)

f)

g)

h)

i)

that the connection to the public telephone network from
a fixed local number allows users to make and receive
national and international telephone calls, fax and data
communications, including Internet access [Art. 4(2)];

that users have access to a subscriber directory, in printed
or electronic form, or both, and the directory enquiry
service (Arts. 5 and 21);

that there are public pay telephones to meet the reason-
able needs of users (Art. 6);

free access to the European emergency call number
‘112’ and other national emergency numbers (Arts. 6(3)
and 22);

equivalent access for disabled users and users with special
needs (Art. 7);

clear differentiation of tariffs for additional facilities and
services [Art. 10(1)];

that the main service is not disconnected unjustifiably for
non-payment of the additional services [Art. 10(2)];

that the contributions made by undertakings to finance
universal service obligations be shown on users’ bills
[Art. 14(3)];

that telephone service providers conclude contracts with
users and consumers for the direct supply of telephone
services covered by Directives 93/13/EC and 97/7/EC
(Art. 17);

m)

that undertakings under their jurisdiction may be obliged
to carry specified radio and television programmes
(Art. 26) in return for appropriate compensation.

2.3.3.
to:

In particular the NRAs are to be given express powers

a)

b)

c)

d)

e)

f)

require undertakings, as a universal service obligation, to
provide tariff options or packages which differ from
those provided under normal commercial conditions for
consumers on low incomes or with specific social needs
[Art. 9(1)];

designate which undertakings are obliged to provide
the universal service and to ensure that they publish
information on their performance in the provision of
access and services [Art. 11(1)];

assess whether the provision of universal service rep-
resents an unfair burden [Art. 12(1)];

ensure that details of the mechanism for financing the
universal service are publicly available and that an annual
report is published giving the calculated cost of the
universal service obligations [Art. 14(1) and (2)];

require undertakings that provide electronic communi-
cations services to publish comparable, adequate and up-
to-date information on the quality of
their services
[Art. 19(1)];

require undertakings with significant market power to
enable their subscribers to access the services of any
interconnected provider of publicly available telephone
services [Art. 25(2)].

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2.4. Consultation and dispute resolution arrangements

The proposed Directive stipulates that the NRAs
2.4.1.
must provide for the consultation and participation of interest-
ed parties in all matters relating to user and consumer rights
and the quality of service (Art. 29).

2.4.2.
The proposal also stipulates that the Member States
have to ensure that responsibilities are met by means of
transparent, simple and inexpensive procedures for dealing
with users’ and consumers’ complaints, following the prin-
ciples set out in Recommendation 98/257/EC (Art. 30).

Finally,

2.4.3.
in the case of trans-border disputes the
proposal states that the system enshrined in Article 18 of the
draft framework Directive [Art. 30(2)] shall apply.

2.5. Review

2.5.1.
The proposal provides for a notification and moni-
toring procedure, to be implemented by the NRAs at national
level and the Commission, Parliament and Council at Com-
munity level.
In this, the Commission is assisted by the
Communications Committee set up in Article 19 of the
framework Directive.

2.5.2.
The proposal instructs the Commission to period-
ically review, for the first time not later than two years after
entry into force of the Directive, the scope of universal
service in the light of social, commercial and technological
developments (Art. 15).

2.6. Final provisions

Articles 34, 35 and 36 contain standard provisions on
transposition, entry into force and addressees.

3. General comments

3.1.
The ESC supports the Commission’s proposal since its
content is in keeping with its aims, although it could have
been simplified, especially the definition in Article 4(2).

allow users to make and receive local, national and inter-
national telephone calls and faxes, but also offer them rapid
public Internet access.

3.1.3.
The ESC therefore considers that from now on rapid
public access to the Internet should be included in universal
service. This would promote and foster the objectives of the
eEurope initiative (1) and is also essential if people on low
incomes, voluntary sectors, non profit-making organisations
and users from less populated regions are to have access to
advanced services and if an information society that meets the
European Union’s democratic and social objectives is to be
created.

3.1.4.
All the services that make up the universal service
must be made available to all users in their territory, irrespec-
tive of geographical
location, and at an affordable price,
thereby ensuring that users living in rural or high cost areas
can also access these services.

The ESC regrets that the proposal contains such vague
3.2.
concepts and terms; when it comes to transposing the Directive
into national law, this may lead to distortions of competition
or a failure to comply with Community legislation, as in
points 3.6, 4.4, 4.5, 4.6 and 4.9, among others, of this opinion.

3.3. Member States must use transparent, objective and
non-discriminatory procedures to designate undertakings to
provide universal service for all or part of their territory.

some fundamental

The proposal contains

short-
3.4.
comings, such as the criteria defining the universal service (e.g.
regarding accessibility). At the same time, it does not contain
harmonised common principles that would clarify the situ-
ation. The fact that the different Member States set their own
criteria may lead to differences in legislation and distortions of
competition. The Commission must
therefore issue rec-
ommendations to the NRAs and ensure in particular that the
measures adopted by the NRAs comply with the principles of
causality, coherence with other EU policies and pro-
portionality, in accordance with Community law.

3.1.1.
The ESC believes that in order to maintain economic
growth and stability and prevent social illiteracy, it is necessary
to encourage freedom of expression, pluralism and cultural
diversity, while at the same time promoting the general interest
and universal service.

3.5. While both the Commission and national regulatory
authorities must act within their powers, some concepts in
the proposal are a potential source of confusion, such as
‘reasonableness’, which should be deleted or clarified, and
‘public pay telephone’.

3.1.2.
The ESC generally agrees with the current concept of
universal service based on connection to the public telephone
network at a fixed location and access to publicly available
telephone services at a fixed location through at least one
operator. The connection provided must, however, not only

(1) See opinion on eEurope 2002 — An information society for all —
Draft Action Plan. Rapporteur Mr Koryfidis. Opinion currently
being drafted.

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4.

Specific comments

The ESC agrees completely with the Commission that
4.1.
the concept of universal service is constantly evolving and
must be revised periodically to reflect advances in technology,
market developments and changes in user demand. However,
the proposal needs to set out clearly the criteria to be used in
such a revision so as to ensure greater legal certainty and
prevent the rapid growth of the information society and New
Economy leading to social exclusion.

4.1.1.
The Committee considers that when the concept of
universal service is periodically reviewed, particular account
should be taken of the following criteria:

a)

b)

technological advances;

the configuration of telecommunications services and
information services;

c)

to what extent information technologies and services

— are essential for education, telework, health or public

safety and:

— subscribed to by a substantial majority of residential

customers;

— provided via public communications networks;

— compatible with the public interest, useful and

respond to public needs;

— allow citizens to participate more fully.

4.1.2.
The ESC believes that directory enquiry services,
operator assistance services and directories must be provided
in a format whereby the majority of the population has
practical and not merely token access to them on non-
discriminatory terms. Information also needs to be centralised
while protecting its commercial value for operating companies.
Otherwise it could be very onerous for users to obtain
information whenever several different service providers are
involved.

The designation of undertakings to provide these
4.1.3.
information services must respect the principles of public
tendering; these undertakings must abide by the rules of the
single market, especially those concerning the protection of
personal data.

consultation provided for in Article 29 is insufficient and
could mean a reduction in the quality of life of citizens, with
repercussions for economic and social cohesion. However, in
accordance with the subsidiarity principle, this decision should
be taken by the NRAs when it is absolutely necessary to
provide the service by other means and it does not impact
adversely on economic and social cohesion.

4.2.
The ESC calls on the Commission to make specific
measures for disabled users and users with special needs
mandatory rather than optional. By taking into account their
social situation and adopting satisfactory ‘special schemes’ for
their benefit, the most vulnerable users’ groups will be offered
the proper protection.

4.3.
The ESC agrees with the Commission’s criteria regard-
ing the level and structure of tariffs, affordability and control of
expenditure and the quality of service provided by designated
operators. Guaranteeing all citizens all communication services
at an affordable price must be a priority if they are to be able
to participate in the information society.

4.4.
There also needs to be a predetermined procedure
for disconnecting services, of which consumers have been
informed and which is based on objective criteria.

Quality of service must be assessed according to clear
4.5.
parameters that are easy to understand for the average
consumer. These requirements are not met by Annex III to the
proposal. It is also unacceptable that under Article 29(2) of the
proposed Directive, national regulatory authorities in the
Member States are not obliged to require publication of
information on the quality of service provided by network
operators and service providers.

4.6.
Regarding calculating the costs of the universal service,
the proposal does not define criteria relating to an ‘excessive’
or ‘unfair burden’. Annex IV defines the concept of net cost
that of unfair burden. These criteria should be
but not
harmonised and clarified so that
the national regulatory
authorities can apply them or determine the amount.

4.1.4.
The ESC shares the Commission’s view that obli-
gations may be imposed on operators so as to ensure that
public pay telephones (cards and coins) meet users’ needs in
terms of geographical coverage, number of telephones and
quality of services.

General speaking the Committee believes that giving
4.1.5.
a Member State the option of not applying the aforementioned
requirements in all or part of its territory is excessive, as the

4.7.
Regarding the financing of universal service obli-
gations, the ESC reiterates its view — as previously expressed
in various opinions — that all telecommunications service
providers using the public telephone network must contribute
in a proportionate and fair way to all aspects of this service,
including its financial aspects. The ESC therefore argues that
the universal service should be financed by all operators in line
with their market share and degree of involvement in that
market in the event that a company is subject to an excessive
burden.

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4.8.
The ESC agrees with the Commission proposal’s aim
to guarantee consumers a high level of protection, particularly
in the following areas:

— the possibility of regulating retail tariffs so that when
market conditions are not fully competitive NRAs can set
maximum tariffs;

— the rules on contracts with direct

telephone service
providers, as greater transparency in contracts will allow
consumers to make an informed choice.

4.9.
The provisions on the transparency and publication of
information for consumers are essential for users and for SMEs
in particular. Nevertheless, the Committee considers that on
this point the proposal fails to mention the following:

— the medium, format and content of information, which

must be relevant and sufficient;

— quality of service, the criteria and standards for which

should be published;

— accurate and transparent information about the prices of

individual calls that have been made or received.

4.9.1.
The ESC is particularly in favour of the proposed
provisions on number portability, carrier selection and pre-
selection. Neither conditional sales, technical measures or any
other provisions that limit the consumer’s choice of operator
or service provider should prevent consumers transferring a
number.

The Committee considers that the user should have
4.9.2.
the possibility of identifying the call when it is received
through other operators (interconnection).

4.10.
Consumers and users must have access to simple,
inexpensive and independent complaints and disputes pro-
cedures, and clear and effective mechanisms for lodging
appeals. The ESC therefore reiterates that the ‘European claims
form’ prepared by the Commission must be used and promoted
for complaints to the NRAs.

Brussels, 1 March 2001.

4.11.
The ESC considers that the provisions on the interop-
erability of consumer digital television equipment and the
obligation to transmit specified radio and television broadcasts,
as set out in the proposal, are particularly beneficial to the
consumer, even if they may not have been included in the best
place.

The consultation of interested parties provided for in
4.12.
Article 29 is insufficient as it makes no provision for consul-
tation at European level. The ESC therefore proposes setting
up, in line with the Oulu Declaration (1), a telecommunications
forum or observatory at the ESC so that the views of interested
sectors and parties are taken into account at Community level.

5. Conclusions

The Committee considers that the following principles

5.1.
must govern universal service:

a)

b)

c)

d)

e)

f)

g)

access to high-quality services at fair, appropriate and
affordable prices;

rapid public access to information and advanced telecom-
munications services in all regions;

access for all consumers, irrespective of their income, in
rural areas and areas where providing the service is
expensive, to telecommunications and information ser-
vices at prices comparable to those in urban zones;

fair and non-discriminatory contribution by all telecom-
munications service providers to maintaining and advanc-
ing universal service;

the existence of specific, predictable and adequate mech-
anisms for maintaining and extending universal service;

any additional principles deemed necessary by the NRAs
to protect the public interest;

the creation of a telecommunications forum or observ-
atory.

(1) Conclusions of the Presidency concerning the hearing on The
Information Society and Job-Creation to the minutes of the
11th meeting of the TEN Section on 6 and 7 September 1999.

The President

of the Economic and Social Committee

Göke FRERICHS