Common Position (EC) No 39/2001 of 17 September 2001 adopted by the Council, acting in accordance with the procedure referred to in Article 251 of the Treaty establishing the European Community, with a view to adopting a European Parliament and Council Directive on universal service and users' rights relating to electronic communications networks and services (Universal Service Directive)
Date: 2001-09-17
Institutions: Council of the European Union
Subjects: computer network, consumer protection, information network, provision of services, transmission network

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COMMON POSITION (EC) No 39/2001

adopted by the Council on 17 September 2001

with a view to adopting Directive 2001/.../EC of the European Parliament and of the Council of ...
on universal service and users’ rights relating to electronic communications networks and
services (Universal Service Directive)

(2001/C 337/04)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

Having regard to the Treaty establishing the European Com-
munity, and in particular Article 95 thereof,

as anti-competitive per se, provided they are adminis-
tered in a transparent, non-discriminatory and competi-
tively neutral manner and are not more burdensome
than necessary for the kind of universal service defined
by the Member.

Having regard to the proposal from the Commission (1),

Having regard to the opinion of the Economic and Social
Committee (2),

(4)

Having regard to the opinion of
Regions (3),

the Committee of

the

Acting in accordance with the procedure laid down in
Article 251 of the Treaty (4),

Whereas:

Ensuring universal service (that is to say, the provision
of a defined minimum set of services to all end-users at
an affordable price) may involve the provision of some
services to some end-users at prices that depart from
those resulting from normal market conditions. How-
ever, compensating undertakings designated to provide
such services in such circumstances need not result in
any distortion of competition, provided that designated
undertakings are compensated for the specific net cost
involved and provided that
the net cost burden is
recovered in a competitively neutral way.

(1)

(2)

(3)

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 should evolve to reflect advances in technology,
market developments and changes in user demand. The
regulatory framework established for the full liberalis-
ation of the telecommunications market in 1998 in the
Community defined the minimum scope of universal
service obligations and established rules for its costing
and financing.

(5)

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.

Under Article 153 of the Treaty, the Community is to
contribute to the protection of consumers.

(6)

The Community and its Member States have undertaken
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

The network termination point represents a boundary
for regulatory purposes between the regulatory frame-
work for electronic communication networks and ser-
vices and the regulation of telecommunication terminal
equipment. Defining the location of the network termin-
ation point is the responsibility of the national regulatory
authority, where necessary on the basis of a proposal by
the relevant undertakings.

(1) OJ C 365 E, 19.12.2000, p. 238.
(2) OJ C 139, 11.5.2001, p. 15.
(3) OJ C 144, 16.5.2001, p. 60.
(4) Opinion of the European Parliament of 13 June 2001 (not yet
published in the Official Journal), Council Common Position of
17 September 2001 and Decision of the European Parliament of
... (not yet published in the Official Journal).

(7) Member States should continue to ensure that

the
services set out in chapter II are made available with the
quality specified to all end-users in their territory,
irrespective of their geographical location, and, in the
light of specific national conditions, at an affordable
price. Member States may, in the context of universal

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service obligations and in the light of national con-
ditions, take specific measures for consumers in rural or
geographically isolated areas to ensure their access to
the services set out in chapter II and the affordability of
those services, as well as ensure under the same con-
ditions this access,
in particular for the elderly, the
disabled and for people with special social needs. Such
measures may also include measures directly targeted at
consumers with special social needs providing support
to identified consumers,
for example by means of
specific measures, taken after the examination of individ-
ual requests, such as the paying off of debts.

(8)

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 narrowband
network connection, the provision of which may be
restricted by Member States to the end-user’s primary
location/residence, and does not extend to the integrated
services digital network (ISDN) which provides two or
more connections capable of being used simultaneously.
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 obli-
gations. 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 speed of Internet access experienced by a
given user may depend on a number of factors including
the provider(s) of Internet connectivity as well as the
given application for which a connection is being used.
The data rate that can be supported by a single
narrowband connection to the public 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 lower than 56 kbit/s. Flexibility is
required on the one hand to allow Member States to take
measures where necessary to ensure that connections are
capable of supporting such a data rate, and on the other
hand to allow Member States where relevant to permit
data rates below this upper limit of 56 kbits/s in order,
for example,
the capabilities of wireless
technologies (including cellular wireless networks) to
deliver universal service to a higher proportion of the
population. This may be of particular importance in
some accession countries where household penetration
of traditional telephone connections remains relatively
low.
In specific cases where the connection to the
public telephony network at a fixed location is clearly
insufficient to support satisfactory Internet access, Mem-
ber States should be able to require the connection to be

to exploit

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 con-
cerned, the net effect may be included in any net cost
calculation of universal service obligations.

(9)

The provisions of this Directive do not preclude Member
States from designating different undertakings to provide
the network and service elements of universal service.
Designated undertakings providing network elements
may be required to ensure such construction and
maintenance as are necessary and proportionate to meet
all reasonable requests for connection at a fixed location
to the public telephone network and for access to
publicly available telephone services at a fixed location.

(10) Affordable price means a price defined by Member
States at national level in the light of specific national
conditions, and may involve setting common tariffs
irrespective 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.

(11) Directory information and a directory enquiry service
constitute an essential access tool for publicly available
telephone services and form 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 (includ-
ing fixed and mobile numbers) and want this infor-
mation to be presented in a non-preferential fashion.
Under Directive 2001/.../EC of the European Parliament
and of the Council of ... concerning the processing of
personal data and the protection of privacy in the
(Data Protection
electronic communications
Directive) (1), subscribers have the right to determine
which, if any, of their personal information is included
in a public directory.

sector

(1) JO C ...

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(12)

For the citizen, it is important for there to be adequate
provision of public pay telephones, and for users to be
in
able to call emergency telephone numbers and,
particular, the single European emergency call num-
ber (‘112’) free of charge from any telephone, including
public pay telephones, without the use of any means of
payment. Insufficient information about the existence
of ‘112’ deprives citizens of the additional safety ensured
by the existence of this number at European level
especially during their travel in other Member States.

(13) 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
disabled users and users with special social needs.
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 social needs to
access emergency services ‘112’ and to give them a
similar possibility of choosing between different oper-
ators or service providers as other consumers. The
provider of universal service should not take measures
to prevent users from benefiting fully from services
offered by different operators or service providers, in
combination with its own services offered as part of
universal service.

(14) The importance of access to and use of the public
telephone network at a fixed location is such that it
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, where appropriate
taking into account the ability and the willingness of
undertakings to accept all or part of the universal
service obligations. 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, including by competi-
tive or comparative selection procedures. Corresponding
obligations could be included as conditions in authoris-
ations to provide publicly available services.

(15) Member States should monitor the situation of con-
sumers with respect to their use of publicly available
telephone services and in particular with respect to
affordability. The affordability of telephone service is
related to the 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 con-
sumers through obligations imposed on undertakings
designated as having universal service obligations. These
obligations include a specified level of itemised billing,
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
prepayment means and the possibility for consumers to
offset up-front connection fees. Such measures may
need to be reviewed and changed in the light of market
developments. Current conditions do not warrant a
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 pro-
visions in future should consider whether there is a
possible need to alert subscribers for these reasons.

(16)

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 to essential telephone services
pending resolution of the dispute. Member States may
decide that such access may continue to be provided
only if
the subscriber continues to pay line rental
charges.

(17) 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
which have been designated as having universal service
obligations. In relation to the quality of service attained
by such undertakings, national regulatory authorities
should be able to take appropriate measures where they
deem it necessary. National regulatory authorities should
also be able to monitor the achieved quality of services of
other undertakings providing public telephone networks
and/or publicly available telephone services to users at
fixed locations.

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(18) Member States should, where necessary, establish mech-
anisms for 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 undertakings, and is compatible with the
provisions of Articles 87 and 88 of the Treaty.

(19) Any calculation of the net cost of universal service
should take due account of costs and revenues, as well
as the intangible benefits resulting from providing
universal service but should not hinder 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.

(20) Taking into account intangible benefits means that an
estimate in monetary terms, of the indirect benefits that
an undertaking derives by virtue of
its position as
provider of universal service, should be deducted from
the direct net cost of universal service obligations in
order to determine the overall cost burden.

(21) When a universal service obligation represents an unfair
burden on an undertaking, it is appropriate to allow
Member States to establish mechanisms for efficiently
recovering net costs. Recovery via public funds consti-
tutes 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. Member
States should be able to finance the net costs of
different elements of universal service through different
mechanisms, and/or to finance the net costs of some or
the mechanisms or a
all elements from either of
combination of both. In the case of cost recovery by
means of levies on undertakings, Member States should
ensure that that the method of allocation amongst them
is based on objective and non-discriminatory criteria
in accordance with the principle of pro-
and is
portionality. 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 obli-
gations, 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 particu-
lar in the case of sharing mechanisms, those of non-
discrimination and proportionality. Any funding mech-

anism 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.

(22) Where Member States decide to finance the net cost of
universal service obligations from public funds, this
should be understood to comprise funding from general
government budgets including other public financing
sources such as State lotteries.

(23) The net cost of universal service obligations may be
shared between all or certain specified classes of under-
taking. Member States should ensure that the sharing
mechanism respects the principles of transparency, least
market
pro-
portionality. ‘Least market distortion’ means that contri-
butions should be recovered in a way that as far as
possible minimises the impact of the financial burden
falling on end-users, for example by spreading contri-
butions as widely as possible.

non-discrimination

distortion,

and

(24) 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 should 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.

(25) 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,
which are defined at a Community level, should be
periodically reviewed with a view to proposing that the
scope be changed or redefined. Such a review should
take account of evolving social, commercial and techno-
logical 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

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that

that certain technological choices are not artificially
promoted above others,
a disproportionate
financial burden is not imposed on sector undertakings
(thereby endangering market developments and inno-
vation) 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 to impose
on market players financial 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 contri-
butions from market players.

that

important

(26) More effective competition across all access and service
markets will give greater choice for users. The extent
of effective competition and choice varies across the
Community and varies within Member States between
geographical areas and between access and 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
services provided by an
the
reflect
undertaking with significant market power
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 may act in
various ways to inhibit entry or distort competition,
for example by charging excessive prices,
setting
predatory prices, compulsory bundling of retail services
or showing undue preference to certain customers.
Therefore, national regulatory authorities should have
powers to impose, as a last resort and after due
consideration,
regulation on an undertaking
with significant market power. Price cap regulation,
geographical averaging or similar instruments, as well
as non-regulatory measures such as publicly available
comparisons of retail tariffs, may be used to achieve
the twin objectives of promoting effective competition
whilst pursuing public interest needs, such as main-
taining 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
including the imposition of any
duties in this area,
tariff controls. However, regulatory controls on retail
services
should only be imposed where national
regulatory authorities consider that relevant wholesale
measures or measures regarding carrier selection or
preselection would fail
to achieve the objective of
ensuring effective competition and public interest.

retail

(27) Where a national regulatory authority imposes obli-
gations to implement a cost accounting system in order
to support price controls, it may itself undertake an
annual audit
to ensure compliance with that cost
accounting system, provided that it has the necessary
qualified staff, or it may require the audit to be carried
out by another qualified body,
the
operator concerned.

independent of

(28)

It
is considered necessary to ensure the continued
application of the existing provisions relating to the
minimum set of leased line services in Community
telecommunications legislation, in particular in Council
Directive 92/44/EEC of 5 June 1992 on the application
of open network provision to leased lines (1), until such
time as national regulatory authorities determine,
in
accordance with the market analysis procedures laid
down in Directive 2001/.../EC of the European Parlia-
ment and of the Council of ... on a common regulatory
framework for electronic communications networks and
services (Framework Directive) (2), that such provisions
are no longer needed because a sufficiently competitive
market has developed in their territory. The degree of
competition is likely to vary between different markets
of leased lines in the minimum set, and in different parts
of the territory. In undertaking the market analysis,
national regulatory authorities should make separate
leased lines in the
assessments for each market of
minimum set,
taking into account their geographic
dimension. Leased lines services constitute mandatory
services to be provided without recourse to any compen-
sation mechanisms. The provision of leased lines outside
the minimum set leased lines should be covered by
general retail regulatory provisions rather than specific
requirements covering the supply of the minimum set.

(29) National regulatory authorities may also, in the light of
the relevant market, require mobile
an analysis of
operators with significant market power to enable their
subscribers to access the services of any interconnected
provider of publicly available telephone services on a
call-by-call basis or by means of preselection.

(30) Contracts are an important tool for users and consumers
to ensure a minimum level of transparency of infor-
mation and legal security. Most service providers in a
competitive environment will conclude contracts with
their customers for reasons of commercial desirability.

(1) OJ L 165, 19.6.1992, p. 27. Directive as last amended by
Commission Decision 98/80/EC (OJ L 14, 20.1.1998, p. 27).

(2) See page 34 of this Official Journal.

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In addition to the provisions of this Directive, the
requirements of existing Community consumer protec-
in particular
tion legislation relating to contracts,
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 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
legal
certainty in respect of their contractual relations with
their direct telephone service provider, such that the
contractual terms, conditions, quality of service, con-
dition for termination of the contract and the service,
compensation measures and dispute resolution are speci-
fied in their contracts. Where service providers other
than direct telephone service providers conclude con-
tracts with consumers, the same information should be
included in those contracts as well. The measures
to ensure transparency on prices, tariffs, terms and
conditions will
increase the ability of consumers to
optimise their choices and thus to benefit fully from
competition.

(31)

End-users should have access to publicly available infor-
mation on communications services. 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 compara-
bility between service providers and between Member
States. Undertakings providing communications ser-
vices, operating in a competitive environment, are likely
to make adequate and up-to-date information on their
services publicly available for reasons of commercial
advantage. National regulatory authorities should non-
etheless be able to require publication of such infor-
mation where it is demonstrated that such information
is not effectively available to the public.

(32)

End-users 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 could be adapted from time to time in
the light of technological and market developments.

(33)

It
is desirable to enable consumers to achieve the
fullest connectivity possible to digital television sets.

(1) OJ L 95, 21.4.1993, p. 29.
(2) OJ L 144, 4.6.1997, p. 19.

is likewise important

Interoperability is an evolving concept
in dynamic
markets. Standards bodies should do their utmost to
ensure that appropriate standards evolve along with the
technologies concerned.
to
It
ensure that connectors are available on television sets
that are capable of passing all the necessary elements of
a digital signal, including the audio and video streams,
conditional access information, service information,
application program interface (API)
information and
copy protection information. This Directive therefore
ensures that the functionality of the open interface for
digital television sets is not limited by network operators,
service providers or equipment manufacturers and con-
tinues to evolve in line with technological developments.

(34) All end-users should continue to enjoy access to operator
assistance services whatever organisation provides access
to the public telephone network.

(35) The provision of directory enquiry services and direc-
tories is already open to competition. The provisions of
this Directive complement the provisions of Directive
2001/.../EC (Data Protection Directive), by giving sub-
scribers a right to have their personal data included in a
printed or electronic directory. All service providers
which assign telephone numbers to their subscribers are
obliged to make relevant information available in a fair,
cost-oriented and non-discriminatory manner.

(36)

It is important that users should be able to call the single
European emergency number ‘112’, and any other
national emergency telephone numbers, free of charge,
from any telephone, including public pay telephones,
without the use of any means of payment. 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 be made available to the
emergency services, will improve the level of protection
and the security of users of ‘112’ services and assist the
emergency services in the discharge of their duties,
provided that the transfer of calls and associated data to
the emergency services concerned is guaranteed. Steady
information technology improvements will progress-
ively support
the simultaneous handling of several
languages over the networks at a reasonable cost. This
in turn will ensure additional safety for European citizens
using the ‘112’ emergency call number.

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(37)

ITU recommendation

Easy access to international telephone services is vital
for European citizens and European businesses. ‘00’ has
already been established as the standard international
telephone access code for the Community. Special
arrangements
for making calls between adjacent
locations across borders between Member States may be
in
established or continued. The ITU has assigned,
E.164,
accordance with
code ‘3883’ to the European telephony numbering space
(ETNS).
In order to ensure connection of calls to
the ETNS, undertakings operating public telephone
networks should ensure that calls using ‘3883’ are
directly or indirectly interconnected to ETNS serving
networks specified in the relevant European telecom-
munications standards institute (ETSI) standards. Such
interconnection arrangements should be governed by
the provisions of Directive 2001/..../EC of the European
Parliament and of the Council of ..... on access to, and
interconnection of, electronic communications net-
works and associated facilities (Access Directive) (1).

(38) Access by end-users to all numbering resources in the
Community is a vital precondition for a single market.
It should include freephone, premium rate, and other
non-geographic numbers, except where the called sub-
scriber has chosen, for commercial reasons, to limit
access from certain geographical areas. Tariffs charged to
parties calling from outside the Member State concerned
need not be the same as for those parties calling from
inside that Member State.

(39) Tone dialling and calling line identification facilities are
normally available on modern telephone exchanges and
can therefore increasingly be provided at little or no
expense. Tone dialling is increasingly being used for user
interaction with special services 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 obligations to
provide these facilities when they are already available.
Directive 2001/.../EC (Data Protection Directive) safe-
guards 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. The development of these services on a
pan-European basis would benefit consumers and is
encouraged by this Directive.

(40) Number portability is a key facilitator of consumer
choice and effective competition in a competitive tele-
communications 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

(1) See page 1 of this Official Journal.

network at fixed and non-fixed locations is not covered
by this Directive. However, Member States may apply
provisions for porting numbers between networks pro-
viding services at a fixed location and mobile networks.

(41) The impact of number portability is considerably
strengthened when there is transparent tariff
infor-
mation, both for end-users who port their numbers and
also for end-users who call those who have ported their
numbers. National regulatory authorities should, where
feasible, facilitate appropriate tariff transparency as part
of the implementation of number portability.

(42) When ensuring that pricing for interconnection related
to the provision of number portability is cost-oriented,
national regulatory authorities may also take account of
prices available in comparable markets.

(43) Currently, Member States impose certain ‘must carry’
obligations on networks for the distribution of radio or
television broadcasts to the public. Member States
should be able to lay down proportionate obligations
on undertakings under their jurisdiction, in the interest
of
legitimate public policy considerations, but such
obligations should only be imposed where they are
necessary to meet general
interest objectives clearly
defined by Member States in conformity with Com-
munity law and should be proportionate, transparent
and subject to periodical review. ‘Must carry’ obligations
imposed by Member States should be reasonable, that is
they should be proportionate and transparent in the
light of clearly defined general interest objectives, and
could, where appropriate, entail a provision for pro-
portionate remuneration.

(44) Networks used for the distribution of radio or television
broadcasts to the public include cable, satellite and
terrestrial broadcasting networks. They might also
include other networks to the extent that a significant
number of end-users use such networks as their principal
means to receive radio and television broadcasts.

(45)

Services providing content such as the offer for sale of a
package of sound or television broadcasting content are
not covered by the common regulatory framework
for electronic communications networks and services.
Providers of such services should not be subject to
universal service obligations in respect of these activities.
This Directive is without prejudice to measures taken at
national level, in compliance with Community law, in
respect of such services.

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(46) 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. Accordingly, Member States may undertake
additional measures (such as facilitating the development
of infrastructure or services in circumstances where the
market does not satisfactorily address the requirements
of end-users or consumers), in conformity with Com-
munity law. As a reaction to the Commission’s eEurope
initiative,
the Lisbon European Council of 23 and
24 March 2000 called on Member States to ensure that
all schools have access to the Internet and to multimedia
resources.

(47)

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 end-users’
rights. Effective procedures should be available to deal
with disputes between at least consumers, on the one
hand, and undertakings providing publicly avail-
able communications services, on the other. Member
States should take full account of Commission Rec-
ommendation 98/257/EC of 30 March 1998 on the
principles applicable to the bodies responsible for out-
of-court settlement of consumer disputes (1).

(48) 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.

(49)

Since the objectives of the proposed action, namely
setting a common level of universal service for telecom-
munications 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 and also achieving a harmonised
framework for the regulation of electronic communi-
cations services, electronic communications networks
and associated facilities cannot be sufficiently achieved
by the Member States and can therefore by reason of the
scale or effects of the action be better achieved at
Community level, the Community may adopt measures
in accordance with the principles of subsidiarity as set
out in Article 5 of the Treaty. In accordance with the
principle of proportionality, as set out in that Article,
this Directive does not go beyond what is necessary in
order to achieve those objectives.

(50) The measures necessary for the implementation of this
Directive should be adopted in accordance with Council
Decision 1999/468/EC of 28 June 1999 laying down
the procedures for the exercise of implementing powers
conferred on the Commission (2),

HAVE ADOPTED THIS DIRECTIVE:

CHAPTER I

SCOPE, AIMS AND DEFINITIONS

Article 1

Scope and aims

1. Within the framework of Directive 2001/.../EC (Frame-
work Directive),
this Directive concerns the provision of
electronic communications networks and services to end-
users. The aim is to ensure the availability throughout the
Community of good quality publicly available services through
effective competition and choice and to deal with circum-
stances in which the needs of end-users are not satisfactorily
met by the market.

2.
This Directive establishes the rights of end-users and the
corresponding obligations on undertakings providing publicly
available electronic communications networks and services.
With regard to ensuring provision of universal service within
an environment of open and competitive markets, this Direc-
tive defines the minimum set of services of specified quality to
which all end-users have access, at an affordable price in
the light of specific national conditions, without distorting
competition. This Directive also sets out obligations with
regard to the provision of certain mandatory services such as
the retail provision of leased lines.

Article 2

Definitions

For the purposes of this Directive, the definitions set out in
Article 2 of Directive 2001/.../EC (Framework Directive) shall
apply.

The following definitions shall also apply:

(a)

‘public pay telephone’ means a telephone available to the
general public, for the use of which the means of payment
may include coins and/or credit/debit cards and/or pre-
payment cards,
including cards for use with dialling
codes;

(1) OJ L 115, 17.4.1998, p. 31.

(2) OJ L 184, 17.7.1999, p. 23.

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(b)

(c)

(d)

(e)

‘public telephone network’ means an electronic com-
munications network which is used to provide publicly
it supports the transfer
available telephone services;
between network termination points of speech communi-
cations, and also other forms of communication, such as
facsimile and data;

‘publicly available telephone service’ means a service
available to the public for originating and receiving
national and international calls and access to emergency
services through a number or numbers in a national or
international telephone numbering plan, and in addition
may, where relevant, include one or more of the following
services: the provision of operator assistance, directory
enquiry services, directories, provision of public pay
phones, provision of service under special terms, pro-
vision of special facilities for customers with disabilities
or with special social needs and/or the provision of non-
geographic services;

‘geographic number’ means a number from the national
numbering plan where part of its digit structure contains
geographic significance used for routing calls to the physi-
cal location of the network termination point (NTP);

‘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;

(f)

‘non-geographic numbers’ means a number from the
national numbering plan that is not a geographic number.
It includes, inter alia, mobile, freephone and premium rate
numbers.

CHAPTER II

2. Member States shall determine the most efficient and
appropriate approach for ensuring the implementation of
universal service, whilst respecting the principles of objectivity,
transparency, non-discrimination and proportionality. 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 safeguarding the public interest.

Article 4

Provision of access at a fixed location

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

2.
The connection provided shall be capable of allowing
end-users to make and receive local, national and international
telephone calls, facsimile communications and data communi-
cations, at data rates that are sufficient to permit functional
Internet access, taking into account prevailing technologies
used by the majority of subscribers and technological feasi-
bility.

Article 5

Directory enquiry services and directories

1. Member States shall ensure that:

(a)

at least one comprehensive directory is available to end-
users in a form approved by the relevant authority,
whether printed or electronic, or both, and is updated on
a regular basis, and at least once a year;

UNIVERSAL SERVICE OBLIGATIONS INCLUDING SOCIAL
OBLIGATIONS

(b)

at least one comprehensive telephone directory enquiry
service is available to all end-users, including users of
public pay telephones.

Article 3

Availability of universal service

2.
The directories in paragraph 1 shall comprise, subject to
the provisions of Article 12 of Directive 2001/.../EC (Data
Protection Directive), all subscribers of publicly available
telephone services.

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

3. Member States shall ensure that
the undertaking(s)
providing the services referred to in paragraph 1 apply the
principle of non-discrimination to the treatment of infor-
mation that has been provided to them by other undertakings.

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Article 6

Public pay telephones

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

2.
A Member State shall ensure that its national regulatory
authority can decide not to impose obligations under para-
graph 1 in all or part of its territory, if it is satisfied that these
facilities or comparable services are widely available, on the
basis of a consultation of interested parties as referred to in
Article 33.

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 any means of payment.

Article 7

Special measures for disabled users

1. Member States shall, where appropriate, take specific
measures for disabled end-users in order to ensure access to
and affordability of publicly available telephone services,
including access to emergency services, directory enquiry
services and directories, equivalent to that enjoyed by other
end-users.

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

Article 8

Designation of undertakings

2. When Member States designate undertakings in part
or all of the national territory as having universal service
obligations, they shall do so using an efficient, objective,
transparent and non-discriminatory designation mechanism,
whereby no undertaking is a priori excluded from being
designated. Such designation methods shall ensure that univer-
sal service is provided in a cost-effective manner and may be
used as a means of determining the net cost of the universal
service obligation in accordance with Article 12.

Article 9

Affordability of tariffs

National regulatory authorities shall monitor the evol-
1.
ution of retail tariffs of the services identified in Articles 4, 5,
6 and 7 as falling under the universal service obligations and
provided by designated undertakings, in particular in relation
to national consumer prices and income.

2. Member States may, in the light of national conditions,
require that designated undertakings 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 special social needs are not
prevented from accessing or using the publicly available
telephone service.

3. Member States may, besides any provision for designated
undertakings to provide special tariff options or to comply
with price caps or geographical averaging or other similar
is provided to consumers
schemes, ensure that support
identified as having low incomes or special social needs.

4. Member States may require undertakings with obli-
gations under Articles 4, 5, 6 and 7 to apply common tariffs,
including geographical averaging, throughout the territory, in
the light of national conditions or to comply with price caps.

1. Member States may designate one or more undertakings
to guarantee the provision of universal service as identified in
Articles 4, 5, 6 and 7 and, where applicable, Article 9(2) so
that the whole of the national territory can be covered.
Member States may designate different undertakings or sets of
undertakings to provide different elements of universal service
and/or to cover different parts of the national territory.

5.
National regulatory authorities shall ensure that, where a
designated undertaking has an obligation to provide special
tariff options, common tariffs, including geographical averag-
ing, or to comply with price caps, 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.

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Article 10

Control of expenditure

1. Member States shall ensure that designated undertakings,
in providing facilities and services additional to those referred
to in Articles 4, 5, 6, 7 and 9(2), establish terms and conditions
in such a way that the subscriber is not obliged to pay for
facilities or services which are not necessary or not required
for the service requested.

2. Member States shall ensure that designated undertakings
with obligations under Articles 4, 5, 6, 7 and 9(2) provide the
specific facilities and services set out in Annex I, Part A, in
order that subscribers can monitor and control expenditure
and avoid unwarranted disconnection of service.

3. Member States shall ensure that the relevant authority is
able to waive the requirements of paragraph 2 in all or part of
its national territory if it is satisfied that the facility is widely
available.

Article 11

Quality of service of designated undertakings

1.
National regulatory authorities shall ensure that all
designated undertakings with obligations under Articles 4, 5,
6, 7 and 9(2) publish adequate and up-to-date information
concerning their performance in the provision of universal
service, based on the quality of service parameters, definitions
and measurement methods set out in Annex III. The published
information shall also be supplied to the national regulatory
authority. National regulatory authorities may specify, inter
alia, the quality of service parameters to be measured, and the
content, form and manner of information to be published, in
order to ensure that end-users have access to comprehensive,
comparable and user-friendly information.

2.
National regulatory authorities shall be able to set
performance targets for those undertakings with universal
service obligations at least under Article 4.
In so doing,
national regulatory authorities shall take account of views of
interested parties, in particular as referred to in Article 33.

4.
Persistent failure by an undertaking to meet performance
targets may result in specific measures being taken in accord-
ance with Directive 2001/.../EC of the European Parliament
and of the Council of ... on the authorisation of electronic
communications networks and services (Authorisation Direc-
tive) (1). National regulatory authorities shall be able to order
independent audits or similar reviews 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.

Article 12

Costing of universal service obligations

1. Where national regulatory authorities consider that the
provision of universal service as set out in Articles 3 to 10
may represent an unfair burden on undertakings designated to
provide universal service, they shall calculate the net costs of
its provision.

For that purpose, national regulatory authorities shall:

(a)

calculate the net cost of the universal service obligation,
taking into account any market benefit which accrues to
an undertaking designated to provide universal service, in
accordance with Annex IV, Part A; or

(b) make use of the net costs of providing universal service
identified by a designation mechanism in accordance
with Article 8(2).

2.
The accounts and/or other information serving as the
basis for the calculation of the net cost of universal service
obligations under paragraph 1(a) shall be audited or verified
by the national regulatory authority or a body independent of
the relevant parties and approved by the national regulatory
authority. The results of the cost calculation and the con-
clusions of the audit shall be publicly available.

Article 13

Financing of universal service obligations

1. Where, on the basis of the net cost calculation referred
to in Article 12, national regulatory authorities find that an
undertaking is subject to an unfair burden, Member States
shall, upon request from a designated undertaking, decide:

3. Member States shall ensure that national regulatory
authorities are able to monitor compliance with these perform-
ance targets by designated undertakings.

(1) See page 18 of this Official Journal.

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to introduce a mechanism to compensate that undertak-
ing for the determined net costs under transparent
conditions from public funds; and/or

Article 15

Review of the scope of universal service

(a)

(b)

to share the net cost of universal service obligations
between providers of electronic communications net-
works and services.

2. Where the net cost is shared under paragraph 1(b),
Member States shall establish a sharing mechanism adminis-
tered by the national regulatory authority or a body indepen-
dent from the beneficiaries under the supervision of the
national regulatory authority. Only the net cost, as determined
in accordance with Article 12, of the obligations laid down
under Articles 3 to 10, may be financed.

3.
A sharing mechanism shall respect the principles of
transparency, least market distortion, non-discrimination and
proportionality, in accordance with the principles of Annex IV,
Part B. Member States may choose not to require contributions
from undertakings whose national turnover is less than a set
limit.

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

Article 14

Transparency

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.

2.
Subject to Community and national rules on business
confidentiality, national regulatory authorities shall ensure that
an annual report is published giving the calculated cost of
universal service obligations,
identifying the contributions
made by all the undertakings involved, and identifying any
market benefits, that may have accrued to the undertaking(s)
designated to provide universal service, where a fund is actually
in place and working.

1.
The Commission shall periodically review the scope of
universal service, in particular with a view to proposing to the
the scope be
European Parliament and the Council
changed or redefined. A review shall be carried out, on the
first occasion within two years after the date of application
referred to in Article 38(1), second subparagraph, and sub-
sequently every three years.

that

This review shall be undertaken in the light of social,
2.
economic and technological developments,
taking into
account, inter alia, mobility and data rates in the light of the
prevailing technologies used by the majority of subscribers.
The review process shall be undertaken in accordance with
Annex V. The Commission shall submit a report to the
European Parliament and the Council regarding the outcome
of the review.

CHAPTER III

REGULATORY CONTROLS ON UNDERTAKINGS WITH SIG-
NIFICANT MARKET POWER IN SPECIFIC MARKETS

Article 16

Review of obligations

1. Member States shall maintain all obligations relating to:

(a)

(b)

retail tariffs for the provision of access to and use of the
public telephone network, imposed under Article 17 of
Directive 98/10/EC of the European Parliament and of
the Council of 26 February 1998 on the application of
open network provision (ONP) to voice telephony and a
universal service for telecommunications in a competitive
environment (1);

carrier selection or preselection, imposed under Directive
97/33/EC of the European Parliament and of the Council
of 30 June 1997 on interconnection in telecommuni-
cations with regard to ensuring universal service and
interoperability through application of the principles of
open network provision (ONP) (2);

(c)

leased lines, imposed 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 the procedure in paragraph 3 of this
Article.

(1) OJ L 101, 1.4.1998, p. 24.
(2) OJ L 199, 26.7.1997, p. 32. Directive as amended by Directive

98/61/EC (OJ L 268, 3.10.1998, p. 37).

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2.
The Commission shall indicate relevant markets for the
obligations relating to retail markets in the initial recommen-
dation on relevant product and service markets and the
decision identifying pan-European markets to be adopted in
accordance with Article 14 of Directive 2001/.../EC (Frame-
work Directive).

3.
National regulatory authorities shall on request, submit
information to the Commission concerning the retail controls
applied and, where appropriate, the cost accounting systems
used by the undertakings concerned.

3. Member States shall ensure that, as soon as possible after
the entry into force of this Directive, and periodically thereafter,
national regulatory authorities undertake a market analysis, in
in Article 15 of
accordance with the procedure set out
Directive 2001/.../EC (Framework Directive)
to determine
whether to maintain, amend or withdraw the obligations
relating to retail markets. Measures taken shall be subject to
the procedure set out in Article 6(2) to (5) of Directive
2001/.../EC (Framework Directive).

tariff regulation,

National regulatory authorities shall ensure that, where
4.
an undertaking is subject
the
to retail
necessary and appropriate cost accounting systems are
implemented. National regulatory authorities may specify the
format and accounting methodology to be used. Compliance
with the cost accounting system shall be verified by a qualified
independent body. National regulatory authorities shall ensure
that a statement concerning compliance is published annually.

Article 17

Regulatory controls on retail services

5. Without prejudice to Article 9(2) and Article 10, national
regulatory authorities shall not apply retail control mechan-
isms under paragraph 1 of this Article to geographical or
user markets where they are satisfied that there is effective
competition.

1. Member States shall ensure that, where:

(a)

(b)

as a result of a market analysis carried out in accordance
with Article 16(3) a national regulatory authority deter-
mines that a given retail market identified in accordance
with Article 14 of Directive 2001/.../EC (Framework
Directive) is not effectively competitive; and

the national regulatory authority considers that obli-
gations imposed under Directive 2001/.../EC (Access
Directive), or Article 19 of this Directive would not result
in the achievement of the objectives set out in Article 7
of Directive 2001/.../EC (Framework Directive),

national regulatory authorities shall impose appropriate regu-
latory obligations on undertakings identified as having signifi-
cant market power on a given retail market in accordance with
Article 13 of Directive 2001/.../EC (Framework Directive).

2.
Obligations imposed under paragraph 1 shall be based
on the nature of the problem identified and be proportionate
and justified in the light of the objectives laid down in Article 7
of Directive 2001/.../EC (Framework Directive). The obligations
imposed may include requirements that the identified under-
takings do not charge excessive prices, inhibit market entry or
restrict competition by setting predatory prices, show undue
preference to specific end-users or unreasonably bundle ser-
vices. National regulatory authorities may apply to such
undertakings appropriate retail price cap measures, measures
to control
individual tariffs, or measures to orient tariffs
towards costs or prices on comparable markets, in order to
protect end-user interests whilst promoting effective compe-
tition.

Article 18

Regulatory controls on minimum set of leased lines

1. Where, as a result of the market analysis carried out in
accordance with Article 16(3), a national regulatory authority
determines that the market for the provision of part or all of
the minimum set of leased lines, is not effectively competitive,
it shall identify undertakings with significant market power in
the provision of those specific elements of the minimum set
of leased lines services in all or part of its territory in accordance
with Article 13 of Directive 2001/.../EC (Framework Directive).
The national regulatory authority shall
impose obligations
regarding the provision of the minimum set of leased lines, as
identified in the list of standards published in the Official Journal
of the European Communities in accordance with Article 16 of
Directive 2001/.../EC (Framework Directive), and the con-
ditions for such provision set out in Annex VII to this Directive,
on such undertakings in relation to those specific leased line
markets.

2. Where as a result of the market analysis carried out in
accordance with Article 16(3), a national regulatory authority
determines that a relevant market for the provision of leased
lines in the minimum set is effectively competitive, it shall
withdraw the obligations referred to in paragraph 1 in relation
to this specific leased line market.

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The minimum set of

3.
leased lines with harmonised
characteristics, and associated standards, shall be published in
the Official Journal of the European Communities as part of the list
of standards referred to in Article 16 of Directive 2001/.../EC
(Framework Directive). The Commission may adopt amend-
ments necessary to adapt the minimum set of leased lines to
new technical developments and to changes in market demand,
including the possible deletion of certain types of leased line
from the minimum set, acting in accordance with the pro-
cedure referred to in Article 37(2) of this Directive.

Article 19

Carrier selection and carrier preselection

1.
National regulatory authorities shall require undertakings
notified as having significant market power for the provision
of connection to and use of the public telephone network at a
fixed location in accordance with Article 16(3) 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 carrier selection code;
and

(b) by means of preselection, with a facility to override any
preselected choice on a call-by-call basis by dialling a
carrier selection code.

2. Member States shall ensure that at least consumers where
subscribing to services providing connection and/or access to
the public telephone network, shall have a right to a contract
with an undertaking or undertakings providing such services.
The contract shall specify at least:

(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)

(e)

(f)

the means by which up-to-date information on all
applicable tariffs and maintenance charges may be
obtained;

the duration of the contract, the conditions for renewal
and termination of services and of the contract;

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

(g)

the method of initiating procedures for settlement of
disputes in accordance with Article 34.

2.
User requirements for these facilities to be implemented
on other networks or in other ways shall be assessed in
accordance with the market analysis procedure laid down in
Article 15 of Directive 2001/.../EC (Framework Directive) and
implemented in accordance with Article 12 of Directive
2001/.../EC (Access Directive).

3. Where contracts are concluded between at least con-
sumers and electronic communications services providers
other than those providing connection and/or access to the
public telephone network, the information in paragraph 2
shall also be included in such contracts.

3.
National regulatory authorities shall ensure that pricing
for access and interconnection related to the provision of the
facilities in paragraph 1 is cost-oriented and that direct charges
to subscribers, if any, do not act as a disincentive for the use
of these facilities.

4.
Subscribers shall have a right to withdraw from their
contracts without penalty upon notice of proposed modifi-
cations in the contractual conditions. Subscribers shall be
given adequate notice, not shorter than one month ahead, of
any such modifications and shall be informed at the same time
of
from such
contracts, if they do not accept the new conditions.

to withdraw, without penalty,

their right

CHAPTER IV

END-USER INTERESTS AND RIGHTS

Article 21

Article 20

Contracts

1.
Paragraphs 2, 3 and 4 apply without prejudice to
Community rules on consumer protection, in particular Direc-
tives 97/7/EC and 93/13/EC, and national rules in conformity
with Community law.

Transparency and publication of information

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

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Article 22

Quality of service

1. Member States shall ensure that national regulatory
authorities are, after taking account of the views of interested
parties, able to require undertakings that provide publicly
available electronic communications services to publish com-
parable, adequate and up-to-date information for end-users on
the quality of their services. The information shall, on request,
also be supplied to the national regulatory authority in advance
of its publication.

2.
National regulatory authorities may specify, inter alia, the
quality of service parameters to be measured, and the content,
form and manner of information to be published, in order
to ensure that end-users have access to comprehensive,
comparable and user-friendly information. Where appropriate,
the parameters, definitions and measurement methods given
in Annex III could be used.

Article 23

Integrity of the network

Member States shall take all necessary steps to ensure the
integrity of the public telephone network at fixed locations
and, in the event of catastrophic network breakdown or in
cases of force majeure, the availability of the public telephone
network and publicly available telephone services at fixed
locations. Member States shall ensure that undertakings pro-
viding publicly available telephone services at fixed locations
take all reasonable steps to ensure uninterrupted access to
emergency services.

Article 24

Interoperability of consumer digital television equipment

In accordance with the provisions of Annex VI, Member States
shall ensure the interoperability of
the consumer digital
television equipment referred to therein.

2. Member States shall ensure that all undertakings which
assign telephone numbers to subscribers meet all reasonable
requests to make available, for the purposes of the provision
of publicly available directory enquiry services and directories,
the relevant information in an agreed format on terms which
are fair, objective, cost-oriented and non-discriminatory.

3. Member States shall ensure that all end-users provided
with a connection to the public telephone network can access
operator assistance services and directory enquiry services in
accordance with Article 5(1)(b).

4. Member States shall not maintain any regulatory restric-
tions which prevent end-users in one Member State from
accessing directly the directory enquiry service in another
Member State.

5.
Paragraphs 1, 2, 3 and 4 apply subject to the require-
ments of Community legislation on the protection of personal
data and privacy and, in particular, Article 12 of Directive
2001/.../EC (Data Protection Directive).

Article 26

Single European emergency call number

1. Member States shall ensure that, in addition to any other
national emergency call numbers specified by the national
regulatory authorities, all end-users of publicly available tele-
phone 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’.

2. Member States shall ensure that calls to the single
European emergency call number ‘112’ are appropriately
answered and handled in a manner best suited to the national
organisation of emergency systems and within the technologi-
cal possibilities of the networks.

Article 25

Operator assistance and directory enquiry services

3. Member States shall ensure that undertakings which
operate public telephone networks make caller location infor-
mation available to authorities handling emergencies, to the
extent technically feasible, for all calls to the single European
emergency call number ‘112’.

1. Member States shall ensure that subscribers to publicly
available telephone services have the right to have an entry in
the publicly available directory referred to in Article 5(1)(a).

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

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Article 27

European telephone access codes

Article 30

Number portability

1. Member States shall ensure that the ‘00’ code is the
standard international access code. Special arrangements for
making calls between adjacent
locations across borders
between Member States may be established or continued. The
end-users of publicly available telephone services in the
locations concerned shall be fully informed of such arrange-
ments.

2. Member States shall ensure that all undertakings that
operate public telephone networks handle all calls to the
European telephony numbering space, without prejudice to
the need for an undertaking that operates a public telephone
network to recover the cost of the conveyance of calls on its
network.

Article 28

Non-geographic numbers

Member States shall ensure that end-users from other Member
States are able to access non-geographic numbers within their
territory where technically and economically feasible, except
where a called subscriber has chosen for commercial reasons
to limit access by calling parties located in specific geographical
areas.

Article 29

Provision of additional facilities

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

2.
A Member State may decide to waive paragraph 1 in all
or part of its territory if it considers, after taking into account
the views of interested parties, that there is sufficient access to
these facilities.

3. Without prejudice to Article 10(2), Member States may
impose the obligations in Annex I, Part A, point (e), concerning
disconnection as a general requirement on all undertakings.

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

independently of

(a)

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

(b)

in the case of non-geographic numbers, at any location.

This paragraph does not apply to the porting of numbers
between networks providing services at a fixed location and
mobile networks.

2.
National regulatory authorities shall ensure that pricing
for interconnection related to the provision of number port-
ability is cost-oriented and that direct charges to subscribers, if
any, do not act as a disincentive for the use of these facilities.

3.
National regulatory authorities shall not impose retail
tariffs for the porting of numbers in a manner that would
distort competition, such as by setting specific or common
retail tariffs.

Article 31

‘Must carry’ obligations

1. Member States may impose reasonable ‘must carry’
obligations, for the transmission of specified radio and tele-
vision broadcast channels and services, on undertakings under
their jurisdiction providing electronic communications net-
works used for the distribution of radio or television broadcasts
to the public where a significant number of end-users of such
networks use them as their principal means to receive radio
and television broadcasts. Such obligations shall only be
imposed where they are necessary to meet clearly defined
general
interest objectives and shall be proportionate and
transparent. The obligations shall be subject to periodical
review.

2.
Neither paragraph 1 of this Article nor Article 3(2) of
Directive 2001/.../EC (Access Directive) shall prejudice the
ability of Member States to determine appropriate remuner-
ation, if any, in respect of measures taken in accordance with
this Article while ensuring that, in similar circumstances, there
is no discrimination in the treatment of undertakings providing
electronic communications networks. Where remuneration is
provided for, Member States shall ensure that it is applied in a
proportionate and transparent manner.

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CHAPTER V

Article 36

GENERAL AND FINAL PROVISIONS

Notification, monitoring and review procedures

Article 32

Additional mandatory services

Member States may decide to make additional services, apart
from services within the universal service obligations as
defined in Chapter II, publicly available in its own territory
but,
in such circumstances, no compensation mechanism
involving specific undertakings, may be imposed.

Article 33

Consultation with interested parties

Member States shall ensure as far as appropriate that national
regulatory authorities take account of
the views of end-
users, manufacturers, undertakings that provide electronic
communications networks and/or services on issues which
have a significant impact on the market related to all end-user
rights concerning publicly available electronic communi-
cations services.

Article 34

Out-of-court dispute resolution

1. Member States shall ensure that transparent, simple and
inexpensive out-of-court procedures are available for dealing
with unresolved disputes, involving at least consumers, relating
to issues covered by this Directive. Member States shall adopt
measures to ensure that such procedures enable disputes to be
settled fairly and promptly and may, where warranted, adopt
a system of reimbursement and/or compensation.

2. Where such disputes involve parties in different Member
States, Member States shall coordinate their efforts with a view
to bringing about a resolution of the dispute.

This Article is without prejudice to national court

3.
procedures.

Article 35

Technical adjustment

Amendments necessary to adapt Annexes I, II, III, VI and VII
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 37(2).

1.
National regulatory authorities shall notify to the Com-
mission by, at the latest, the date of application referred to in
Article 38(1), second subparagraph, and immediately in the
event of any change thereafter in the names of undertakings
designated as having universal service obligations under
Article 8(1).

The Commission shall make the information available in
a readily accessible form, and shall distribute it
to the
Communications Committee referred to in Article 37.

National regulatory authorities shall notify to the Com-
2.
mission the names of operators deemed to have significant
market power for the purposes of this Directive, and the
obligations imposed upon them under this Directive. Any
changes affecting the obligations imposed upon undertakings
or of the undertakings affected under the provisions of this
Directive shall be notified to the Commission without delay.

3.
The Commission shall periodically review the func-
tioning of this Directive and report to the European Parliament
and to the Council, on the first occasion not later than three
years after the date of application referred to in Article 38(1),
second subparagraph. The Member States and national regulat-
ory authorities shall supply the necessary information to the
Commission for this purpose.

Article 37

Committee

The Commission shall be assisted by the Communi-
set up by Article 20 of Directive

1.
cations Committee,
2001/.../EC (Framework Directive).

2. Where reference is made to this paragraph, Articles 5
and 7 of Decision 1999/468/EC shall apply, having regard to
the provisions of Article 8 thereof.

The period laid down in Article 5(6) of Decision 1999/468/EC
shall be three months.

3.

The Committee shall adopt its Rules of Procedure.

Article 38

Transposition

1. Member States shall adopt and publish the laws, regu-
lations and administrative provisions necessary to comply with
this Directive by ... (*) at the latest. They shall forthwith inform
the Commission thereof.

(*) Fifteen months after the date of the entry into force of this

Directive.

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They shall apply those measures from ... (*).

2. When Member States adopt these measures, they shall
contain a reference to this Directive or be accompanied by
such a reference on the occasion of their official publication.
The methods of making such a reference shall be laid down by
the Member States.

Article 40

Addressees

This Directive is addressed to the Member States.

3. 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
modifications to those provisions.

Done at ...

Article 39

Entry into force

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

For the European Parliament

The President

For the Council

The President

(*) The first day after the expiry of this 15 month period.

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ANNEX I

Description of facilities and services referred to in Article 10 (Control of expenditure) and Article 29
(Additional facilities)

PART A

Facilities and services referred to in Article 10 are as follows.

(a)

Itemised billing

Member States are to ensure that 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
are to be provided by designated undertakings (as established in Article 8) to consumers free of charge in order
that they can:

(i)

(ii)

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

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.

Calls which are free of charge to the calling subscriber, including calls to helplines, are not to be identified in
the calling subscriber’s itemised bill.

(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)

Prepayment systems

Member States are to ensure that national regulatory authorities may require designated undertakings to
provide means for consumers to pay for access to the public telephone network and use of publicly available
telephone services on prepaid terms.

(d)

Phased payment of connection fees

Member States are to ensure that 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 are to authorise specified measures, which are to 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 are to 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
are to 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.

PART B

List of facilities referred to in Article 29:

(a)

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

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.

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(b)

Calling-line identification

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

This facility should be provided in accordance with relevant legislation on protection of personal data and
privacy, in particular Directive 2001/.../EC (Data Protection Directive).

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ANNEX II

Information to be published in accordance with Article 21 (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 21. 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 enquiry 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

Supply-time and quality-of-service parameters, definitions and measurement methods referred to in
Articles 11 and 22

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

Fault repair time

ETSI EG 201 769-1

ETSI EG 201 769-1

ETSI EG 201 769-1

ETSI EG 201 769-1

Unsuccessful call ratio (Note 2)

ETSI EG 201 769-1

ETSI EG 201 769-1

Call set up time (Note 2)

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 times for directory enquiry services

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
nomenclature of territorial units for statistics (NUTS) established by Eurostat).

level (i.e. no less than level 2 in the

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.

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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 special social needs.

National regulatory authorities are to consider all means to ensure appropriate incentives for undertakings (designated
or not) to provide universal service obligations cost-efficiently. In undertaking a calculation exercise, the net cost of
universal service obligations is to be calculated as the difference between the net cost for a designated undertaking 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 is to be given to correctly assessing the costs that any designated undertaking would have
chosen to avoid had there been no universal service obligation. The net cost calculation should assess the benefits,
including intangible benefits, to the universal service operator.

The calculation is to 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 cost of specific aspects of universal service obligations is to 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 is to be calculated as the sum of the net costs arising from the specific components
of universal service obligations, taking account of any intangible 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 designated undertakings with
universal service obligations to be compensated for the services they provide under non-commercial conditions.
Because such a compensation involves financial transfers, Member States are to ensure that these are undertaken in
an objective, transparent, non-discriminatory and proportionate manner. This means that the transfers result in the
least distortion to competition and to user demand.

In accordance with Article 13(3), a sharing mechanism based on a fund should use a transparent and neutral means
for collecting contributions, that avoids the danger of a double imposition of contributions falling on both outputs
and inputs of undertakings.

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

ANNEX V

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

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

— social and market developments in terms of the services used by consumers,

— social and market developments in terms of the availability and choice of services to consumers,

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

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

— 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

— 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?

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ANNEX VI

Interoperability of digital consumer equipment referred to in Article 24

1.

The common scrambling algorithm and free-to-air reception

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

— to allow the de-scrambling of such signals according to the common European scrambling algorithm as

administered by a recognised European standards organisation, currently ETSI,

— 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 is to be fitted with at least one open interface socket, as standardised
by a recognised European standards organisation, e.g. as given in the Cenelec EN 50 049-1:1997 standard,
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 is to be fitted with at least one open interface socket (either
standardised by, or conforming to standard adopted by, a recognised European standards organisation, or
conforming to an industry-wide specification) e.g. the DVB common interface connector, permitting simple
connection of peripherals, and able to pass all the elements of a digital television signal, including information
relating to interactive and conditionally accessed services.

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ANNEX VII

Conditions for the minimum set of leased lines referred to in Article 18

Note: In accordance with the procedure in Article 18, provision of the minimum set of leased lines under the
conditions established by Directive 92/44/EEC should continue until such time as the national regulatory
authority determines that there is effective competition in the relevant leased lines market.

National regulatory authorities are to ensure that provision of the minimum set of leased lines referred to in Article
18 follows the basic principles of non-discrimination, cost orientation and transparency.

1.

Non-discrimination

National regulatory authorities are to ensure that the organisations identified as having significant market
power pursuant to Article 18(1) adhere to the principle of non-discrimination when providing leased lines
referred to in Article 18. Those organisations are to apply similar conditions in similar circumstances to
organisations providing similar services, and are to provide leased lines to others under the same conditions
and of the same quality as they provide for their own services, or those of their subsidiaries or partners, where
applicable.

2.

Cost orientation

National regulatory authorities are to, where appropriate, ensure that tariffs for leased lines referred to in
Article 18 follow the basic principles of cost orientation.

To this end, national regulatory authorities are to ensure that undertakings identified as having significant
market power pursuant to Article 18(1) formulate and put in practice a suitable cost accounting system.

National regulatory authorities are to keep available, with an adequate level of detail, information on the cost
accounting systems applied by such undertakings. They are to submit this information to the Commission on
request.

3.

Transparency

3.1.

3.2.

National regulatory authorities are to ensure that the following information in respect of the minimum set of
leased lines referred to in Article 18 is published in an easily accessible form.

Technical characteristics, including the physical and electrical characteristics as well as the detailed technical
and performance specifications which apply at the network termination point.

Tariffs, including the initial connection charges, the periodic rental charges and other charges. Where tariffs
are differentiated, this must be indicated.

Where, in response to a particular request, an organisation identified as having significant market power
pursuant to Article 18(1) considers it unreasonable to provide a leased line in the minimum set under its
published tariffs and supply conditions, it must seek the agreement of the national regulatory authority to
vary those conditions in that case.

3.3.

Supply conditions, including at least the following elements:

— information concerning the ordering procedure,

— the typical delivery period, which is the period, counted from the date when the user has made a firm
request for a leased line, in which 95 % of all leased lines of the same type have been put through to the
customers.

This period will be established on the basis of the actual delivery periods of leased lines during a recent
time interval of reasonable duration. The calculation must not include cases where late delivery periods
were requested by users,

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— the contractual period, which includes the period which is in general laid down in the contract and the

minimum contractual period which the user is obliged to accept,

— the typical repair time, which is the period, counted from the time when a failure message has been
given to the responsible unit within the undertaking identified as having significant market power
pursuant to Article 18(1) up to the moment in which 80 % of all leased lines of the same type have been
re-established and in appropriate cases notified back in operation to the users. Where different classes of
quality of repair are offered for the same type of leased lines, the different typical repair times shall be
published,

— any refund procedure.

In addition where a Member State considers that the achieved performance for the provision of the
minimum set of leased lines does not meet users’ needs, it may define appropriate targets for the supply
conditions listed above.

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STATEMENT OF THE COUNCIL’S REASONS

I.

INTRODUCTION

1. On 29 to 31 August 2000 the Commission submitted a package of proposals for a regulatory
framework applicable to electronic communications infrastructure and associated services. This
document refers to an important element of this package which is a 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, known as the ‘Universal Service Directive’.

2.

The European Parliament delivered its opinion at first reading on 13 June 2001. The opinions
of the Committee of the Regions and the Economic and Social Committee were given on
14 December 2000 and 1 March 2001 respectively.

3. On 17 September 2001 the Council adopted its Common Position in accordance with

Article 251 of the Treaty.

II. OBJECTIVE

1.

The purpose of the regulatory package proposed is to bring current Community legislation on
telecommunications into line with the far-reaching changes which have taken place in the
telecommunications, media and information technologies sectors. The convergence of these
sectors underlies the approach in the Commission’s proposals which seek to bring all
transmission networks and associated services together under a single regulatory framework.
The proposed new regulatory framework has been designed as an intermediate phase between
the current framework and an anticipated future situation where the telecommunications
market will be sufficiently mature to allow it to be governed solely by general competition law.

2.

The proposal for a Directive on universal service and users’ rights, which is the subject of this
report, seeks to:

— adapt and modernise existing measures on universal service so as to define the scope of
this service, the rights of users and the measures for compensating providers of the service
without distorting competition,

— create a process for reviewing the scope of universal service obligations,

— lay down specific users’ and consumers’ rights where necessary,

— carry forward current measures on and ensure the availability of leased lines in the EU

until competition in these services develops,

— allow national regulatory authorities (NRAs) to take measures on behalf of users and

consumers,

— underpin industry’s efforts to ensure interoperability of consumer digital television

equipment.

III. ANALYSIS OF THE COMMON POSITION

A. GENERAL COMMENTS

Although the Council has substantially restructured the Commission proposal and made a number
of changes to render the wording of the Directive more precise and thus improve the legal clarity of
the text, the text of the Common Position essentially endorses the core elements proposed by the
Commission relating, in particular, to the scope and financing of universal service and the level of
protection of end-users.

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B.

SPECIFIC COMMENTS

1.

Principal changes made to the Commission proposal

(a) Restructuring of the text

The Council has significantly restructured the text as proposed by the Commission,
principally to improve the coherence and readability of the draft directive, but and
also with a view to bringing it into line with the structure and approach of the
Framework and Access Directives. For example, provisions concerning regulatory
controls on undertakings with significant market power from how been grouped
together in Chapter III, and some elements of Article 7 have been moved to Article 9.

(b) The scope of universal service and its review (Articles 4 and 15)

The Council has endorsed the basic approach proposed by the Commission, i.e. to
refrain from a radical extension to the scope of universal service at this stage, whilst
setting up a process of periodic review. However, the Council shares the view of the
European Parliament that Article 4(2) required greater clarity regarding the question
of Internet access, and it has therefore incorporated the requirement for such access
to be ‘functional’, as well as adding certain criteria to evaluate the level of access
similar to those suggested by Parliament.

(c) Regulatory controls on retail services (Articles 16 and 17)

Taking into account the opinion of the European Parliament (in particular the
intention behind amendments 25 and 26), the Council has adopted a more measured
approach to the imposition of regulatory controls on retail services, compared to
that proposed by the Commission. Whilst maintaining an obligation for national
regulatory authorities to react where markets are not effectively competitive, the
Common Position nevertheless adds a number of elements intended to guard against
over-regulation. These are notably a requirement to first consider whether a remedy
under the Access Directive might not be more effective and a further requirement
that any obligations imposed should be proportionate and justified in the light of the
objectives set down in Article 7 of the Framework Directive.

(d)

‘Must carry’ obligations (Article 31, ex-Article 26)

The Common Position text introduces several amendments to these provisions, the
most significant of which are:

— a requirement for such obligations to be ‘reasonable’,

— the possibility of imposing obligations in respect of networks ’used’ (rather than
‘established’) for the public distribution of radio and television broadcasts where
these networks are the primary means of receiving broadcasts,

— the deletion of paragraph 2 in the Commission proposal regarding compen-

sation.

(e)

Interoperability of consumer digital equipment — comitology provisions (Article 24, ex-
Article 20)

Following the opinion of the European Parliament (amendment 38), the Council
preferred to delete the possibility of the Commission amending the provisions on
standards in this area via a comitology procedure.

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2.

The Council’s position on the European Parliament amendments

(a) Amendments incorporated fully or in part into the Common Position

The Council accepted in full, in part or in principle amendments 2, 3, 4, 6, 7, 9, 10,
12, 13, 14, 15, 16, 17, 21, 22, 23, 25, 26, 27, 29, 30, 32, 33, 34, 35, 37, 38, 42,
45, 47 to 49, 59, 60, 70 and 74. For certain of these amendments the complete, or
near-complete wording has been taken on board, whilst others have been incorpor-
ated in a different form which nevertheless maintains the aim underlying the
amendment or parts of the amendment.

(b) Amendments not incorporated into the Common Position

In not incorporating amendments 1, 40, 43, 51, 55, 56, 61, 72 and 73, the Council
followed the Commission’s opinion.

In not incorporating amendments 5, 8, 11, 18, 19, 20, 24, 28, 31, 36, 39, 41, 44,
46, 52, 53, 54, 57, 58 and 66, the Council based its decisions, inter alia, on the
following broad considerations:

— the importance of ensuring coherence between the text of this Directive and the

other texts that make up the regulatory package,

— the need to maintain a comprehensive minimum level of universal service and
rights for all users (including the disabled), whilst nevertheless avoiding incurring
unnecessary costs for operators in the sector or for public funds,

— the need to take account, where appropriate, of the diversity of national
approaches in this area, whilst still ensuring a level playing field for operators
in the internal market.