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### `COMMISSION OF THE EUROPEAN COMMUNITIES`

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                            COM(94) 492 final

                            Brussels, 23.11.1994

#### C O M M U N I C A T I O N T O T H E E U R O P E A N P A R L I A M E N T AND T H E C O U N C I L ON T H E C O N S U L T A T I O N ON T H E G R E E N P A P E R ON M O B I L E A N D P E R S O N A L C O M M U N I C A T I O N S

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P r o p o s a l
for a Council R e s o l u t i o n

on the f u r t h e r d e v e l o p m e n t
mobile and p e r s o n a l c o m m u n i c a t i o n s
in the E u r o p e a n Union

**(presented** by the Commission)

##### **EXECUTIVE SUMMARY**

THE INFORMATION SOCIETY: A POLITICAL CONTEXT FOR MOBILE POLICY

The mobile and personal communications sector has been brought to the forefront of the debate on
the Information Society. The report on "Europe and the global information society"' identified
mobile communications as a necessary building block of the Information Society and advised on
the strengthening of its potential.

That report has helped to catch the popular imagination, defining the debate on the changes which
will revolutionise Europe's economy, business, industry and the lives of every citizen. This
revolution is not limited to one continent, but is global in scope and presents common challenges
which have attracted political attention at the highest level throughout the World. Access to
information, markets and customers anywhere in the World as well as the ability to stay in touch,
will be central to commercial success and will also offer many benefits to Europe's citizen's in their
every dav lives.

The Bangemann Group Report builds on the direction given by the Commission's White Paper on
Growth. Competitiveness and Employment (COM(9-2>) 700 final). The White Paper highlighted
the importance of moving forward towards the Information Society as one the essential elements to
help Europe to enjoy continued growth, whilst remaining competitive on global markets and
continue to expand employment.

At the same time, progress in this area cannot be at the expense of the more vulnerable in society.
The emerging policies must strengthen cohesion in the Union and take full account of the impact
on society as a whole and, in particular, the impact on employment, training, education and health
care. They must exploit the possibilities which mobile technologies now offer to develop universal
and affordable access to new services throughout the Union.

MOBILE AND PERSONAL COMMUNICATIONS IN THE INFORMATION SOCIETY

Mobile communications is currently the fastest growing area within the telecommunications sector.
Over the last few years it has experienced unprecedented growth in subscriber numbers, especially
in cellular mobile telephony. Europe has now more than 11 million cellular mobile telephony
users, 3 million more than at the time of compilation of the Mobile Green Paper. There are also
more than 8 million users of other mobile communications services, in particular, paging and socalled priyate mobile radio systems. It is forecast that by the year 2000, there could be nearly 40
million users in the European Union, and with the growing expansion into personal
communications services (PCS), up to 80 million users by the year 2010.

The market is being driven by rapid advances in technology, by commercial opportunities and by
falling prices. Subscriber growth rates during the last few years in Member States with high
growth cellular telephony markets (car telephones and hand-held portables) have varied from 30 to
40%. Recent analysis shows that this trend is withstanding the current economic recession.

Hurope and the global inf.rnu: ioi: society, Rccommcnu-Johr U -.he European Council, 26 May 1994

The mobility offered by these new technologies and new services will be central to the development
of Information Society. It will make the benefits of that society more easily accessible to every
citizen and every business throughout the Union.

The need for communications 'on the move' is becoming a normal part of business life with users
ranging from the multinational executive to the local plumber or builder. Over the next few years,
as prices continue to fall, and as the latest technologies become well established, mobile
communications are expected to make significant inroads into the mass consumer market.

As recognised in the Mobile Green Paper, mobility has a particular significance in the broader
context of the European Union. On the one hand, mobility is at the very heart of the objective of
the Union for the free movement of goods, people, services, and capital. On the other hand, the
prospect of European-wide advanced mobile communications networks and services will help to
turn the Information Society from vision to reality. In parallel with the integration of voice, data»
and pictures within new multi-media and on-line services, a personal communications environment
is emerging in which traditional distinctions between fixed and mobile networks and services will
disappear. Mobile technologies will help traditional operators to deliver communications services
more cheaply into every home, whilst today's mobile operators will evolve alongside the traditional
télécoms companies to provide nation-wide and Europe-wide networks and services.

THE ECONOMIC POTENTIAL OF THE MOBILE AND PERSONAL COMMUNICATIONS SECTOR

The creation now of the right framework for mobile communications will strengthen the
contribution to growth and employment which mobile communications is already making in the
Union. The Bangemann Group cited, for example, the case of Germany where 30,000 new jobs
have been created in the mobile sector, and forecast the creation of 100,000 jobs within the Union
if similar approaches are followed.

The growth of mobile communications will have a significant impact on the whole of the
telecommunications industry. Mobile services themselves will continue to experience rapid
growth, both in terms of subscriber numbers and corresponding traffic. This growth will in turn
stimulate traffic over the fixed networks, with mobile networks continuing to deliver much of their
traffic volumes to the fixed network, thereby increasing the overall use of telecommunications.

With the pan-European digital mobile system, GSM, the European Union has established a worldleading technology in this key area of the future global communications market. The Union must
now build on this success.

Additionally, the market potential for personal communications services is huge. While the
maximum density for fixed wireline telephones is not expected to exceed substantially an average
penetration of some 50% of the population, (i.e. approximately one connection per household, plus
business use), personal communications penetration has the ultimate potential to reach near 80%
of the population (i.e. up to one connection per adult).

Mobile communications also has an important role to play in stimulating massive private and
public investment into telecommunications networks and. services, and in contributing to
maintaining and developing service in the less developed or peripheral regions of the Union.

THE GLOBAL AIMS OF THE GREEN PAPER

The global aims the Green Paper were :

-* to permit the development of a Union-wide market for mobile services, equipment, and
terminals,

-> to identify common principles where required, for achieving this objective, in relation to
the provision of mobile infrastructure, the development of mobile networks and services,
and the supply and operation of mobile terminals ;

-* to promote the evolution of the mobile communications market into mass personal
communications services, with particular emphasis on pan-European services ;

-* to facilitate and promote the emergence of trans-European networks and services in the
sector, and to ensure that the sector's development is achieved in a manner consistent with
the public interest.

The Green Paper represented a major step within the global phased approach to the
telecommunications sector set by the Council Resolution of 22nd July 1993 for the future balanced
relationship of fixed and mobile networks and services in the Union and for the maintenance and
furthering of universal service in the sector for the European citizen.

In relation to universal service* the Green Paper recognised that regulatory and market conditions
currently mean that mobile communications services are today aimed a niche, premium-priced
market and so do not yet play a significant role in the provision of universal service or act as a
substitute for the fixed phone in every home. At the same time, the Green Paper recognised that
"mobile communications also has an important role in stimulating massive private and public
investment into telecommunications networks and services, and in contributing to maintaining and
developing service in less developed or peripheral regions of the Union".

THE MAIN ISSUES ADDRESSED IN THE GREEN PAPER

The Green Paper raised questions fundamental to the future development of the sector concerning:

 - How competitive should mobile markets be and how should mobile networks and services be
licensed (award procedures / licence conditions)?

 - What role will service providers play and what should be the rules for interconnection between
different networks and between networks and service providers?

 - Should mobile networks be able to build their own or use third party fixed infrastructure
within their networks?, and

 - What steps are needed help the transition from niche market mobile communications today to
mass market personal communications tomorrow?

At the same time, comments were invited in a range of areas linked to on-going policy actions
which are important to the overall development of the sector. These included access to third
county markets, data protection and privacy, health and safety issues, the environment,
standardisation, and consumer protection.

THE CONSULTATION ON THE G RE EN PAPER AND SUMMARY OF THE RESULTS

The public consultation period was initiated with the adoption of the Green Paper on 27 April
1994 and continued through to the middle of September. The Commission received more than 70
written comments from European and national organisations, companies and individuals active in
the communications field, both inside and outside the European Union. In addition a series of
consultation meetings resulted in a substantial contribution being made to the work of the
Commission. This included meetings involving fixed network and mobile operators; the service
provider industry, users, equipment manufacturers, consumer groups and with representatives of
the trade unions in the communications industry. More than 250 organisations participated either
orally or in writing.

The results of the consultation are summarised below to show the areas of consensus and those

areas where, whilst divergent views were expressed, general trends could be identified.

SUMMARY OF THE AREAS OF CONSENSUS

- the need for the abolition of exclusive and special rights [2] ;

- the approach to national licensing procedures and licence conditions;

- the importance of service providers as a new way of providing télécoms services.

- the need for effective procedures to make frequencies and numbers available in time
particularly in relation to new digital services, where lack of agreement could threaten their
development;

- the need for number aloocation on fair, transparent and non-discriminatory grounds;

- the evolution strategy towards the personal communications environment

SUMMARY OF KEY AREAS WHERE DIVERGENT VIEWS WERE EXPRESSED

- _The future regulation of service provision._

In particular, (i) should there be an implied obligation on network operators to deal with all
service providers in order to promote the emergence of pan-European services, and (ii) whether
a Code of Conduct for service providers should be voluntary or mandator)'?

The views expressed reflected national approaches to regulation and experience of independent
service provision.

 - _Infrastructure._

Should mobile network operators have the right to use of own or third party infrastructure
(including using microwave links)? Should they be able to directly connect to other mobile or
fixed networks nationally or in other Member States?

There was broad support for early action on liberalisation and direct interconnection, with the
exception of a majority of existing fixed network operators. The approach should, however,
be integrated into the global approach to be set out in Green Paper on infrastructure
liberalisation [3] .

 - _Interconnection._

Different views were expressed about the future role of the Open Network Provision (ONP) as
the basis for the regulatory framework in the sector, and, in particular, the extent to which
regulatory intervention should take precedence over commercial negotitiations.

**2**

**3**

In practice, mobile services are increasingly provided on a competitive basis with, for example, users having a
choice between at least two digital mobile telephony systems in almost every Member State, with firm plans
underway for a second network in the few Member States where this is not yet the case.

See, Green Paper on the liberalisation of telecommunications infrastructure and cable television networks: part 1

Principle and Timetable, COM(94) 440, 25.10.94.

Even where there was no consensus, the general trends suggest that positions are possible.

In relation to service provision, the development of that layer of the market should be kept under
review, in particular, to see whether legislative measures prove themselves necessary.

As regards infrastructure and direct interconnection, the Commission agrees that the use of
alternative infrastructure by mobile networks must be treated in the context of the Green Paper on
Infrastructure (COM(94) 440) and this communication contributes to the general debate on that
issue [4], without prejudging its outcome.

Finally, in relation to the future pattern for interconnection, the issues are closely linked to the
proposed adaptation of the ONP framework to a competitive environment. Once again, this
Communication makes a useful contribution to that debate.

Despite the absence of a complete consensus on all issues, the Commission believes its is possible
to put forward a comprehensive set of proposals for the sector. These are summarised below.

```
ACTION REQUIRED FOR THE FUTURE REGULATORY ENVIRONMENT

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On the basis of the consultation, a comprehensive programme of action can now be proposed.

Some proposals are specific to the mobile sector. Others such as those for infrastructure,
interconnection and the future role of ONP are integrally linked to on-going work preparing the
télécoms regulatory environment for the full liberalisation of voice telephony services. All of these
actions must at the same time be viewed in the context of the Information Society and the
Commission's Action Plan on Europe's Way to the Information Society.

PRIORITY AREAS FOR SECTOR SPECIFIC ACTION

 - Introduction of competition. _All remaining special and exclusive rights should be abolished_
_by J January_ _1996_ _and the competition rules should be fully applicable to the sector._

_•_ Development of a Code of Conduct for Service Providers.

 - Ensuring service provider access to the market.

 - Promoting the availability of frequency needed for new digital services and for operators to
combine different technologies within one network and one service package for users; as well
as targeted programmes to support market entry of emerging mobile technologies.

 - Allowing after 1 January 1998, mobile network operators to provide public voice services via
the fixed network and allowing fixed network operators to use radio-based technologies.

 - Establish European level licensing of satellite PCS services.

The Green Paper proposes the _"immediate removal of restrictions on the use of own or third party infrastructure_

_authorised in Member States_ _to provide links, including microwave links, within the mobile network for_

_the provision of mobile communications_ _set-vices"._

PRIORITY ACTION LINKED TO GENERAL REFORM OF TELECOMMUNICATIONS IN 1998

- Removal of restrictions on the use of alternative infrastructure within mobile networks, in line
with policy agreed within the context of the Green Paper on Infrastructure.

- Regulation of interconnection through ONP and the Treaty competition rules, within the
context of an Interconnection Directive and the proposals for the future adaptation of ONP to
be tabled by 1 January 1998.

- Establisliment/amendment of rules for the mutual recognition of equipment, licenses and data
protection and privacy, within the framework of current proposals.

ADDITIONAL ACTION REQUIRED IN DEVELOPING THE OVERALL REGULATORY AND

TECHNOLOGICAL ENVIRONMENT

- Establishing schedules for standardisation, numbering and frequencies, as well as timetables
for binding decisions on implementation by the Member States.

- Addressing the international agenda, in particular, in relation to access to third country
markets and the development of new technologies within the overall context of the global
debate on "information highways".

 - Developing a comprehensive approach towards health and safety; the environmental impact of
mobile communications and towards employment trends and retraining.

 - Actively supporting through Community research programmes and other actions the
development of advanced mobile communications systems, and in particular, the evolution
towards universal mobile telecommunications system [5] (UMTS).

CONCLUSION

The broad consultation on the Green Paper on Mobile and Personal Communications has provided
an opportunity for all interested parties to assist in shaping the emerging regulatory framework.
This Communication sets out the results of that consultation process in detail and proposes
concrete action to implement the conclusions drawn.

Confusion should be avoided between UMTS, which is a generic name of an emerging family of technologies
and the political goal of universal service.

EXECUTIVE SUMMARY ...;. 2

I INTRODUCTION 13

II THE CONSULTATION PROCESS 14

III COMMENTS RECEIVED ON THE MAIN POSITIONS PROPOSED IN THE

GREEN PAPER: 15

III. 1 Licensing conditions for mobile network operators 15

III. 1.1 Abolition of special and exclusive rights 15

III. 1.2 Future licensing procedures and licence conditions 15

III. 1.3 Duration of licences 16

III. 1.4 Reduced license conditions for Private Mobile Radio Systems 17

III. 1.5 The application of mutual recognition to equipment and licences 17

III.2 Service Provision 17

111.2.1 Independent service provision alongside direct service provision 17

111.2.2 The need for a fair competitive environment 18

111.2.3 The removal of restrictions on innovative service combinations 18

111.2.4 Code of Conduct for service providers 18

111.2.5 Obligation to meet reasonable requests to deal 19

111.2.6 The role of Roaming in the future environment 19

III. 3 Interconnection 20

111.3.1 ONP as the basic framework for interconnection, with priority given

to commercial agreement between the parties 20

111.3.2 Ensuring fair competition within interconnection arrangements 20

111.3.3 Transparency for interconnection terms 20

111.3.4 Interconnection charges 20

111.3.5 Standards for interconnection 21

111.3.6 Interconnection for private mobile radio systems 21

111.4 Infrastructure 21

III 4.1 The right to self-provide or use third-party infrastructure and the

right of direct interconnection 21

III.4.2 Sharing infrastructure 21

111.5 Radio-frequencies 22

**9**

111.5.1 The importance of frequencies in the new environment 22

111.5.2 Support for the basic Union approach involving the ERC 22

111.5.3 Balance of spectrum between telecommunications, broadcasting and
defence use 22

111.5.4 Priority areas for frequency policy 22

II 1.6 Numbering 23

111.6.1 The importance of numbering in the new environment 23

111.6.2 Support for the basic Union approach to numbering 23

111.6.3 Priority areas for numbering policy 23

111.7 The Evolution towards personal communications services 24

111.7.1 The concept of Personal Communications 24

111.7.2 The role of service providers in the personal communications
environment 24

111.7.3 The combination of technologies in the personal communications
environment 24

111.7.4 Entry of mobile operators into the fixed network and the use of
wireless technology by fixed network operators 25

111.7.5 Licensing* in the personal communications environment 25

IV POSITIONS TAKEN ON THE MEASURES REQUIRED FOR
IMPLEMENTATION AND THE ACTION LINES FOR THE DEVELOPMENT

OF A FAVOURABLE ENVIRONMENT 25

IV. 1 Data protection and privacy 25

IV.2 Health and Safety 26

IV.3 Monitoring the impact on employment of the developing mobile market 26

IV.4 Standards 26

IV.5 Trans-European Networks and services, and satellite-based personal

communications 27

IV.6 Access to third country markets 27

IV.7 The issue of fraudulent use of mobile networks 27

IV.8 The issue of a single regulatory authority 27

IV.9 procedures for Consultation 28

V EVALUATION BY THE COMMISSION 28

V. 1 Areas of general consensus 28

**10**

V.2 General positions on the future development of the sector 28

V.3 Action required for the future regulatory environment 30

VI PRIORITIES FOR ACTION 30

VI. 1 Sector-specific action 30

VI. 1.1 Introduction of competition 30

VI. 1.2 Development of a Code of Conduct for Service Providers 30

VI. 1.3 Ensuring service provider access to the market 31

VI. 1.4 DCS 1800 licences and access to GSM extension bands 31

VI. 1.5 Public access/Telepoint applications and DECT-based systems 31

VI. 1.6 Allowing mobile network operators to provide public voice service

via the fixed network 32

VI. 1.7 Ending restrictions on fixed network operators 32

VI. 1.8 Targeted programmes to support market entry of emerging mobile

technologies: TFTS, ERMES, TETRA, DSRR 32

VI.1.9 Monitoring issues of fraud 33

VI. 1.10 European licensing of satellite PCS services 33

VI. 1.11 Consultation procedures 34

VI.2 Actions linked to general reform of telecommunications (required by 1

January 1996) 34
VI.2.1 Removal of restrictions on the use of alternative infrastructure

within mobile networks 35
VI.2.2 Regulation of interconnection arrangements within the framework of
Open Network Provision and Treaty competition rules 35

VI.2.3 Amendment of Directive 91/263/EEC on mutual recognition for
terminal equipment 36

VI.2.4 Adoption of proposals pending in the field of mutual recognition of
licensing 36

VI.3 schedules for standardisation, numbering and frequencies, and the schedule

for adoption.of binding decisions on implementation 37

VI.3.1 Standardisation 37

VI.3.2 Frequencies.. 37

VI 3.3 Numbering 38
VI.4 The international agenda 39

VI.4.1 Third country access 39

**11**

VI.4.2 International co-ordination on evolution towards UMTS 39

VI.4.3 The role of personal communications in Information Highways 40

VI.5 Safeguarding the public interest 40

VI.5.1 Development of a global Action Programme for Health and Safety

in the mobile sector 40

VI.5.2 On-going assessment of the environmental impact of the
development of mobile and personal communications 40

VI.5.3 On-going monitoring of employment trends and training needs in the

communications sector 41

VI.5.4 Data protection and privacy 41

VI.6 Universal Mobile Telecommunications Services 42

VI.6.1 Continued support for Community research programmes into

advanced mobile communications and telematics 42
VI 6.2 Support for the work of the ETSI Special Mobile Group and
promotion of a UMTS MoU 42

VI.6.3 Investigation of potential of satellite-based UMTS 43

VII CONCLUSIONS AND TIMETABLE FOR ACTION 44

ANNEX 1 : BRIEF OUTLINE OF THE GREEN PAPER ON MOBILE

AND PERSONAL COMMUNICATIONS 47

ANNEX 2: LIST OF CONTRIBUTORS TO THE CONSULTATION ON THE

1994 GREEN PAPER ON MOBILE AND PERSONAL

COMMUNICATIONS 49

ANNEX 3: LIST OF ACRONYMS.... 51

PROPOSAL FOR A COUNCIL RESOLUTION ON THE FURTHER DEVELOMENT

OF MOBILE AND PERSONAL COMMUNICATIONS IN THE EUROPEAN

UNION 52

**12**

I INTRODUCTION

Mobile communications has developed over recent years into a key area of growth in the
Union. Europe has now more than 11 million cellular mobile telephony users, 3 million more
than at the time of compilation of the Mobile Green Paper. There are also more than 8
million users of other mobile communications services, in particular paging and private
mobile radio systems. It is forecast that by the year 2000, there could be as many as 40
million users in the European Union, and, with the growing expansion into personal
communications services (PCS), up to 80 million users by the year 2010.

In the light of the potential mass market for personal communications, a coherent policy
framework for the sector, and for the development of trans-European networks, must be
promoted in the context of the Union's global strategy on growth, competitiveness and
employment.

It is against this background that the Commission adopted on the 27 April 1994 its Green
Paper on Mobile and Personal Communications [6], referred to hereinafter as "the Green
Paper".

In the meantime, the mobile and personal communications sector has been also brought to the
forefront of the debate on the information society. The report on "Europe and the global
information society" [7] identified mobile communications as a necessary building block of the
information society and advised on the strengthening of its potential. Both the Commission's
response to the Report, the so-called Action Plan, and the reaction of the European Council
to it, emphasised the importance of mobile communications in the development of networks
and services and announced that it would present a report on the results of the consultation
phase on the Green Paper by the end of 1994.

This Communication constitutes that report. It should be read against the background of the
Green Paper which sets forth a coherent set of proposed positions and provides substantial
detail on the technical, market and regulatory aspects of the sector [8] .

A brief outline of the Green Paper is shown in Annex 1 for ease of reference.

Towards the Personal Communications Environment : Green Paper on a common approach in the field of mobile
and personal communications in the European Union (COM(94)145 final, 27.04.1994).

Kurope and the global information society, Recommendations to the European Council, 26 May 1994

The Green Paper also includes a detailed Glossary of terms used in the sector and referred to in this

Communication.

**13**

**10**

**11**

**THE CONSULTATION PROCESS**

The aim of the consultation was to obtain the views of all interested players on the future
regulatory framework in the area of mobile and personal communications.

The public consultation period was initiated with the adoption of the Green Paper on 27 April
1994 and continued through to the middle of September. The Commission received more
than 70 written comments from European and national organisations, companies and
individuals active in the communications field. These included contributions from many of
the Telecommunications Organisations (TOs) and mobile operators in Europe, as well as
from the European Telecommunications Network Operators association; from individual
service providers and national representative associations; from large and medium-sized
users of telecommunications services and from user associations; as well as from
manufacturing associations and individual equipment suppliers. Written contributions were
also received from the CEPT's European Radiocommunications Committee (ERC) and its
European Committee for Telecommunications Regulatory Affairs (ECTRA) ; from the trade
unions, and from the European Data Protection Commissioners. In addition comments were
received from the GSM [9] and ERMES [10] Memoranda of Understanding. Further comments
were received from organisations and companies based in other European countries,
including the members of the European Economic Area, and from North America.

Formal opinions on the Green Paper have also been adopted or are in the process of being
adopted by the European Parliament, the Economic and Social Committee and the
Committee of the Regions, as well as by the Joint Committee of Telecommunications which
brings together management and unions in the Telecommunications Organisations (TOs)
within the Union.

In addition to these written comments, a series of consultation meetings resulted in a
substantial contribution being made to the work of the Commission. These meetings started
with a general gathering held in June for all participants in the sector (fixed and mobile
network operators, service providers, equipment manufacturers, consumer organisations and
European bodies active in the fields of numbering, licensing, frequencies and data protection)
which was attended by more than 130 organisations, companies and associations.
Subsequently separate meetings were held for the TOs and mobile operators; for the service
provider industry and for representatives of the trade unions in the communications industry.
In addition to these consultation meetings, the Commission received presentations from the
GSM MoU and from consumer organisations. More than 250 organisations participated
either orally or in writing.

Consultations at a European level were complemented by those held at a national level within
a number of Member States.

The Commission also worked closely with the High Level Committee of National Regulatory
Authorities, in accordance with Council Resolution 93/C 213/01".

A list of the hearings and of the written comments received is set out in Annex 2.

Global System for Mobile communications ; see Green Paper.

European Radio Messaging System (paging) ; see Green Paper

Council Resolution of 22nd July 1993 on the review of the situation in the telecommunications sector and the

need for further development in mat market, '93/C 213/01 ; OJ C213/1, 6 August 1993.

**14**

IN COMMENTS RECEIVED ON THE MAIN POSITIONS PROPOSED IN THE

GREEN PAPER

In the following paragraphs of this section, the main comments received during the
consultation process are summarised according to the positions set out in the Green Paper.
For those wishing further details, reference should be made to the full comments which are
available on request.

111.1 LICENSING CONDITIONS FOR MOBILE NETWORK OPERATORS

_III._ _1.1_ _Abolition of special and_ _exclusive_ _rights_

There was widespread support for the abolition of exclusive and special
rights in the mobile communications sector. Remaining exclusive and
special rights were seen by many contributors as holding back the
development of the sector, in particular, by limiting competition, keeping
prices higher and restricting the range of mobile service available.

There was general acceptance that, subject to market demand, a minimum of
two licences should be granted for each mobile technology. Additionally,
strong support was expressed for the recommendation that at least one
licence for DCS 1800 [12] systems should be granted in each Member State and
that access to DECT [13] be made available.

///. _1.2_ _Future licensing procedures and licence conditions_

In relation to the future licensing procedures and the framework for licensing
conditions, there was strong support for open, nondiscriminatory and
transparent licensing procedures.

In order to ensure a fair competitive environment, it was seen as essential
that both incumbent operators (particularly, where they were also operating
a fixed network or were affiliated to the fixed network operator) and new
entrants be subject to equivalent licensing conditions, though where
appropriate, a new entrant's licence could be adapted to redress any specific
advantages gained by the incumbent resulting from earlier entry into the
market. This extended to the need for equality in the duration of licence
terms granted.

These comments on equality included calls for clear time limits to be set for
the completion of the assessment of bids by national regulatory authorities; à
requirement that, where possible, competing mobile systems should
commence operation at the same time and that no operators should
automatically qualify for a new licence.

12 Standard for micro cellular communications systems developed by ETSI, building on the GSM standard : see
Green Paper.

13 Digital European Cordless Telecommunications ; new digital cordless standard developed by ETSI ; see Green
Paper.

15

In relation to the method of awarding licenses, there was overwhelming
support from all sections of the industry for the use of comparative bidding.
The use of lotteries found virtually no support, whilst auctioning was
criticised as providing little guarantee of eventual service quality as well as
leading to higher prices for equipment and services for the user .
Nevertheless, a number of Member States still put forward the view that,
given the scarcity of the frequency resource, it was appropriate to place a
commercial value on the use of that resource.

Divergent views were expressed with regard to the grounds on which
licences might be refused. Most mobile operators, service providers and
users emphasised the need for competition and so favoured only a limited
number of non-economic grounds on which licences might be restricted,
although a number of comments stressed the statement in the Green Paper
that these could include an assessment of viability of particular networks and
the quality of service. [I4 ]

_III_ _1.3_ _Duration of licences_

A particular point of concern raised by many existing mobile and fixed
network operators was the need for licence duration periods to be of
sufficient length, not only to allow operators to recoup investment costs, but
also to stimulate continuing network investment during the term of the
licence, including the adaptation of existing networks to new technologies.
Some comments even suggested that as a general principle licences should be
of unlimited duration, subject to appropriate safeguards allowing termination
in the case of misconduct. On the other hand, some mobile operators and
service providers with experience of competitive markets urged the
Commission to take stronger action, especially where current licences have
been granted under monopoly or duopoly conditions, to assess whether
effective competition was being established and, if this was not the case, to
act appropriately.

There was general agreement that the length of both operating licences and
frequency licences should be the same.

hi the Green Paper, these limited conditions were identified as essential requirements and public service
specifications in the form of trade regulations.
Essential requirements to be taken into account concern in particular the effective use of the radiofrequency
spectrum and electromagnetic compatibility requirements, as well as security of network operation, maintenance

of network integrity, interoperability of services in justified cases, data protection in justified cases, and user
safety and safety of employees.

Public service requirements concern conditions of permanence, availability and quality of the service. The
safeguarding of permanence, availablity and quality of the service may imply fulfilling conditions relating to the
technical competence and financial resources of the licensee.

**16**

///. _1.4_ _Reduced license conditions for Private Mobile Radio Systems_

Contributors emphasised the need for implementation of the Green Paper
proposals to take full account of the future role of private mobile radio
(PMR) services. In particular, contributors with experience of North
American markets and equipment industry emphasised the importance of
PMR [15] . The flexible regulatory and licensing approach proposed in the
Green Paper was generally welcomed.

///. _1.5_ _The application of mutual recognition to equipment and licences_

There was support for the further practical application of the principle of
mutual recognition for mobile terminal equipment. A specific point raised
was that in relation to equipment, the principle of mutual recognition should
not be confined to radio equipment used for roaming (GSM, DECT), but
should also extend to equipment which can be used in common collective
frequencies (such as DSRR [16] equipment). It was urged that procedures
applying to the preparation of relevant TBRs and CTRs [17] should be
accelerated.

There was also general agreement with the statement in the Green Paper that
the principle of mutual recognition would be of only limited application in
the field of mobile services, (Mobile satellite communications, PMR
systems, local systems in border areas) because of the physical limitations
imposed by frequency spectrum.

III.2 SERVICE PROVISION

_III._ _2.1_ _Independent service provision alongside direct service provision_

A large number of contributions recognised the value of both independent
and integrated service provision as parallel means of developing the mobile
market and extending customer choice as regards services and tariffs.

1 ? Private radiocommunications systems usually operate on a local or regional basis from a single base station and
using a single or small number of radio channels. Communication is generally limited to a single (closed user)

group.

One commentator compared the situation in Europe with the USA. In Europe in 1993, there were 5.5 million
PMR users compared with 17 million in the USA.

16 Digital Short Range Radio, new digital standard developed by ETSI in the Private Mobile Radio
communications field ; see Green Paper.

17 Common Technical Regulations for type approval of terminal equipment according to the procedures of

Directive 91/263/EEC. TBRs provide the technical basis for CTRs, on the basis of ETSI standards (ETS).

**17**

A number of TOs and mobile operators stressed the importance of service
provision directly integrated into their network activities. Concerns were
raised that any approach to service provision should not favour one
particular distribution channel over another. The role of direct retail sales of
mobile services in achieving high penetration levels in Scandinavian
countries was stressed. On the other hand, independent service providers
suggested that they were placed at a serious competitive disadvantage vis-àvis integrated service provision by mobile operators, stressing the
importance of achieving a fair competitive environment to overcome this
disadvantage.

///. _2.2_ _The need for a fair competitive environment_

To overcome the general concerns about fair competition, many mobile
operators, service providers and users stressed the need for sufficient
transparency in relation to operators having an integrated service provision
arm, in particular, to avoid the risk of cross-subsidies. A number of
independent service providers went further and suggested that a truly
competitive environment could only result from full structural separation of
network operation from service provision. A specific competition issue
raised by a number of contributors was the current pattern of substantially
subsidising customer acquisition through cheap equipment prices.

It was also suggested that full equality should extend to the relationship
between a TO and its service provision arm, alongside any requirements for
mobile operators to ensure arm's length dealings with integrated service
providers.

///. _2.3_ _The_ _removal_ _of restrictions on innovative service combinations_

In relation to the Green Paper's proposal to remove restrictions on the
combination of different services by a single service provider, this was
generally supported and recognised as an important driver of innovative
service provision.

///. _2.4_ _Code of Conduct_ _fan._ _service_ _providers_

There was strong support for mobile service providers not to be subject to a
licensing requirement.

The development of a Code of Conduct at a European level, setting out the
rights and duties of service providers with regard to both the operator and
the end user was strongly supported. It was felt that such a Code should be
drawn up by all interested parties in the sector.

Comments focused on whether the Code of Conduct should be mandatory or
voluntary. Many fixed and mobile network operators were concerned about
the value of a voluntary Code of Conduct. At the same time, many other
comments emphasised the need for a flexible approach to service provision
tailored to differing national regulatory traditions. This would prevent a
disproportionate regulatory burden being placed on the service provision
industry.

**18**

A particular concern was raised by Europe's Data Protection Commissioner
who suggested that any voluntary Code of Conduct should not undermine
binding national legal provisions in the field of data protection.
Furthermore, obligations in Community legislation relating to the essential
requirement of data protection and privacy must cover both network
operation and service provision, given the volume of data they process.

///. _2.5_ _Obligation to meet reasonable requests to deal_

A. major focus of discussion was on the proposal in the Green Paper that in
order to promote pan-European services and the innovative combination of
different mobile (and eventually fixed) services, network operators should be
required to meet reasonable requests to sell their services, with the
reasonableness of any refusal being subject to appeal before the relevant
national regulatory authority.

Some contributors, including some service providers, TOs and mobile
operators, expressed support for such an obligation. Nevertheless, many
who commented on this issue placed priority on the commercial autonomy of
network operators in choosing how their mobile services should be
distributed. They emphasised the need for flexibility and saw any obligation
as being placed firmly within the limits of competition law and normal
commercial practice. Once again, the successful penetration of mobile
services through retail outlets in Northern Europe was highlighted.

/// _2.6_ _The role of Roaming in the future environment_

There was general agreement amongst operators, service providers and users
for the need to support roaming as a means of ensuring pan-European
service provision, and that roaming should be encouraged in a way which
promotes user choice.

A number of comments emphasised the need, in line with the call in the
Green Paper for full recognition of roaming arrangements, to ensure the
acknowledgement of the commercial implications of any agreement through
which a mobile operator distributed its system's SIM cards through a service
provider in one Member State, i.e. that the service provider would then be
entitled to sell those cards anywhere in the Union, subject to the normal rules
of competition law.

**19**

111.3 INTERCONNECTION

///. _3.1_ _ONP as the basic framework for interconnection,_ _with priority given to_
_commercial agreement between the parties_

There was broad support for the use of the ONP framework as a regulatory
mechanism, providing it was modified in line with Council Resolution
93/C213/01 [18], to take account of an increasingly competitive environment.
In any event the position in the Green Paper which gave priority to
commercial agreement within the framework provided by those general
principles was welcomed. The involvement of NRAs would be confined to
situations where such agreements could not be reached.

However, at least one operator, with experience of North American markets,
suggested that giving priority to commercial agreements would be an
insufficient mechanism to expand the mobile market, in view of the fixed
network or dominant mobile operator's stronger bargaining position.

///. _3.2_ _Ensuring fair competition within interconnection_ _arrangements_

Many contributors stressed the importance of the principle of nondiscrimination and the need for sufficient transparency in the relationship
between TOs and their mobile subsidiaries, and between mobile operators
and their service provision arms.

A pai cular concern raised by certain mobile operators and independent
service providers was the need to obtain fair access to the TO's data
processing capability and its IN functions. However, many TO's believed
that interconnection obligations should not go beyond those already
envisaged in current Community legislation.

A number of fixed network operators indicated their view that
interconnection for mobile services must ensure, where appropriate, that new
market entrants make a fair contribution to the provision of universal

service.

///. _3.3_ _Transparency for interconnection_ _terms_

In order to allow regulatory supervision, support was expiessed by a number
of operators and service providers on the need for interconnection
agreements to be available at kust to the NRA, and that greater transr arer cy
might be desirable.

///. J. _4_ _Interconnection_ _charges_

In relatnn to interconnection ch^rge [r], it was argu;d tha these must lead to
efficient allocation of resources, be sustainable, promote efficient entry and
operation and allow efficient pricing decisions.

Ix
Council Resolution of 22 July 1993 on tlie review ot _axe_ situation in **the** telecorrLnunications **sector and** **tlie** need
for the further development **in that market, OJ** **C213/01,** **6.8.93.**

**20**

_III._ _3.5_ _Standards for interconnection_

In relation to the standards for interconnection interfaces, there was general
support for the positions in the Green Paper and, in particular, the emphasis
on voluntary standards in the future environment.

/// _3.6_ _Interconnection for private mobile radio systems_

There was substantial support for a less restrictive approach to the
interconnection of PMR systems both with each other and with tlie public
network.

II 1.4 INFRASTRUCTURE

Tlie issue of infrastructure was a central element in the discussions on the Green

Paper.

///. _4._ _J_ _The right to self-provide or use third-party infrastructure and the right of_
_direct interconnection_

There was considerable support drawn from throughout the sector for the
twin principles of immediate liberalisation of mobile communications
infrastructure and for the removal of restrictions on direct interconnection.

This was seen as a key means in overcoming current bottlenecks in leasedline supply and in allowing mobile operators control over their cost
structures, promoting lower prices and more rapid innovation. It was
perceived to be likely to lead to lower prices for users.

It was emphasised by some that action in this area must go hand-in-hand
with the development of an effective interconnection regime and that the
proliferation of own infrastructure should not lead to inefficient operation,
particularly with regard to the use of the radio spectrum.

At the same time, a number of comments made by the existing fixed network
operators indicated their opposition to the discussion of infrastructure issues
in the mobile area, outside the context of general discussions on
infrastructure regulation. The prime concern of these TOs was that such
moves on infrastructure and interconnection may undermine TOs' ability to
fund current investment in their networks and to maintain universal service.

Other TOs, particularly those with experience of markets where
infrastructure had been liberalised, did not share this concern.

///. _4.2_ _Sharing infrastructure_

The issue was generally recognised as extremely important, for both
technical and environmental reasons. Some TOs believed that infrastructure

sharing should be a matter for commercial agreement alone, and must ensure
no deterioration of the services concerned, whilst many others in the industry
accepted the principle of mandatory site sharing based on the overriding
grounds of environmental policy or public safety.

**21**

il 1.5 RADIO-FREQUENCIES

///. _5.1_ _The importance of frequencies in the new environment_

Tlie availability of adequate frequency spectrum on a pan-European basis
was seen as fundamental to the expansion of mobile and personal
communications. A clear and predictable environment for frequencies was a
necessary prerequisite against which investment strategies could be planned.
Such an environment must take account of both existing technologies and
new systems, balancing frequency allocation with market demand.

_III._ _5.2_ _Support for the basic_ _Union_ _approach involving the ERC_

There was general support for the approach to frequencies set out in the
Green Paper, placing reliance on the expertise of the ERC/ERO [19] .
Nevertheless, concerns remained about the ability of the current procedures
to keep pace with the market and to produce binding, implemented decisions
within the Union. Some support was expressed for a single regulator}'
authority to deal with common resource management on a Europe-wide
basis.

There was support for the application of ONP principles to the process of
frequency allocation, including the requirement for charges for frequencies to
be cost-oriented. The question of the financing of the removal of existing
users was also raised.

///. _5.3_ _Balance of spectrum between_ _telecommunications,_ _broadcasting and_
_defence use_

A specific widely-expressed concern was the need for a fair balance in
spectrum management policies between the competing interests of
communications, broadcasting and defence. The GSM MoU called for gains
achieved through greater spectrum efficiency from broadcasters (through
emerging digital technologies) to be applied for mobile use [:o] .

///. _5.4_ _Priority areas for frequency policy_

Whilst there was general agreement on the priorities identified for
frequencies in the Green Paper, the main views put forward reflected the
particular interests of the contributors concerned.

A new approach to tlie coordination of radiofrequencies in the Community, Communication from tlie
Commission conceniing a proposal for a Council Decision on the implementation by Member States of measures
concerning radiofrequencies (COM(93)382, 10.9.1993).

Attention was drawn to substantial frequency efficiency gains possible in e.g. the broadcasting field.
The example was cited of current national broadcasting channels using traditional analogue techniques which
require between 50-70 MHz in contrast to digital technologies which would require just 8 MHz to deliver 4

channels

**22**

The GSM MoU, for example, called for tlie release of GSM extension bands
by January 1996, and for the common designation of DCS 1800 bands after
completion of current ERC work. Further, there was strong support for
increasing PMR services current allocation which was seen as inadequate to
meet the potential of such services [21] . Tlie basic requirement for PMR was
seen to be 100 MHz in the band below 1 GHz.

111.6 NUMBERING

///. _6.1_ _The importance of numbering in the new environment_

In common with the comments on frequencies, there was general agreement
on the central role of numbering in the creation of a competitive mobile
market, and the need for co-ordination at a European level to provide a
stable and predictable environment. A number of contributors raised the
issue of the cost of numbering changes as a major factor in determining the
degree of change to be implemented at a European level.

///. _6.2_ _Support for the basic_ _Union_ _approach to numbering_

The basic approach to numbering proposed in the Green Paper, using the
expertise of ETO/ENF via Community mandates, was generally supported.

Given the impact of numbering on the competitive environment, there was
veiy strong support from mobile operators, service providers and users for
the application of the principles of non-discrimination, transparency and
proportionality in numbering allocation through independent authorities.

Numbering policy must also take full account of the data protection issues
raised by mobile numbers in view of the fact that they may constitute a
personal identifier.

///. _6.3_ _Priority areas for_ _numbering_ _policy_

Whilst there was general support for harmonisation of directory and
emergency service numbers, there was less certainty concerning the need to
harmonise numbering for value added services, Intelligent Network services
or for basic mobile network access codes.

Support was expressed both by mobile operators and service providers for
work to advance the development of number portability. This was seen,
particularly by independent service providers, as central to rebalancing the
market power enjoyed by mobile network operators.

Comments from a number of mobile operators and service providers
supported the call for a European Telephony Numbering Space in order to
speed new service deployment, whilst other contributors stressed the cost
involved in any re-organisation.

:i 'Hie example was cited of an average 50 MHz allocation in Europe compared with 100 MHz in the USA, in

addition to a wide variety of frequency bands and channel separations which prevented efficient operation in

Europe or economies of scale.

**23**

**m . 7** **T H E** **E V O L U T I O N T O W A R D S P E R S O N A L C O M M U N I C A T I O N S** **S E R V I C E S**

///. 7. _1_ _The concept of Personal_ _Communications_

The vision of personal communications based on the full integration of fixed
and mobile technologies and services put forth in the Green Paper was
broadly supported. Contributors stressed that the current development of
network intelligence and the increasing cost-effectiveness of mobile
communications outside urban areas show that the market is already moving

in this direction.

With regard to UMTS [22], several comments both from operators and the
manufacturing industry stressed their vision of such services as the

combination of mobile and fixed network communications, via different

technologies, delivered through single terminals and heavily reliant on full
interconnection and interoperability of the different delivery systems
concerned. The regulatory focus must be on establishing the right conditions
for such new technologies to emerge, rather than on attempting to pick a
winning technology. Other comments saw UMTS as a more unified
technology concept which required a long term vision and common
development efforts.

/// 7 _2_ _The role of service providers in the personal communications_ _environment_

The role of service providers in developing Personal Communications
Services was widely accepted. Though many integrated and independent
service providers continue to maintain a national focus, others saw this type
of innovation as central to the development of pan-European services

///. 7. _3_ _The combination of technologies in the personal_ _communications_

_environment_

The promotion of cordless PBXs, CT2 and DECT technologies were seen as
important elements in the new PCS environment. In particular, the

restrictions on the combination of DECT and GSM and on the combination

of DCS 1800 and GSM should be rapidly removed to stimulate personal
communications services, and in particular, to allow full in-house and outhouse mobility.

Universal Mobile Telecommunications System, a technology and standard for third generation mobile digital
systems, currently under development with ETSI and by the RACE programme. UMTS should support full
personal communications services, delivered over a combination of fixed and mobile networks.

Work in the framework of tlie International Telecommunications Union (ITU) in this field is carried out under

Future Public Land Mobile Telecommunications System (FPLMTS).

**24**

///. 7. _4_ _Entry of mobile operators into the fixed network and the use of wireless_
_technology by fixed network_ _operators._

Many mobile operators and some TOs expressed support for the proposal
that after 1998 entry for mobile operators into the fixed market should be
possible. At the same time, TOs were supportive of the possibility' of the use
of radio-based technology in their networks, subject to frequency
availability, notably as a means of extending universal service. Nevertheless
certain mobile operators were reluctant to see fixed network use of mobile
extensions at too early a stage if it resulted in an unfair distortion of
competition.

///. 7. _5_ _Licensing in_ _the_ _personal communications environment_

In relation to the licensing of future systems, including third-generation
technologies, support generally focused on co-ordinated national licensing
for introduction on a pan-European basis of satellite-based services or thirdgeneration technologies. A specific concern was that any pan-European
approach to licensing should not reduce the overall number of players in the
market and so limit competition. Some contributors supported an
experimental approach to licensing, particularly, in relation to satellite PCS
systems which were regional by nature. It was also suggested that the
specific needs of the aviation sector require a pan-European rather than
national approach to licensing.

IV POSITIONS TAKEN ON THE MEASURES REQUIRED **FOR**
IMPLEMENTATION AND THE ACTION LINES **FOR** THE DEVELOPMENT OF

A FAVOURABLE ENVIRONMENT

The main action lines and flanking measures proposed in the Green Paper were generally
endorsed in tlie consultation, subject to the various comments set out above. The emphasis in
the Action Lines on health and safety and environmental issues were widely supported.
However, a range of specific issues arose from the general discussions of both the Action
Lines and the flanking measures, aimed at maintaining the public interest as a more
competitive environment emerges.

**IV.** **1** **DATA PROTECTION AND PRIVACY**

A number of comments, notably those from the European Data Protection
Commissioners, stressed that without effective data protection and safeguards
guaranteeing privacy, public acceptance of Union-wide mobile and personal
communications networks and services cannot be secured. Action in this area, and, in
particular, the rapid adoption of pending Commission proposals in this area [23] were
seen as urgent priorities.

Amended proposal for a Council Directive on the protection of individuals with regard to the processing of
personal data and on the free movement of such data, COM(92)422, 15 December 1992 ("the general data
protection directive").

Amended Proposal for a European Parliament and Council Directive concerning the protection of personal data
and privacy in the context of digital telecommunications networks, in particular the Integrated Services Digital
Networks (ISDN) and digital mobile networks, COM(94)128 final, OJ 288, 13.06.1994.

**25**

Two specific issues were also raised, namely, the strengthening of data protection's
status as an essential requirement, and secondly, the need for adequate safeguards to
be put in place to prevent unauthorised interception of satellite communications
(particularly of uplinks) in the context of the new low earth orbiting systems. Finally,
the European Data Protection Commissioners stressed their view that emerging
standards for third-generations systems must allow the cost-free option of
communicating without being obliged to identify oneself.

IV.2 HEALTH AND SAFETY

Comments addressed the fundamental need to ensure that mobile systems and
equipment should be operated safely by both employees and users. The proposal by
the Commission to establish a comprehensive action programme to accelerate
necessary safety standards, and to monitor the issue of possible health hazards through
electromagnetic exposure was welcomed.

Support was also expressed for continuing work in relation to limiting the effects of
electromagnetic exposure.

I V.3 MONITORING THE IMPACT ON EMPLOYMENT OF THE DEVELOPING MOBILE

MARKET

The trade unions in the telecommunications sector stressed the need for the

Commission to study the actual and potential effects of the emerging mobile market on
employment, in particular, the effects on employment amongst the TOs.
Consideration should be given on the basis of such study to promoting re-deployment
and retraining within the sector.

IV.4 STANDARDS

The further development of standardisation for mobile and personal communications
services and equipment was fully supported. Action was urgently needed to continue
the development of CTRs and interim-CTRs in order to support the mutual
recognition of terminal equipment type approvals. Additionally, the extension of
mutual recognition through bilateral agreements was identified by both mobile
operators and the equipment industry as an important trade goal for the Union.
Drawing on the experience of GSM, many contributions stressed the importance of
adequate funding for testing equipment and procedures for GSM Phase II and other
emerging technologies.

Two further concerns raised in the Consultation related to the need for a solution to

the role of intellectual property rights in the context of the work of ETSI. Secondly,
the GSM MoU stressed the problems encountered in selling GSM technology worldwide on the basis of different encryption standards. Both issues were seen as requiring
a political solution.

Specific concerns relating to radio equipment were raised by the ERC and the GSM
MoU in the context of Directive 91/263/EEC. These related in particular to the need
for rapid change procedures for TBRs and procedures for type approval of
accessories. Other issues raised concerned mutual recognition of type approval and
certification procedures with third countries.

The standardisation process should also focus on new PMR standards, with one
organisation of business users suggesting the elevation of CT2 from an interim ETS to
a full ETS.

**26**

I V.5 TRANS-EUROPEAN NETWORKS AND SERVICES, AND SATELLITE-BASED

PERSONAL COMMUNICATIONS

Several commentators stressed the potential role of mobile services in developing the
Information Society and welcomed the acknowledgement in the Bangemann Group
Report on Europe and the global information society of GSM as a successful
implementation of the Trans-European Network concept.

The future satellite-based personal communications systems, including the so-called
Low Earth Orbit Satellites (LEOs) systems drew special attention, as well as the need
to secure a strong European role in these systems.

I V.6 ACCESS TO THIRD COUNTRY MARKETS

There was general support for the need to ensure open and comparable access to third
country markets. There was considerable concern about regulations in other regions
which prevented market access, particularly in North America. Given the global
character of GSM services, fair competition at a European level would not be
sufficient for its world-wide success, and priority had to be given to the on-going
GATTAVTO negotiations.

Key tests of this policy would be the ability of the European industry to participate in
the current US satellite-based PCS proposals and the possibility of European
technology being used in the PCS services currently being licensed in the United
States

Whilst many contributors felt that allowing the possibility of ownership restrictions in
Europe were important in achieving a more open market, a number of comments,
particularly but not exclusively from European mobile operators with substantial
foreign ownership, believed that these trade objectives could be best achieved by
avoiding the possibility of nationally-imposed ownership restrictions.

I V.7 THE ISSUE OF FRAUDULENT USE OF MOBILE NETWORKS

Many service providers and some operators raised concerns over the issue of bad
debts, credit and fraudulent use of mobile networks and equipment. Whilst these
issues were seen as being primarily of national concern, and by some as a matter for
commercial safeguards in agreements between operators and service providers, they
were also identified as having clear European implications in relation to
interconnection, obligations to deal, and the proposed Service Provider Code of
Conduct, as well as new data protection rules.

I V.8 THE ISSUE OF A SINGLE REGULATORY AUTHORITY

A number of contributors, picking up on the recommendations of the Bangemann
Group Report, argued strongly for a single regulatory agency at a Union level which
could manage common resources (such as frequency and numbering) and which could
ensure a consistent approach in national implementation of the Union regulatory
framework.

**27**

I V.9 PROCEDURES FOR CONSULTATION

Many comments stressed the need, in line with existing Union policy, for all actors in
the sector to be involved in key future decisions, such as the drawing up of a Code of
Conduct for service providers, and future frequency and numbering decisions. The
equipment industry proposed the creation of a consultative forum, bringing together all
those active in the sector to provide input into the regulatory process.

EVALUATION **BY THE COMMISSION**

On the basis of the comments and its analysis of the submissions, the Commission considers
that the main principles and objectives set forth in the Green Paper have found broad
support. On this basis the Commission considered it possible at this stage to :

 - identify areas of general consensus amongst all market participants;

-. set out general positions on the future development of mobile and personal
communications in the Community which are supported by a broad range of parties;

 - identify priority actions required for the development of the future environment.

This is set out below.

V. 1 AREAS OF GENERAL CONSENSUS

The Commission has found from the consultations that:

-» there is widespread support for the abolition of exclusive and special rights in the
mobile communications sector;

-» there is strong support for open, transparent, and non-discriminatory licensing
procedures ;

-• the vision of the personal communications environment based on the full
integration of fixed and mobile technologies and services was broadly supported,
allowing licence holders to adapt to emerging technologies as the market demands;

-• the role of service providers in developing personal communications services,
particularly on a pan-European basis, was widely accepted;

-» the timely availability of adequate frequency spectrum on a pan-European basis
was seen as fundamental to the expansion of mobile and personal communications
sector, to provide for a stable and predictable environment;

-» there was general agreement on the central role of numbering in the creation of a
competitive mobile and personal communications market and there was wide
support for number allocation through independent authorities on the basis of
transparent, non-discriminatory and proportionality-based principles;

-» general support was received for co-ordinated licensing for the introduction on a
pan-European basis of satellite based services and third generation systems.

V.2 GENERAL POSITIONS ON THE FUTURE DEVELOPMENT OF THE SECTOR

Based on the consultations, the Commission considers:

**28**

-* There is strong recognition of the role of ONP in the regulation of the mobile
communications sector and the need for the modification of the ONP framework,
in line with Council Resolution 93/C213/01 to take account of the increasingly
competitive environment, as the regulatory mechanism for interconnection tc
ensure fair competition with priority given to commercial agreement between
parties;

-• There is strong emphasis placed on the importance of non-discrimination and
sufficient transparency in tlie relationship between the mobile operators and the
fixed network operators and between the mobile operators and their service
provision arms, and the requirement to strictly apply competition rules.

-• The important role of the regulatory authorities in dispute resolution and the
definition of guidelines to ensure a common approach throughout the European
Union is broadly recognised;

-> On the issue of service provision, there are a number of issues where broad
support was voiced, while there were others on which consensus is currently not
possible:

-> there was support for the definition of a harmonised set of the minimum
requirements for a Code-of-Conduct for service providers, setting out the
rights and duties of the service provider with regard to both the operator and
the end user, by all interested parties in the sector;

-> the need to encourage roaming as a means of ensuring pan-European service
provision and as a means that allows a rich variety of user choices and
innovative services was emphasised by a large number of parties;

-» there was general importance placed on the removal of restrictions on the
combination of different services by service providers as an important driver
of innovative service provision, both national and Europe-wide;

-» as regards an obligation on mobile network operators to meet reasonable
requests to deal with service providers, service providers themselves
supported the importance of such an obligation, particularly to create the
right conditions for pan-European services provision and the innovative
combination of different mobile (and eventually fixed) services. Mobile
operators placed priority on commercial autonomy in choosing how their
services should be distributed. They emphasised that any agreement had to
be placed within the limits of competition law and normal commercial
practice.

 - Finally, with regard to infrastructure:

-> there is strong recognition of the need for the establishment of a clear regime
on the right to self-provision of infrastructure or use of third-party
infrastructure and the right of direct interconnection for mobile operators ;
However, there was disagreement in how far such a decision could be taken
outside the general context of the discussions on liberalising infrastructure.

-> it is considered important to set out clear guidelines establishing the
conditions and criteria under which infrastructure sharing is justified or
should be mandatory from an environmental or technical point of view.

**29**

v.3 ACTION REQUIRED FOR THE FUTURE REGULATORY ENVERONMENT

On the basis of the comments and the consensus achieved, the Commission finds that
the priorities for the implementation of the Green Paper should be defined at a Union
level along the following lines :

       - actions specific to the mobile sector;

       - actions in line with the general reform of the telecommunications sector;

       - schedules for standardisation, numbering and frequencies, and for the adoption of
binding decisions on implementation;

       - the international agenda;

       - safeguarding the public interest;

      - Universal Mobile Telecommunications Services.

These priorities are set out below.

**VI** **PRIORITIES FOR ACTION**

VI.1 SECTOR-SPECIFIC ACTION

_VI._ _1.1_ _Introduction of competition_

The mobile and personal communications sector will be one of the most
important areas of growth in the telecommunications scene over the next
decade. For its prosperous development, the liberalisation of the sector is
regarded as essential.

All remaining exclusive and special rights in the sector should be abolished
as soon as possible through full application of Community competition rules,
and with amendment of Directive 90/388/EEC [24] where required.

These measures should be completed before 1st January 1996.

_VI._ _1.2_ _Development of a Code of Conduct for Service Providers_

A set of minimum requirements, describing the rights and duties of service
providers, needs to be defined, with participation of all interested parties in
the sector. These minimum requirements should form the basis of a Code-ofConduct for service providers, in line with the positions proposed in the
Green Paper.

The Code of Conduct framework should be in place before 1st January
1996. It should be subject to bi-annual review, including an examination as
to whether the protection of consumer interests can be sufficiently
safeguarded by voluntary application of this code.

_24_ Commission Directive of 28th June 1990 on competition on tlie markets for telecommunication services

(90/388/l-EC ; OJ L 192/10,24.7.1990).

**30**

_VI._ _J._ _3_ _Ensuring service provider access to the market_

The vast majority of comments stressed the role of service providers for the
further development of the mobile and personal communications sector.

In line with the positions of the Green Paper, service providers, whether
independent or integrated into mobile network operations, should have full
commercial freedom to offer a combination of services provided under
different mobile licences as well as the ability to provide services in different
Member States, subject only to the provisions of the Treaty competition
rules.

On the issue of whether there should be an obligation for mobile network
operators to deal with reasonable requests from service providers, the
Commission continues to consider this to be a important principle for
supporting service innovation and pan-European service provision.
Nevertheless, in the light of the comments received during the consultation
process, priority should be given at this stage to commercial agreement.

This position should be subject to the evolution of the market and be
examined in the context of the periodic bi-annual reviews of the services
market mentioned under -VI.1.2.

_VI._ _J._ _4_ _DCS_ _1800_ _licences and access to GSM_ _extension_ _bands_

In order to allow the development of a Union-wide market for DCS 1800,
Member States should allocate at least one licence for operating mobile
systems according to the DCS 1800 standard as soon as possible, at the
latest after adoption of an ERC decision on the allocation of DCS 1800
frequencies and prior to 1st January 1998.

To allow the exploitation of the full potential of the GSM/DCS 1800 system
family [25], existing restrictions on GSM licensees regarding access to DCS
1800 frequencies, or on DCS 1800 licensees concerning access to GSM
extension bands, should be abolished at the latest by 1st January 1998.
Allocation should be subject to frequency availability and strict scrutiny
under the Treaty competition rules.

This is in line with the general Green Paper position proposing that mobile
network operators should be allowed to combine different mobile services,
provided under different licences and/or on the basis of different
technologies/standards, that no restrictions should be introduced into new
licences in this regard and that restrictions in existing licences should be
lifted.

_VI._ _1.5_ _Public access/Telepoint applications and DECT-based systems_

Prior to 1st January 1996, Member States should allocate licences for public
access /Telepoint applications, in particular for systems operating according
to the DECT standard.

According to the GSM MoU Comments, GSM should be seen as a system family comprising GSM phase 1,
GSM phase 2, GSM phase 2+, DCS 1800 and the DCS 1900 concept.

31

In order to promote the rapid take up of personal communications services
on a broad services platform, existing restrictions on combinations of DECT
and other mobile technologies/systems under existing licences should be
abolished before 1st January 1996.

In particular, GSM/DCS 1800 network operators should have the right to
install and operate DECT systems and to connect them to their networks
without additional operating or spectrum licences [26], subject only to scrutiny
under competition rules.

_VI._ _1.6_ _Allowing mobile network operators_ _to_ _provide public voice service via the_
_fixed_ _network_

In line with the Green Paper positions, mobile network operators or
independent service providers should be able to provide public voice services
via the fixed network, once public voice provision via the fixed network is
liberalised.

At the latest, this should be in accordance with the schedule for full
liberalisation of public voice services established in Council Resolution
93/C213/01, namely 1st January 1998, with, where justified, additional
transition periods of up to five years for Spain, Ireland, Greece, and
Portugal, and two years for Luxembourg, subject to the conditions which
may be agreed for such licences concerning universal service obligations or
sharing in the financing of such obligations, and subject to the Treaty
competition rules.

_VI_ _1._ _7_ _Ending restrictions on fixed network operators_

In parallel and in accordance with the Green Paper, any restrictions on
public fixed network operators from entering wireless and mobile fields,
other than those justified according to the Treaty competition rules, should
be lifted in order to allow full combination of fixed and mobile services, and
thus give full opportunity for the development of personal communications
services.

This implies that such operators should not be prohibited _ab initio_ from
bidding directly or indirectly for licences for any mobile communications
service. Existing prohibitions on such bids should be abolished at the latest
by the deadline set for full liberalisation in Council Resolution 93/C213/01,
namely, 1st January 1998, with additional transition periods for the Member
States referred to above, subject to strict scrutiny of market impact under the
Treaty competition rules.

_VI._ _1.8_ _Targeted programmes to support market entry of emerging mobile_
_technologies:_ _TFTS,_ _ERMES, TETRA, DSRR._

Specific programmes should be initiated to support, where required, new
mobile technologies currently being implemented in the marketplace. These
programmes should include reviews examining the current state of market
introduction and the level of support currently encountered, with a view to
enhancing the world market potential of the systems and technologies in
question, and proposing any measures required.

According lo comments by the GSM MoU, tins will encouiage the implementation of services according to the

DHCT/GSM interworking standard specified by ETSI SMG at present.

**32**

The Commission intends to award study contracts to investigate the status of
TFTS, ERMES, TETRA, and DSRR [27] mobile technologies. The studies
will in particular report on the licenses awarded, the perceived market
potential in Europe and the rest of the world, products developed or being
developed, and the availability of frequency spectrum in the Member States
of the Union.

It is considered that these actions will facilitate the planning of future
measures aimed at accelerating market introduction of these emerging mobile
technologies.

_VI._ _1.9_ _Monitoring issues of fraud_

The fraudulent use of mobile services and equipment has emerged as a major
concern during the consultation.

The Commission intends to monitor closely this phenomenon and propose
where required measures including a requirement on network operators to
implement the Equipment Identification Register (EIR) for digital terminals
and adding Physical Serial Numbers (PSN) to analogue terminals. Any
measures taken in this area must not restrict the further development of
roaming.

_VI._ _1.10 European licensing of satellite PCS services_

While the licensing of mobile systems was generally seen to best be carried
out at a national level, and co-ordinated licensing was considered in many of
the comments as a sufficient measure to ensure coherence for a future
UMTS, there was wide recognition that satellite-based personal
communications services should be seen as a special case, in view of their
Eu rope-wide coverage.

Given that licences for satellite based personal communications systems,
including the so-called Low Earth Orbit Satellites (LEOs) systems, are due
to be allocated in the United States by Spring 1995, there exists an urgent
requirement to establish a co-ordinated position with regard to licensing of
such systems in the Union.

The Commission considers that in this case, there is a clear case for
proceeding at the Union level, in order to avoid unco-ordinated action and to
ensure a strong European role in these future global systems.

Full account should be taken of the global aspects of these systems, with
licensing applications to be open to existing and future global systems, on a
reciprocal basis.

Tl'TS : the new digital Terrestrial Flight Telephone System (in-flight telephone for passengers), developed by
ins i

ERMES :European Radio Messaging System, the new digital paging standard developed by ETSI
TETRA Trans European Trunked Radio, the new digital standard developed by ETSI for applications for
private use on a shared basis, such as by closed user groups and use e.g. by police forces (of particular
importance also in the context of the implementation of the Schengen agreement).
DSRR :l)igital Short Range Radio, new digital standard developed by ETSI in the private mobile radio field.

For details see Green Paper.

33

Procedures should therefore be developed for licensing satellite-based
personal communications systems on a common basis at the Union level,
with the opening of the licensing process by 1st January 1996 at the latest.

_VI._ _1.11_ _Consultation procedures_

Many comments emphasised the importance of strengthening consultation
procedures in the sector. Included in some of the comments were proposals
for the creation of a permanent consultative forum, bringing together all
those active in the sector.

Such proposals are entirely consistent with the call for strengthening
partnership-building in the telecommunications sector contained in the
Commission's Communication of 19 July 1994 in response to the report on
Europe and the global information society. [28] . The Commission would
therefore support the creation of such a European Mobile and Personal
Communications Services Forum.

**VI.2** **ACTIONS LINKED TO GENERAL REFORM OF TELECOMMUNICATIONS (REQUIRED**

BY l JANUARY 1996)

A number of required actions are linked to the general reform of telecommunications
regulations required by 1st January 1996 in accordance with Council Resolution
93/C213/01 [29] . These concern general issues, such as the future structure of regulatory
coordination between Member States, and the issue of a future Single Regulatory
Authority raised in a number of comments, as well as a number of specific measures.

The measures concerned are considered below.

28 "Europe's way to the information society. An action plan. Communication from the Commission, COM(94)347,
19 July 1994.

29 Council Resolution of 22nd July 1993 on the review of the situation in the telecommunications sector and the

need for further development in that market (93/C 213/01 ; OJ 213/1, 6 August 1993).

**34**

_VI._ _2.1_ _Removal_ _of restrictions on the use of alternative infrastructure within_
_mobile networks_

The issue of free choice of infrastructure required for mobile network
operators was one of the core issues raised during the consultation.

Tlie Commission continues to consider the freedom for mobile network

operators to operate and develop their network for the purpose of the
activities allowed in their licence or authorisations, including a free choice of
fac-ilities used to support such activities, as essential for ensuring an
appropriate economic base for such operations.

In response to the report on Europe and the global information society, and
as announced in its Communication of 19th July 1994, the Commission
produced the first part of the Green Paper on infrastructure [30], proposing,
_inter alia,_ the full liberalisation of infrastructure used for mobile

communications.

_VI._ _2_ _2_ _Regulation of interconnection arrangements within the framework of Open_
_Nerwork_ _Provision and Treaty_ _competition_ _rules_

The Commission has put forward a Communication on the future adjustment
of Open Network Provision to a fully competitive environment [31] . The
Communication proposes a new Open Network Provision Interconnection
Directive in parallel with the implementation of the competition rules, to set
out in further detail the principles and the framework for promoting
interconnection.

Key orientations would be :

           - commercial negotiation to be the basis for interconnection agreements;

            - the National Regulator)' Authorities to play a role in laying down
principles for negotiation;

           - common principles to be applied for interconnection charges.

Two comprehensive studies are currently being carried out for the
Commission on accounting and interconnection [32] . The studies will be
submitted to a broad public consultation following their publication in
October 1994, such consultation to be completed in December 1994.

Proposals for an interconnection Directive will be tabled by the Commission
before 1st January 1996.

Green Paper on liberalisation of telecommunications infrastructure and cable TV networks (part I).

Present status and future approach for open access to telecommunicatins networks and services (Open Network
Provision), Communication from the Commission to the European Parliament and the Council (to be published).

"Cost allocation and the general accounting principles to be used in the establishment of access charges in the
context of telephone liberalisation in the EC", Arthur Andersen & Co, Turin, Italy.
"Interconnection in the context of Open Network Provision", Wissenschaftliches Institut fur
Kommunikationsdien.sie GmbH, Bad Honnef, Germany

**35**

Also anticipated is the amendment of Directive 90/387/EEC [33], in particular
adjustment of its scope, in order to ensure the general application of the
principles of equality of access, transparency, non-discrimination and
proportionality, which are particularly relevant in relation to licence award
procedures.

In parallel, the Commission intends to intensify its scrutiny of interconnection agreements under the Treaty competition rules

_VI._ _2.3_ _Amendment_ _of Directive 91/263/EEC on mutual recognition for terminal_

_equipment_

Directive 91/263/EEC [34] should be amended before 1st January 1996 to
cover mobile terminal equipment not capable of connection to the public
network, which is currently outside its scope. Accelerated application must
include more rapid adoption of Common Technical Regulations (CTRs) in
particular for terminal equipment using new digital mobile technologies.
Accelerated applications of Directives 91/263/EEC and 93/C97/EEC [35 ]

should also allow for mutual recognition of terminal equipment on the basis
of fulfilment of tlie essential requirements for those types of equipment for
which CTRs have still not been adopted.

Based on the comments received, particular issues to be addressed include
rapid change procedures for TBRs and type approval for accessories.

_VI._ _2.4_ _Adoption of proposals pending in the field of mutual recognition of_
_licensing._

The proposed Satellite Licensing Directive [36] which also covers satellitebased mobile communications, is currently under discussion in the Council.
It is expected that the Council will adopt a common position before the end

of 1994.

The amended proposal for a general Directive on telecommunications
licences [37] excludes the field of mobile communications. The Commission

notes the reservations in the consultation concerning the application of the
full mutual recognition principle to certain mobile communications fields,
owing in particular to issues of frequency allocation and coordination.

Council Directive of 28th June 1990 on the establishment of the Internal Market for Telecommunications

services through implementation of Open Network Provision (90/387/EEC ; OJ L 192/1, 24.7.1990).

Council Directive of 29 April 1991 on the approximation of the laws of the Member States concerning
telecoimiumications tenninal equipment, including tlie mutual recognition of their confomiity (91/263/EEC; OJ
I. 128/1,23.05 1991)

Council Directive of 29 October 1993 supplementing Directive 91/263/EEC in respect of satellite earth station

equipment (93/C 97/EEC ; OJ L 290/1, 24.11.1993).

Proposal for a European Parliament and Council Directive on a policy for tlie mutual recognition of licences and
olher national authorisations for the provision of satellite network services and / or satellite communications
services, COM(93)652 final - OJ 482, 4.01.1994.

Amended proposal for a European Parliament and Council Directive on the mutual recognition of licences and
other national authorisations for telecommunications services, COM(94)4! final - OJ 438, 22.03.1994.

**36**

**VI.3** **SCHEDULES FOR STANDARDISATION, NUMBERING AND FREQUENCIES, AND THE**

SCHEDULE **FOR ADOPTION OF BINDING DECISIONS ON IMPLEMENTATION**

Standards development and the development of TBRs in the mobile communications
field follows agreed procedures, established in particular according to Directive
91/263/EEC.

As regards frequency and numbering co-ordination, the frameworks proposed in the
Green Paper have in the meantime been established with the ERC / ERO and
ECTRA/ETO respectively. [38] An MoU and Framework Contract have been signed
between thèXommission and the ERC / ERO, as well as between the Commission and
ECTRA / ETO, according to which the Commission entrusts work on frequency and
numbering co-ordination to these organisations [39] .

_VI._ _3.1_ _Standardisation_

For the mobile and personal communications sector, a number of standards
have been adopted for GSM (TBR5 Phase 1 and TBR9 Phase 1), ERMES
(TBR7) and DECT (TBR6, TBR10 and TBR11). A majority of these
standards have been included in mandatory pan-European type-approval
specifications, Common Technical Regulations (CTRs).

Further standards have been requested by the Commission for GSM Phase 2,
GSM Phase 2+, GSM half rate codec, DCS 1800, LEO earth stations,
TFTS and TETRA. It is expected that these standards will be adopted
during 1995 and 1996.

_VI._ _3.2_ _Frequencies_

In order to secure the development of new mobile technologies binding ERC
Decisions [40] on the allocation of frequency spectrum by the European
Radiocommunications Committee are required for :

          - before 1 st January 1996 :

         - TETRA,

-DCS 1800

ERC and ECTRA have been created as two of the three committees under the new CEPT, see Green Paper.
ERC : European Radiocommunications Committee. The ERC has established the European Radio
Communications Office (ERO), Copenhague.
ECTRA : European Committee for Telecommunications Regulatory Affairs. ECTRA has set up the European
Télécommunications Office (ETO), starting from 1st September 1994 onwards, at Copenhague.

A substantial number of work requirements have been agreed or are under negotiation. Of special concern to
mobile / personal communications are, inter alia, :
- in the field of frequency planning/ co-ordination (ERC/ERO) : work requirements on DCS 1800, TETRA,
wireless LANs, mobile broadband systems, satellite PCS, VSAT/SNG, mobile satellite applications (general),

UMTS,

- in the field of numbering planning / co-ordination (ECTRA/ETO) : work requirements on UPT, including
European numbering space and PCS numbering and portability, non-discriminatory access to numbering, aspects
of user friendliness of numbering systems ;

- in the field of developing licensing conditions (ECTRA/ETO) : work requirements on satellite PCS, mobile
satellite network and services (general), SNG.

ERC Decisions, see Green Paper.

_**SI**_

       - satellite-based personal communications systems (including Low Earth
Orbiting satellite systems).

     - before 1st January 1998 :

       - UMTS, with a global objective of allowing for an early designation and
schedule of allocation for the bands set aside at WARC92 for

UMTS/FPLMTS.

_VI._ _3.3_ _Numbering_

With regard to numbering of telecommunication services, firm decisions by
ECTRA are required that will allow:

     - before 1st January 1996 :

       - the establishment of a European numbering space for freephone
services;

     - before 1st January 1998 :

       - the establishment of a European numbering space for pan-European
services provision;

**38**

            - the creation of an open and integrated numbering scheme for Europe
which allows (pan-European) intelligent network services, mobile and
personal telecommunications services and other services to migrate into
this new scheme.

As an immediate priority, current activities aimed at the reform of national
numbering plans should take account of the requirement for convergence.
Also, national regulatory authorities should ensure the timely availability of
new number blocks for new market entrants, with numbers of "equal quality"
to those of other market players.

VI .4 THE INTERNATIONAL AGENDA

_VI._ _4.1_ _Third country access_

A major focus for the Community for achieving markel: access in third
countries will be the GATT forum (shortly to become the **WTO,** World
Trade Organisation). The telecommunications sector, and the mobile sector
in particular are directly concerned with- GATT rules to be developed during
negotiations on basic telecommunications over the next two years.

_**\**_
These negotiations should not only result in an exchange of commitments on
market access, but should also help set the ground-rules for the future.
Among the issues covered would be clarification as to how the GATTAVTO
principles apply in particular situations such as mobile communications
where access to frequencies may be limited, and in global personal
communications which have global regulatory implications.

International aspects of frequency allocation in the ITU, and the issue of
mutual recognition of type approval on a world-wide scale will also require
urgent attention.

On a bilateral level, common Community positions will be needed with
regard to obtaining comparable and effective market access to specific thirdcountry markets.

Common Community positions will also have to be developed on issues
having a direct impact on trade and exports in this field. Comments have
confirmed that this concerns issues related particularly to the effective
enforcement of intellectual property rights, as well as to restrictions on
exports of encryption techniques and other sensitive technologies.

_VI._ _4.2_ _International_ _co-ordination_ _on evolution towards UMTS_

International co-ordination vill be a major aspect of the future evolution
tu*vards UM i S (see below), ihe mam forum lor such co-ordination will be
the ITU-work on standardisation of the Future Public Land Mobile

Telecommunications System (FPLMTS)

Ad-.-'tio " the evolution towards UMT S is .o-ordinated between the

##### V. .lied States, Jap««. and Europe in a platihnu known as FAMOUS (Future

Advanced Mobile/Wireless Universal System). Th? European delegation to
FAMOUS h comprised of veprsser-tarives from the Commission, the
Telecommunications Equipment Manufacturers Association (ECTEL) and
ETSI.

**39**

The main objectives of FAMOUS are to continue to seek collaborative
approaches to the exchange of ideas in order to address the emerging needs
of third-generation wireless communications systems and services, on a
world-wide basis; to establish a broad common understanding of the
requirements with a view to introducing these into the standardisation
process; to pursue discussions concerning possible international roaming
options, and to maximise international co-operation for interoperability on a
global basis of such systems.

Information obtained through FAMOUS will be fed into the Union's research
programmes in this area (see below).

_VI._ _4.3_ _The_ _role of personal communications_ _in_ _Information Highways_

The report on Europe and the Global Information Society and the subsequent
Commission Action Plan of 19th July 1994 has emphasised the importance
of mobile communications as a major element in building the information
highway.

The Commission will pay due attention to this aspect in further planning
towards the information highway both at the European and global levels.

VI.5 SAFEGUARDING THE PUBLIC INTEREST

_VI._ _5.1_ _Development of a global Action Programme for Health_ _and_ _Safety_ _in the_
_mobile sector_

Increasing acceptance by the general public of the use of radio frequencies
as a means of communicating is the basis for the whole: mobile industry.
Therefore, concerns regarding hazards caused by the use of radio
frequencies must be considered and taken _into_ account. Comments on the
Green Paper have confirmed that such concerns centre on two major areas;
the potential hazards caused to human |iealth on the one hand, and the
potential for electromagnetic interference with other electronic equipment
such as pace-makers and hearing aids, on the other.

There was broad support for the setting up of a comprehensive action
programme to assess the impact of radio frequency radiation on human
health and safety and to accelerate the development of the necessary safety
standards.

The Commission will make proposals for initiating such a programme before
1st January 1996.

_VI._ _5.2_ _On-going assessment of the environmental impact of the development_ _of_
_mobile and personal communications_ _**mnhila**_ _**rind**_ _**nerinnnl**_ _**rnmrriiiyiimti/^tiv**_

There was general agreement on tlie need for an ongoing assessment of the
environmental impact of mobile and personal communications. In
particular, the sharing of sites will reduce the impact on tlie environment by
preventing, wherever possible, the unnecessary proliferation of radio masts
and related facilities.

**40**

Guidelines for sharing agreements, in conformity with Treaty competition
rules, should be worked out before 1st January 1998.

_VI._ _5.3_ _On-going monitoring of employment trends and training needs in the_
_communications sector_

In the context of the consultation, trade unions have stressed the need to
examine the impact of u>e new technological developments on employment in
the telecommunications sector.

In order to satisfy the increasing demand for mobile services, operators are
establishing more cell sites to improve coverage, they are opening more
service centres to take customer orders, and they are creating more
distribution channels to sell services and equipment. All such efforts
translate into a continuing and growing industry requirement for skilled
workers. It is expected that as a result of this activity, employment in the
public cellular telephony business will grow at a rate of 10 to 20 percent per

year.

The on-going monitoring of employment trends, and the associated training
needs in the mobile communications sector will be accorded high priority.

_VI._ _5.4_ _Data protection and privacy_

The future development of mobile and personal communications raises
important questions of the protection of privacy with regard to the
processing of personal data. The concepts of person to person calling,
unique numbers for individuals and personalised cards need to be carefully
examined from this point of view in order to take into account concerns such
as those which have already been raised on line identification. This is
addressed in the amended proposal for a Directive on the protection of
personal data and privacy in the digital telecommunications networks^ 1. In
addition it is expected that the Council will adopt a common position on the
framework directive on data protection before the end of the year^^.

The Commission will prepare a report examining the need for further
measures concerning the protection of personal data before the 1st January
1996.

41 Amended proposal for a European Parliament and Council Directive concerning the protection of personal data
and privacy in the context of digital telecommunications networks, in particular the Integrated Services Digital
Networks (ISDN) and digital mobile networks, COM(94) 128 final, OJ C288, 13.6.94

42 Amended proposal for a Council Directive on the protection of individuals with regard to the processing of
personal data and on the free movement of such data, COM(92) 422 final, 15.10.92

**41**

VI.6 UNIVERSAL MOBILE TELECOMMUNICATIONS SERVICES

_VI._ _6._ _J_ _Continued support for Community research programmes into advanced_
_mobile communications and telematics_

The new programme for research and technological development in the field
of advanced communications technologies and services was adopted by the
Council Decision of 27 July 1994 [43] .

The global objective of the programme is to develop advanced
communications systems and services for economic development and social
cohesion in Europe, taking account of the rapid evolution in technologies, the
changing regulatory situation and opportunities for development of advanced
trans-European networks and services.

One of the main areas for technological development is that of mobile and
personal communication networks. The objective is to accommodate the
demand for personal communications beyond 2000 and to permit European
industry to retain its leadership role in this area. Emphasis will be placed on
miniaturisation, broadband radio technologies, advanced electrical/optical
technologies, novel multiple access techniques, as well as the integration of
satellite and terrestrial networks

_VI._ _6.2_ _Support for the work of the ETSI Special Mobile Group and promotion of a_
_UMTS_ _MoU_

ETSI and in particular its SMG (Special Mobile Group) Technical
Committee will continue to be a key player in the development of the GSM
system family and third-generation technologies.

ETSI SMG is at present concentrating its work on extending GSM with new
features (Phase 2, Phase 2+, Half-rate codec). It is expected that the
emphasis of the Group will gradually move towards UMTS.

In order to secure such a smooth transition, the approach towards UMTS
technology is expected to be built on an upgrade of the current GSM system
family to include new functionality and extended broadband service
capabilities. Such an approach seems to give the best guarantees that the
present success of GSM can be carried over into the next generation UMTS,
with consequential benefits for the sector employment and the European

economy.

The future development of UMTS will require a common vision of all sector
players. The Commission will therefore, in accordance with the emphasis on
partnerships with the sector given in its 19 July 1994 Action Plan for the
information society, support the setting up, prior to 1st January 1998, of a
Memorandum of Understanding for the development of UMTS drawing on
the experience of the GSM MoU and building on national initiatives
currently under way in this field.

Council Decision ol" 27 July 1994, adopting a specific programme for research and technological development,

including demonstration, in the field of advanced communication technologies and services (1994-1998),

(94/572/EC).

**42**

_VI._ _6.3_ _Investigation of potential of satellite-based UMTS_

Future personal communication services will make use of a mix of terrestrial
technologies such as the GSM system family and DECT, as well as satellitebased systems. By integration of the various systems into a common
environment, users will be offered seamless services that can be accessed on
a global scale.

Currently, Europe is the leading player in the area of digital mobile and
personal communications technology. Systems such as GSM and DCS
1800/1900 are, or are poised to become world standards for terrestrial-based
systems.

The complementary nature of terrestrial and satellite-based systems makes a
combined system concept highly attractive where strong mutual benefits can
be derived. Hence the importance of investigating the development of a
satellite component for the future UMTS as a prerequisite for continuing the
success of the current terrestrial digital systems into the next generation of
mobile and personal communications networks.

A major condition will be a strong European presence in satellite-based
personal communications systems, based on the early allocation of European
licences for such svstems.

**43**

VU CONCLUSIONS AND TIMETABLE FOR ACTION

The mobile and personal communications sector is currently in a critical phase of its
development. In order to secure further development and to reap the full benefits of its
potential, a coherent and stable regulatory framework for the sector is required. This
Communication sets the priorities for actions aimed at establishing such a framework, the
main elements of which are shown in the Timetable for Action (TABLE 1) below.

The report on Europe and the global Information Society, and the Commission's
Communication of 19th July 1994, have emphasised the importance of mobile and personal
communications as a major building block for the future information environment. As such
the Green Paper on mobile and personal communications, and the subsequent consultation,
represent a first key step in the process of preparing for the full liberalisation of
telecommunications markets in the EU from 1st January 1998.

The Commission has published tlie Green Paper as a consultative document with the
intention to seek the views of all interested parties in the sector, as well as of the European
Parliament and Council, the Economic and Social Committee, and the Committee of Regions.
A broad consultation has taken place including public hearings whilst a substantial number
of written contributions have been received. On the basis of this consultation, the
Commission has drafted this Communication to the European Parliament and the Council
and has prepared the attached Proposal for a Council Resolution.

In the light of the above, the Commission asks the European Parliament and the Council to
endorse this Communication and urges the Council to adopt the attached Resolution.

**44**

T A B L E l : TIMETABLE FOR ACTIONS DESCRIBED IN SECTION VI ABOVE

Prior to 1st January 1996

Competition. Full application of the Treaty competition rules and, where
required, amendment of Directive 90/388/EEC in order to achieve the
objective of removal of all exclusive and special rights in the sector (VI. 1.1)

Code of Conduct Development of a Code of Conduct for Service Providers
(VU.2)

DECT. Facilitating access to DECT and combined use of DECT with
other technologies, in particular GSM/DCS 1800 (VI. 1.5)

Support Programmes. Establishment of programmes for promoting
TFTS, ERMES, TETRA, and DSRR market introduction (VI. 1.8)

Satellite-PCS. Agreeing procedures for licensing of satellite-based personal
communications at Union level and starting licensing procedures (VI. 1.10)

Consultation. Promotion of the creation of a European Mobile and Personal
Communications Services Forum (VI. 1.11)

Alternative Infrastructure. Lifting constraints on alternative
telecommunications and cable TV infrastructure for the provision of mobile
communications, based on a general approach to infrastructure regulation
(VI.2.1)

ONP, Interconnection and the Competition Rules. Adjustment of the
Open Network Provision framework _i_ .id proposal for an ONP Interconnection
Directive in the context of general telecommunications reform; scrutiny of
interconnection agreements under the Trea'y competition mles (VI.2.2)

Mutual Recognition. Amendment of Directive 91/263/EEC concerning
muiual recognition of type approval of mobile equipment (VI. 2.3)

Directives pending. Adoption of pending Directives (mutual recognition of
satellite "licenses and data protection and privacy) (VI.2.4/5)

Frequencies. Adoption of ERC Decision, on frequency bands for TETRA,
DCS 1800 and satellite based personal co nmunications, including Low Earth
Urbit satellite systems, (LEOs) (VI.3.2)

Numbering. Opening up of a European Numbering Space foi freephone
services (VI.3.3)

Standardisation. Establishment of standardisation mandate- (VI 3.7)

Fraud. Monitoring the fraudulent use of mobile services and equipment
and examining action where required (V 1.9)

third Country Markets. Ensuring international co-ordination and working
towards furthering of equivalent accès* to third country markets (VI.4.1)

Health & Safety. Development of a global action programme for health
^ind safety in the mobile sector (VI.5.1)

Employment & Training. Monitoring ot employment trends and re-training
needs (VÏ.5.3)

**45**

Prior to 1st January 1998

Service Provider Access. Review of the situation concerning access to the
market by service providers (VI. 1.3)

DCS 1800 Licences. Ensuring access to DCS 1800 and GSM extension
bands in all Member States (VI. 1.4)

Mobile Service Combinations. Allowing, in a first phase, full combination of
different mobile technologies including the components of the GSM system
family (GSM / DCS 1800) and ending any remaining restrictions (VI. 1.6)

Fixed and Mobile Service Combinations. Allowing, in a second phase, full
combination of fixed and mobile services in accordance with the schedule for

full liberalisation of public voice services with additional transition periods for
certain Member States, as established in Council Resolution 93/C213/01
(VI. 1.7)

UMTS Frequencies. Adoption of an ERC Decision on the frequency
bands for UMTS (VI.3.2)

Numbering Space. Creation of a European Numbering Space for panEuropean service provision, including Personal Communications requirements
(VI. 3.3)

Environment, h rastructure Sharing. Setting the general guidelines (VI.5.2)

UMTS MoU. Conrinuing support for work towards the Universal Mobile
Telecommunications System (UMTS) and promotion of the creation of a UMTS
Memorandum of Understanding including all actors concerned (VI.6.2)

ANNEX 1

BRIEF OUTLINE OF THE

GREEN PAPER ON MOBILE AND PERSONAL COMMUNICATIONS

The Green Paper entitled "Towards the Personal Communications Environment : Green Paper on a
common approach in the field of mobile and personal communications in the European Union
(COM(94)145, 27th April 1994) provides an extensive analysis of the sector and sets forth a
coherent set of positions for the future development of the sector.

Five major changes are proposed to remove the barriers to further development,

1. Abolishing remaining exclusive and special rights in the sector, subject where required to the
establishment of appropriate licensing conditions ;

2 Removal of all restrictions on the provision of mobile services both for independent Service
Providers and direct service provision by mobile network operators.

This should include the freedom to offer a combination of services provided under different
licences, as well as the ability to provide services in different Member States, and the lifting of
existing restrictions, thereby facilitating access of users to these services ;

3 Full freedom for mobile network operators to operate and develop their networks for the
purpose of the activities provided for in their licence or authorisation.

This should include the right to self-provide infrastructure for use in carrying out these
activities or to use third party infrastructure for that purpose, as well as the right to share
mfrastructuie ;

4. Unrestricted combined offering of services via the fixed and mobile networks, within the
overall time schedule set by Council Resolution 93/C213/01 of 22nd July 1993 for the full
liberalisation of public voice services via the fixed network.

This would imply the right for mobile operators or independent Service Providers to bid for
resale licenses on the fixed network, as well as for the lifting of all existing entry restrictions
for fixed network operators in mobile markets, subject only to full application of the Treaty
competition rules, in particular, Council Regulation 89/4064/EEC on the control of
concentrations and the provisions of the Treaty competition rules concerning abuse of
dominant positions ;

5. Facilitating pan-European operation and service provision.

This should include further development of mutual recognition of type approval of mobile
terminal equipment, as well as coordination of licensing and award procedures, where
appropriate to facilitate development of trans-European networks.

Based on these major changes proposed, the Green Paper sets forth detailed positions on

-• Licensing conditions for mobile network operators ;

-» Service provision ;

-* Interconnection ;

**47**

-• Infrastructure,

-> Radio frequencies ;

-» Numbering ;

-> Launching the evolution towards personal communications services.

The Green Paper proposes measures required for implementation concerning :

-> Introduction of competition ;

-» Adjustment of the Open Network Provision framework ;

-> Mutual recognition of type approval of mobile equipment ;

-» Mutual recognition of licences ;

_->_ Establishment of a Europe-wide Code of Conduct for service providers :

_->_ Framework for the co-ordination of radio frequencies ;

-> Framework for the co-ordination in the field of numbering ;

-* Protection of personal data and privacy in the context of digital mobile communications
networks.

The Green Paper further submits a set of accompanying lines of actions to comment :

-+ Ensuring safety and safeguarding environmental concerns in the future mobile and personal
communications environment ;

-> Promoting standardisation to ensure interconnection and interoperability ;

-> Setting priorities for frequency co-ordination related to mobile and personal communications

-• Initiating co-ordination of numbenng and working towards a European numbering space for
personal communications,

-> Facilitating the development of trans-European networks based on mobile and personal
communications technologies ;

-> Elaborating common Community positions with regard to Third Countries and ensuring
market access to those countries ;

-* Continuing support for the evolution towards the Universal Mobile Telecommunications
Svstem

**48**

##### ANNEX 2

**LIST OF CONTRIBUTORS TO THE CONSULTATION ON THE**
**1994 GREEN PAPER ON MOBILE AND** **PERSONAL** **COMMUNICATIONS**

**HEARINGS**

General Consultation Meeting. 16th & 17th June 1994, approximately 210 participants

Round Table for the Chairman of Fixed and Mobile Network Operators. 28th June 1994, 67
participants

Meeting with Service Providers. 28th July 1994, 26 participants

Meeting with GSM MoU. 29th July 1994

Meeting with Consumer Organisations, 1st September 1994

Meeting with Trade Unions. 21st September 1994

**WRITTEN CONTRIBUTIONS**

Associations

Bedrijfstelecommunicatie Grootgebruikers
Bureau Européen des Unions de Consommateurs
CEPT/ERC

CEPT/ECTRA/ERC

Club Informatique des Grandes Entreprises Françaises
Conseil National du Patronat Français

EC Committee of the American Chamber of Commerce

ECTEL .

ERMES MoU

ETNO

Eurocontrol

European Council of Telecommunications Users Association (ECTUA)
European Data Protection Commissioners
Federation of the Electronics Industry (FEI)
German MoU on Personal communications

GSM MoU

International Chamber of Commerce

Internationale du Personnel des Postes, Télégraphes et Telephones
Joint Committee of Telecommunications

LMT - Norwegian Suppliers Association
Matkaviestintooimittajat
Syndicat des industries de matériel professionel électronique et radioélectrique (SPER)

UNICE

**49**

Individual Organisations

Airtouch International

Alcatel

Allgon AB
AT&T

ATC Finland

Austrian Postal Administration

Belgacom

British Telecom

Bundesministerium fur Post- und Telekommunikation

Cellcom

Ccllnet

CommEd Ltd

Department of Trade and Industry
Deutsche Bundespost Telekom

E-Plus Mobilfunk

Ericsson International

France Telecom

Gesellschaft fur Datenfunk mbH

Hoskyns Group pic

Instituto das Comunicaçôes de Portugal (ICP)
Makitorppa

Mannesmann Mobilfunk

Media & Technology International
Mercury Communications

Mercury one2one
Ministry of Transport and Communications Finland
Mobile Systems International

Mobile Tele Leverantorerna

Motorola

Nokia

Omnitel Pronto Italia

Orange Personal Communications

OTE

Portugal Telecom
Post & Telestyrelsen

PTT Telecom Netherlands

Raad voor Verkeer en Waterstaat

Société F-rançaise du Radiotéléphone (SFR)
Shell International Petroleum Maatschappij B.V.

Sistelcom

STET

Swissphone Telecommunications
Talkland International (UK) Ltd

Telecel

Telecom Eireann

Telecom Finland

Telefonica

Telia

Uniqueair
Vodafone Group pic

Vodafone S.A.

**50**

##### **ANNEX 3** **LIST OF ACRONYMS**

CEPT European Conference of Postal and Telecommunications Administrations
CT2 Standard for Cellular Telephony
CTR Common Technical Regulation
DCS-1800 Digital Communication Standard for Cellular Communications
DECT Digital European Cordless Telecommunications
DSRR Digital Short Range Radio
ECTEL Telecommunications Equipment Manufacturers Association
ECTRA European Committee for Telecommunications Regulatory Affairs
EIR Equipment Identification Register
EN F European Numbering Forum
ERC European Radiocommunications Committee
ERMES European Radio Messagmg System
ERO European Radiocommunications Office
ETO European Telecommunications Office
ETS European Telecommunications Standard
ETSI European Telecommunications Standards Institute
FAMOUS Future Advanced Mobile Wireless Universal System
FPLMTS Future Public Land Mobile Telecommunications System
GSM Global System for Mobile
IN Intelligent Network
ISDN Integrated Services Digital Networks

ITU International Telecommunications Union

LAN Local Area Network

LEOs Low Earth Orbit Satellite

NRA National Regulator}'Authority
ONP Open Network Provision
PBX Private Branch Exchange

PCS Personal Communications Services

PMR Private Mobile Radio

PSN Physical Serial Numbers

SIM Subscrioer Identification Module

SMG Special Mobile Group
SNG Satellite News Gathering
TBR Technical Basis for Regulation
TETRA Trans European Trunked Radio
TFTS Terrestrial Flight Telephone System
TO Telecommunications Organisation
UMTS - Universal Mobile Telecommunications Systems
VSAT Very Small Aperture Terminal

WARC World Administrative Radio Conference

**51**

**Proposal**
**for** **a** **Council** **Resolution of []**
**on the further d e v e l o p m e n t of**
**mobile** **and personal** **c o m m u n i c a t i o n s**

**in the European** **Union**

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Whereas, as a result of the 1992 review of the telecommunications sector, the Council, in its

Resolution of 22 July 1993, called on the Commission to publish a Green Paper on mobile and

personal communications [44] :

Whereas on 27 April 1994 the Commission adopted its Green Paper on a common approach in the

field of mobile and personal communications [45] ;

Whereas, on the basis of the wide-ranging consultation, the Commission has submitted a

Communication to the European Parliament and Council on the outcome of the consultation on the

Green Paper on mobile and personal communications,

WELCOMES the broad consultation carried out by the Commission on the main principles and

objectives of the Green Paper on Mobile and Personal Communications and NOTES the consensus

resulting from it, as well as those areas where a full consensus was not achieved.

SUPPORTS the development of a framework for Mobile and Personal Communications both

through sector specific action and through action in the context of the overall reform of the

telecommunications sector.

Council Resolution of 22nd July 1993 on the review of ihe situation in the telecommunications sector and the
need for further development in that market (93/C 213/01, OJ C 213, 6.8.1993)

**4S**

Towards the Personal Communications Environment : Green Paper on a Common Approach in tlie field of
mobile and personal communications in tlie European Union (COM(94)145 final, 27.04.1994)

**52**

CONSIDERS AS PRIORITIES FOR SECTOR SPECIFIC ACTION measures which at a Union

level seek to ensure :

1 the introduction of competition where this is still not the case, with the number of mobile

licenses granted to be limited only on the grounds of essential requirements and public

service requirements in the form of trade regulations;

2. service provider access to the market and promote the development of a Code of Conduct for

service providers, with special regard to the protection of consumer interests;

3. the timely access to DECT and DCS 1800 frequencies and the rapid availability of adequate

frequency spectrum on a pan-European basis to support the development of existing and new

mobile technologies and systems, such as TETRA, ERMES, DCS 1800 and satellite-based

personal communications services, as well as the removal of restrictions on the innovative

combination of different mobile technologies ;

4. that the full combination of fixed and mobile services be allowed in accordance with the

schedule for the full liberalisation of public voice services with additional transition periods

for certain Member States, as established in Council Resolution 93/C213/01, in order to

allow full-scale development of personal communications services

5 that a harmonised licensing approach for satellite-based personal communications is

established and that procedures for licensing such systems at the Union level be iniatiated at

an early stage;

CONSIDERS AS AREAS FOR PRIORITY ACTION FOR MOBILE AND PERSONAL

COMMUNICATIONS WITHIN THE FRAMEWORK OF THE GENERAL REFORM OF

TELECOMMUNICATIONS:

1 examining constraints on alternative telecommunications and cable-TV infrastructure for the

provision of mobile communications, in the context of the general approach to infrastructure

regulation, with the aim of lifting such constraints

2 the development of the regulatory regime for interconnection based on the Treaty competition

rules upon the ONP framework, modified in line with Council Resolution 93/C213/01, and

the EU competition rules, giving priority to commercial agreement between parties under the

supervision of regulatory authorities and strict scrutiny under Treaty competition rules;

**53**

3. the putting in place of an appropriate regulatory framework for the mobile sector, based on

current legislative proposals and adopted directives, in relation to data protection and

privacy, the mutual recognition of licensing and the mutual recognition of type approval for

terminal equipment;

NOTES THE NEED FOR ADDITIONAL ACTION in order to develop the overall regulatory and

technological environment

1. Establishing clear schedules for standardisation, numbering and frequencies, together with

timetables for binding decisions on implementation by the Member States, as well as for

agreement on the establishment of a European numbering space taking account of

requirements for mobile and personal communications such as for portable numbers;

2. In order to maintain public confidence in the development of mobile communications, an

action programme should be set up to address a range of areas linked to the public interest,

namely to:

assess the impact of radie Frequency radiation on human health and safety and to

accelerate the development of necessary safety standards;

examine the impact on employment and re-training requirements in the sector;

study issues relating to fraudulent use of mobile services and equipment, as well as

other issues of consumer protection; to propose appropriate measures where required at

the Union level; and to monitor developments on tariffs and tariff structures (versus

cost-oriented pricing), including subscription fees and equipment prices, in order to

protect the economic interests of consumers ;

3. ensure that the necessary measures are taken to secure the success of future European

systems and standards in emerging world markets for mobile and personal communications,

with particular attention on the role of the future Universal Mobile Telecommunications

System (UMTS)

EMPHASISES the importance of comparable and effective access to third country markets and of

full recourse to international standards where possible, to be achieved by bilateral and multilateral

negotiations conducted at the European Union level, with regard to mobile and personal

communications technologies, equipments and services.

**54**

SUPPORTS the creation of a European Mobile and Personal Communications Services Forum

NOTES the proposals and timetable of the Commission in its Communication and

ENCOURAGES the Commission to prepare the necessary measures and, where appropriate, to

pursue agreements and firm implementation decisions, in co-operation with the relèvent European

bodies in the areas of frequency, numbering, licensing and standardisation.

REQUESTS THE COMMISSION TO REPORT TO THE COUNCIL AND THE

PARLIAMENT

on the progress made with regard to the implementation and effects of the above measures, by 1st

Januar>' 1996.

**55**

##### ISSN 0254-1475

## COM(94) 492 final

# **DOCUMENTS**

## EN 15 Catalogue number : CB-CO-94-564-EN-C ISBN 92-77-82890-0

##### Office for Official Publications of the European Corjcaimiiities L-2985 Luxembourg