Source: EURLEX
Language: en
Format: md

No C 44 / 4 EN Official Journal of the European Communities 12 . 2 . 97

Notice pursuant to Article 19 ( 3 ) of Council Regulation No 17 (') and Article 3 of Protocol 21
of the EEA Agreement concerning a request for negative clearance or an exemption pursuant to

Article 85 ( 3 ) of the EC Treaty and Article 53 ( 3 ) of the EEA Agreement

( Case No IV / 35.738 — Uniworld )

( 97 / C 44 / 04 )

( Text with EEA relevance )

A. INTRODUCTION 2 . AT&T is a telecommunications operator in the
United States providing a broad range of US and inter ­
national telecommunications services and infrastructures
to and from the US . AT&T announced in September

On 29 September 1995 the Commission received a
notification of a joint venture pursuant to Article 4 of
Council Regulation No 17 formed by Unisource
Pan-European Services BV, a subsidiary of Unisource
NV, and AT&T Pan-European Services, Inc . ( 2 ), a
subsidiary of AT&T Corp. under the name ' Uniworld '.

As further described below, Uniworld ( now AT&T —
Unisource Communication Services ) has been created to
provide pan-European telecommunications services with
global connectivity to the European business market .

The present case is inextricably linked to the Unisource
— Telefónica case ( Case No IV / 35.830 ). An Article 19

( 3 ) notice in that case has been published in this same
issue of the Official Journal of the European Communities .

1995 a restructure pursuant to which its services,
equipment and computer business will, by the end of

1996, become wholly separated businesses with no
common management . AT&T Corp. retains the
communications and information services business . Its

turnover in 1995 was US $ 47 billion .

On 9 May 1996, the Federal Communications
Commission ( FCC ) of the US adopted an order
declaring AT&T a non-dominant carrier for inter ­
national voice services ( 3 ).

Direct revenues in 1995 of AT&T in the EEA and Swit ­
zerland were as follows : AT&T Easylink ( messaging )

[...]; AT&T Istel ( corporate services ) [. . .] and Business
Communications Europe ( hereinafter, BCS-E ) [. . .1 .

C. CONTRIBUTIONS BY PARENT COMPANIES TO
B. THE PARENT COMPANIES
UNIWORLD

1 . Unisource NV is a joint venture company the
shareholders of which are Telia AB, PTT Telecom BV,
Swiss Telecom and Telefónica de Espana SA . Unisource
NV ( hereinafter, Unisource ) is a holding company active
in the telecommunications sector that incorporates seven
operating subsidiaries . Total turnover of the group in

1994 was Fl 933 million ( ECU 443 million ). Net result
was losses of Fl 41,072 million ( ECU 20 million ). The
activities of the Unisource Group can be split in three
main areas : business services, personal services and
network services . A detailed description of the services
currently provided by Unisource through its subsidiaries
can be found in the Article 19 ( 3 ) notice in the
Unisource — Telefónica case ( IV / 35.830 ).

O OJ No 13, 21 . 2 . 1962, p . 204 / 62 .
( 2 ) Unisource Pan-European Services and AT&T Pan-European

Services have been created as special subsidiaries to hold the
respective interests of the parent companies in Uniworld
VOF .

Unisource will contribute to Uniworld the following
companies or the relevant international assets thereof :
certain of the Unisource Business Networks ( UBN )
companies, Unisource Voice Services ( UVS ), Unisource
France SA, Unisource USA Inc, Unisource Business
Services Inc . and Unisource WPC Inc .

AT&T will contribute the relevant assets of the following
entities : AT&T Europe SA, most of AT&T Istel Ltd,
BCS-E and the AT&T companies in the Member States .

After the Uniworld transaction, AT&T will still provide

in the EEA and Switzerland, under its own name,
the following services : new high value-added

( 3 ) By order released on 23 October 1995, the FCC reclassified

AT&T as a non-dominant carrier in the market for
interstate ( US domestic ) telecommunications services .

## 12 . 2 . 97 EN Official Journal of the European Communities No C 44 / 5

applications ( such as AT&T network notes ), consumer
cards and calling cards services, outsourcing ( AT&T
solutions ) and the full range of voice telephony services
to business and consumer customers in the UK — by
means of AT&T Communications UK 's operating
licence, which permits also international simple resale to
the US .

D. THE JOINT VENTURE : UNIWORLD

1 . Structure of Uniworld

Uniworld consists of two companies : Uniworld VOF and
Uniworld NV .

( a ) Uniworld VOF is a general partnership under Dutch

law . Unisource, through Unisource Pan-European
Services, has a 59,94 % shareholding interest in it,
AT&T, through AT&T Pan-European Services, a

39,96 %, and Uniworld NV the remaining 0,1 % .
Uniworld VOF is not a separate legal person distinct
from its owners . In addition it is tax transparent so
the income flows through directly to the parents .
Uniworld VOF will actually provide the telecom ­
munications services within the business scope of
Uniworld .

The Uniworld NV 's supervisory board and CEO will
be directly responsible for the partnership .

( b ) Uniworld NV has been created to supervise and act

as general partner of Uniworld VOF . Thus it is the
only partner that governs and can bind the part ­
nership and has legal title to all tangible and
intangible assets which it will hold for the benefit of
Uniworld VOF . It also has the authority to manage
the day-to-day operation and affairs of the part ­
nership and has all of the resources necessary to
manage and operate the business activities of
Uniworld VOF . Unisource, through Unisource
Pan-European Services, has a 60 % shareholding
interest in Uniworld NV, whereas AT&T, through
AT&T Pan-European Services, owns the other
40 % . According to the Parties, Uniworld NV,
although jointly owned is not a joint venture in itself
as it will not conduct any business for its own
account . Uniworld NV will earn an annual
management fee for its activities as general partner
of the partnership .

Uniworld NV is governed by a management board
of one chief executive officer nominated by
Unisource ( AT&T nominates the chief operating
officer ), responsible for managing the company, and
a supervisory board of five directors, three
nominated by Unisource and two by AT&T . The

supervisory board approves the budget and business
plan by supermajority ( i.e. unanimity of directors
present or represented ). AT&T has been granted
veto rights in respect of all significant matters .

2 . Strategic advisory boards

Upon its incorporation, Uniworld will create three
strategic advisory boards to deal with the following

matters :

( a ) service portfolio development and offerings ;

( b ) marketing and sales ( the international sales board
responsible for the global account management
plan ); and

( c ) architecture and technology .

All participants to the Uniworld transaction, including
representatives of the Unisource shareholders will be
represented in the boards .

The boards are resources for achieving consistency in

approach to an issue, as well as working committees to
help make decision-making processes efficient . They are
also a forum to solve disputes between the parents that
might have an impact on Uniworld . Uniworld can use
them to forge a consensus for Uniworld 's initiatives in
advance of supervisory board consideration . Originally,
recommendations were binding on all participants .
However, after the Commission objected to that, the
Parties modified that provision so that recommendations
shall not be binding on the participants and their
pertinent affiliated companies ( see later ).

Information to be exchanged by participants to the
boards will neither include actual retail prices of
Uniworld end-user services, nor information relating to
commercial conditions of products and services outside
the business scope of Uniworld as notified . In addition,
market trends in pricing will only be discussed in general
terms without disclosing sensitive customer pricing
information .

3 . Business scope

The scope of Uniworld 's business will be the provision of
seamless ( 4 ) multilateral ( 5 ) pan-European telecommuni ­
cations services with global connectivity to the European

( 4 ) Seamlessness is defined as a cohesive and homogenous
approach to the service from a user 's perspective . So, the
customer does not see the underlying complexities of
providing the service .
( 5 ) The term ' multilateral ' encompasses foreign-to-foreign as
well as home-to / from-foreign traffic . Bilateral services are
not able to encompass foreign-to-foreign traffic .

No C 44 / 6 ΓΕΝ Official Journal of the European Communities 12 . 2 . 97

# business market . The Parties have identified [. . .] global Uniworld is expected to have around [] employees .

and European multinationals with international telecom ­
munications expenditure greater than [. . .] a year as the
target market for Uniworld . Of these, it will focus on the Although Uniworld is responsible for its own product

[. . .] biggest corporations having at least an office in the

development, it will not conduct its own basic research

EEA plus Switzerland ( such focus does not preclude the

activities . It will have access to research capabilities of

offering similar needs of Uniworld ). services to any other customer with AT&T intellectual, Unisource property and arrangements the Unisource to be shareholders agreed, the prin via ­

ciples of which have been notified .

Global connectivity outside the EEA and Switzerland ( 6 )
will be mainly achieved through Uniworld 's participation
in the WorldPartners Company and Association ( 7 ). In
this respect, Unisource will transfer to Uniworld its
rights in the WorldPartners Company and Association
and AT&T UK will do the same with its rights in the
WorldPartners Association . As a result Uniworld will

become the exclusive distributor in the EEA plus Swit ­
zerland of the telecommunication services bearing the
WorldSource trade mark ( 8 ).

Uniworld will own and / or manage all frame relay,
messaging, X.25 international backbone, X.25 domestic
switches with exclusive or predominantly international
usage, non-home country X.25 networks and managed
bandwidth assets . Asset selection will be made according
to a set of rules agreed upon by the parties in accordance
with the given principles for asset selection .

In addition, the existing backbone data network —
Unidata — that links together the domestic data
networks of the shareholders of Unisource will also be
In accordance with the initial business plan for assigned to Uniworld .
Uniworld, revenues would amount to [. . .] in 1996 . They
are expected to grow to [. . .] by 2005 . Break-even is
expected to be achieved by 1999 ( 1998 for data ).

4 . Telecommunications services to be provided by
The Parties aim at Uniworld achieving market shares of Uniworld

[. . .] in voice IVPN and [. . .] in data services by 2005, in
the EEA plus Switzerland .

Uniworld 's services are based on end-to-end control by
Uniworld of the services to customers including the
national extensions of such services . However, Uniworld
will not offer purely domestic services ( 9 ).

( 6 ) In areas outside Europe or the WorldPartners Association,

the bilateral agreements of the Unisource shareholders, of
Unisource and / or AT&T will be used to extend global
connectivity . In the future, Uniworld could have its own
bilateral arrangements . In addition, Unisource has recently
announced a non-exclusive agreement with Infonet ( which is
56 % controlled by the Unisource shareholders ) regarding
the provision by Infonet of X.25 connectivity outside
Europe . X.25 is not offered within the WorldPartners
framework .

( 7 ) WorldPartners is a limited partnership promoted by AT&T

basically to set performance standards, agreed and respected
by the members of the partnership, in respect of given tele ­
communications services . Such standards are a way to
extend connectivity for those services outside the borders of
each of its members . Members of the WorldPartners
Company have invested in it and participate, among other
things, in the definition of the standards . Members of the
WorldPartners Association are distributors of the services in
given territories . The agreements regarding Unisource and
AT&T UK 's entry into WorldPartners have been separately
notified to the Commission ( Case No IV / 35.490 — World ­
Partners ).
(") The WorldPartners portfolio of WorldSource services is
limited to the offering of virtual network services ( VNS ),
frame relay and private lines . For each of these, a common
denominator of features is defined . Such common
denominator would be provided by each WorldPartner 's
member or associate . Services complying with the common
denominator can bear the WorldSource trademark .

The services will initially include international virtual
private network ( IVPN ) voice services, packet-switched,
frame relay and other data networks and services,
messaging and network related outsourcing . The home
countries, France, Germany, the United Kingdom,
Belgium and Italy represent primary target countries .

— As regards voice IVPN services, an IVPN service

( Uniworld VNS ), made of different packages with
different features, will be offered to customers to
cover their intra-European needs ( 10 ). The backbone
network ( basic transmission capacity ) to be used will

(') In this respect, according to the parties, a customer
receiving international and national services from a
distributor of Uniworld, will clearly perceive that he is
receiving two different kinds of services .
( 10 ) Such service is basically the same Phase II service jointly

developed by Unisource and AT&T in the framework of
the EVUA bid .

12 . 2 . 97 LEN ] Official Journal of the European Communities No C 44 / 7

be that of UCS and, in some cases, that of
third-party suppliers . The Uniworld VNS (") service
is defined as ' multilateral ', as opposed to the existing
IVPN services of the Unisource shareholders that are

available abroad depending on bilateral agreements
concluded by each telecommunications operator
( TO ),

services ( 13 ) like video-conferencing, fixed-mobile
integration, teleworking, bandwidth on demand and
call centres including automatic re-routing on real
time ( 14 ), and remote network management for
customer 's data networks,

— the domestic data services and networks in the home

countries and the UK will not be contributed to

Uniworld but will remain in Unisource and AT&T
UK respectively . The respective Unisource share ­
holder will act as distributor of Unisource for these
domestic products in each home country,

— messaging covers electronic mail and EDI ( electronic

data interchange ). Current plans foresee the use by
Uniworld of AT&T 's messaging platform ( Easylink ),
instead of Unisource 's existing one ( 400Net ).

— as regards data networks, during 1996 to 1997,
Uniworld will integrate the existing international data
networks assigned by the parents . These networks are
not currently interworkable as they are based on
different equipment ( mainly Nortel for X.25 and
frame relay in the case of Unisource and Stratacom
for frame relay in the case of BCS-E ). As a first
stage, a network to network interconnection — to be
developed by manufacturers of the equipment
installed — will improve seamlessness . ATM will then
gradually be introduced — together with UCS — so
that an integrated voice-data platform will be
available by the year 2000 . Part of the integration
will involve the standardization of delivery platforms
for each service . The combined network will be
expanded by the setting up of additional points of
presence ( POPs ); in particular, in key markets like
Germany and Italy, where current coverage is very
poor . Integrated traffic will make feasible the instal ­
lation of POPs in countires where it would not be
economical to do so for a single type of traffic,

presence ( POPs ); in particular, in key markets like All of the above services are divided between
Germany and Italy, where current coverage is very exclusive ( 15 ) ( virtual network services — VNS / IVPN /
poor . Integrated traffic will make feasible the instal ­ closed user group voice services, X.25 bearer service,
lation of POPs in countires where it would not be frame relay service, SNA service ( 16 ), managed
economical to do so for a single type of traffic, bandwidth service and X.400 bearer service ) and

non-exclusive services ( call centre services, LAN inter ­
connect services, messaging services, VSAT satellite
services, network-related outsourcing, network facilities
— as regards data services the Uniworld services will management, private network provisioning, Internet
access services and data VPN services ).

initially be based on the current pan-European
offerings of Unisource and AT&T 's BCS-E, but they
will offer a better geographical coverage than these
existing offerings, given the different POPs of the
existing data networks of the parents .

In addition, Uniworld will roll out new data services
like high speed LAN ( 12 ) interconnect, high speed
bandwidth services, interworking and Internet access
to big business users ( offering improved quality and
security ). Most of these will be introduced by the end
of 1996 and will generally be available in 1997 .

5 . Uniworld 's operating functions : sales, marketing and

services

( a ) Sales

Uniworld will be responsible for negotiating distribution

agreements and third-party commercial sales agreements .
Alongside these, other services to be launched ( in In addition, it will work closely with distributors to
early 1997 ) are integrated ( voice and data )

( 13 ) The EVUA has issued in 1996 a new tender for integrated

voice / data services .

( 14 ) Service applications will include reservation centres,
customers service support centres and maintenance and
(") It also offers more features ( than the minimum common warranty support centres . These services require

denominator but less limited to European-wide free phone numbers (0 800 ).

denominator ) but less geographical coverage ( limited to
Europe ), than the WorldSource VNS service that Unisource
and AT&T UK are beginning to distribute in continental

( 15 ) See below under point E ( 2 ) ( c ).

( 16 ) SNA is an extension of the frame relay service that offers

network access interfaces suitable to meet the requests of
customers working within an IBM environment .

Europe and the UK respectively .
( 12 ) Local area network .

No C 44 / 8 EN Official Journal of the European Communities 12 . 2 . 97

ensure that offers to customers respond to their
expressed needs and will provide sales training for
Uniworld employees and distributors . Uniworld will also
support the development of a single integrated sales
process incorporating technical support, bid
management, contract support and service ordering .

In respect of complex bids, Uniworld will assist in or
assume direct leadership responsibility .

( b ) Marketing

Uniworld will be responsible for developing the service
portfolio marketing strategy including the overall pricing
strategy ( retail pricing will however be the responsibility
of distributors ). It will also conduct competitive
assessment and customer analysis and assist product
managers in developing individual service strategies .
Uniworld will develop marketing communications
products including advertising . It will also support bid
management to non-standard requests for proposals
requiring the integration of multiple services .

( c ) Services

— the by-laws of Uniworld NV and Uniworld CV

( idem ),

— the parental support agreement,

— principles for asset selection,

the supply agreement between Uniworld and UCS,

— the master distribution agreement,

— principles for IPR negotiations, and

— the network evolution plan .

2 . Contractual provisions

( a ) Supply agreement with Unisource Carrier Services
( UCS )
Uniworld will define, control and own service definition
and define and control service platforms ( i.e. the
software installed in the equipment that controls the
voice customer and care data elements traffic over . It will the also backbone be responsible network for ), and the Uniworld develop or will operate be a its service own provider basic switching and thus and will trans not ­
life cycle management of all services in its portfolio . In mission systems, but will purchase these capabilities from
nology addition / platform, it will determine evolution that the overall enables architecture the services to / tech be ­ the suppliers subsidiary international . of The Unisource networks preferred NV of supplier responsible the Unisource will for be NV managing UCS share, a ­
competitive tionality, customer and efficient service in attributes terms of and features cost ., func In so ­ holders (' preferred ' means that Uniworld will be free to
doing, it will seek to accommodate the reasonable needs contract with other suppliers if the demanded services
of its affiliated and other key non-affiliated suppliers . are outside the scope of UCS or in case UCS does not or
The resulting plans will be approved by the supervisory cannot compete with the terms and conditions of other
board by supermajority . suppliers ).

E. THE NOTIFIED AGREEMENTS

1 . Agreements

The original notification comprised the Joint Venture
and Shareholders Agreement and the following
agreements and other documents annexed to it :

— the articles of association of Uniworld NV,

— the limited partnership agreement of Uniworld CV

( now Uniworld VOF ),

Under the supply agreement, UCS will deliver basic
switching and transmission elements, including the main
switching elements and the international switching
centres of the Unisource shareholders, and will route the
traffic to the agreed destination or point of intercon ­
nection as determined by the service database admin ­
istered by Uniworld . In this respect, UCS will provide to
Uniworld interconnection and transmission capacity that
will include international, national and local leased lines

and international and national PSTN terminations .

UCS will have a contractual requirement to provide the
capacity necessary to meet Uniworld 's traffic forecasts at
agreed performance levels . The price for UCS ' services is
guaranteed for 5 years . The average minute / price
charged by UCS will be reduced provided that Uniworld
delivers the agreed total volume of international traffic

## 12 . 2 . 97 EN Official Journal of the European Communities No C 44 / 9

and uses the agreed capacity of international bandwidth .
Should that not be the case, prices charged by UCS will
be adjusted accordingly .

companies . In this respect, it will be treated as though
it were a subsidiary of Unisource, its shareholders or
AT&T in respect of services, to the extent that there

are no contractual restrictions with third parties
prohibiting it,

The Parties have indicated that similar price guarantees
will deliver be similar provided volumes to third-party of international customers traffic that commit . to — will have a ' most favoured customer status ' from

Unisource, its shareholders and its affiliated
companies and AT&T for the provision of other

In addition, the intention of the parties is to use the related commercial services, such as the purchase of '
' capacity . Uniworld will be offered ' best customer
UCS pan-European network for all internodal
bandwidth needs of the Uniworld services . prices for services which are in principle available

both to Uniworld and to non-related customers in

the marketplace .

Uniworld will collect customer care information for
billing, account inquiry, etc . In addition, Uniworld will
also own the service control points that maintain the real
time definition and realization of the Uniworld services .

Such points will be connected to the UCS network .

'
Uniworld 's CEO will attend UCS board meetings —
without the right to cast any vote — concerning network
planning and other matters concerning the supply

agreement .

( c ) Non-competition

Under Article 12 of the Joint Venture Agreement, the
parents agree with Uniworld VOF that they shall not
incorporate a business or engage in exclusive Uniworld
services ( as described above ) or participate in any joint
venture or other cooperative arrangement engaged in the
provision of exclusive Uniworld services .

( b ) Relationship between Uniworld and its parents The following activities are excluded from the
non-compete provisions :

Under Article 10 of the Joint Venture Agreement,
Uniworld : — the development and offering to customers of a

parent 's national services and international services
based on bilateral arrangements,

— shall purchase supplies on a best available basis in

accordance with rules, regulations and guidelines of
the European Commission and the relevant national
regulatory agencies . ' Best available ' refers to price,
quality, features and functions, capacity and
geographical coverage purchased from affiliated
parties offered ( or not ) by them to third parties,

— shall be provided access to networks and underlying

facilities of any company involved directly or
indirectly in Uniworld at non-discriminatory
competitive prices . Such prices charged to Uniworld
shall be competitive in view of prices charged for
similar services by competitors of the affiliated
companies and shall be consistent with applicable
national and European law, including obligations of
non-discrimination and prohibitions of cross-subsi ­
dizations . Neither must they be more advantageous
than the prices charged for similar services in similar
circumstances to other customers of such affiliated

companies,

— shall have a ' privileged subsidiary ' status, with regard

to terms and conditions for transactions between

Parties for resources and services from these

— services that compete with non-exclusive Uniworld

services, and

— competing offers of third parties ( basically Infonet 's

services, but also Concert 's or Atlas 's ) who have
decided to market their services through the
Unisource shareholders .

The non-compete obligation shall not affect the access
by third parties to any reserved and basic network of the
Parties and their affiliated companies, nor shall it affect
any parent obligation to make available reserved and
basic services .

All non-competition obligations of the parents and their

affiliated companies would be valid until the termination
of the Joint Venture Agreement . After termination no
participant shall during the original duration of a
customer contract solicit those existing customers with
respect to which the other Party has been assigned under
the termination rules the right to provide Uniworld

No C 44 / 10 EN Official Journal of the European Communities 12 . 2 . 97

services ( Article 16 ( 3 ) ( 1 ) ( F ) of the Joint Venture
Agreement ). Finally, Article 16 ( 3 ) ( 2 ) ( B ) ( ii ) of the
Joint Venture Agreement provides that a company
exiting ( from Uniworld ) shall, under the non-permitted
exit ( 17 ) provision as from the date of the non-permitted
exit and for a period of 12 months continue to be subject
to Article 12 of the Joint Venture Agreement .

( d ) Distribution

( 1 ) Distribution of services

Uniworld will distribute its services through local
distributors . Uniworld intends, wherever appropriate, to
own or control them . Distributors are responsible for
managing ( and can own ) local / national networks .
However, Uniworld will approve the delivery platforms
to be used by distributors in delivering Uniworld
services, the overall architecture of the combined
distributor / Uniworld network and the location and
capacity of the gateways to be used to interface the
distributor 's and Uniworld 's networks .

In the home countries, the respective Unisource share ­
holder will be the exclusive distributor . AT&T UK will

be the exclusive distributor in the UK and AT&T will act

as the exclusive distributor in the US of Uniworld 's

services to be delivered in Europe . In addition, AT&T
could sell Uniworld services to a European-head ­
quartered firm which vested its European and / or
worldwide telecommunications decisions with its US

subsidiaries or locations .

In other countries where Unisource, AT&T, the
Unisource shareholders or any of their affiliated
companies have selected a national partner, the latter will
be the preferred distributor .

Distributors will pay to Uniworld the established transfer
price for any given service . Uniworld will provide
distributors with lists of recommended retail prices .
Distributors, however, are free to set their own retail

( 17 ) Under Article 16 ( 3 ) ( 1 ) neither parent company of
Uniworld may terminate the agreement before 1 January
2000 . Most terminations before that date, in particular in
case of material breach of the agreement, non-permitted
transfers of shares or withdrawal, bankruptcy or suspension
of payments by a party, are deemed to be non-permitted
exit .

prices . Originally such prices have to be communicated
to Uniworld . That was required in order for Uniworld to
provide billing services to distributors and final
customers ( using AT&T 's proprietary billing platform ).
However, the Commission objected to that on grounds
that Uniworld could use such information to influence
resale price by distributors . On that basis, the Parties
modified such provision so that the obligation to
communicate retail prices to Uniworld has been elim ­
inated . In addition, the Parties have ensured that
Uniworld will not use information regarding retail prices
received from a distributor for fixing or attempting to fix
resale prices .

An initial distribution of potential customers has been
made based on the location of the decision making units
( DMU ) of the top target customers . However, the final
assignment of a customer to a distributor depends on the
choice of the customer . In any event, it is expected that
most sales will involve a lead distributor, one or several
support distributors and Uniworld . Support distributors
will receive from Uniworld a distributor fee of 4 % of
the transfer price .

In addition, Uniworld plans to create a ' Uniworld
Association ' after the model of the WorldPartners
Association . It will have a light structure made of a
permanent secretariat and an executive forum chaired by
the CEO of Uniworld . The Uniworld Association will
serve as a platform for discussion between Uniworld and
its distributors, so that the latter will be provided an
opportunity to influence Uniworld 's services devel ­
opment, processes and technology ( i.e. the growth of the
network ). The Association will act as a central coor ­
dinator between distributors for ensuring that the
European requirements of customers are met in the most
efficient manner .

The Parties have indicated that no actual retail prices ( or

related conditions ) of Uniworld end-user services will be
discussed in the Association and that market trends in
pricing will only be discussed in general terms without
disclosing sensitive customer pricing information .

The distribution licences extend to the Uniworld and
WorldSource services in the territory granted .

The exclusivity provisions oblige Uniworld and the
distributor not to actively seek customers for Uniworld 's
exclusive services in the distributor 's territory, as regards
Uniworld, and outside it, as regards the distributor,
respectively .

## 12 . 2 . 97 EN Official Journal of the European Communities No C 44 / 11

( 2 ) Existing customer contracts sales board . Instead of being attributed to a given
distributor in accordance with the normal procedures, a
global account team will be formed for each of these

Existing customer contracts that fall within the scope and customers comprising a global account team leader and
the territory entrusted to Uniworld, concluded by at least one regional or national account manager . The
Unisource or AT&T prior to the setting up of Uniworld, global account team will report to Uniworld 's multi ­
will be assigned to : national accounts group .

( a ) Uniworld, as regards the right to provide services

which it shall deliver at transfer prices to the specific
distributor ; and

( b ) the Uniworld distributor, as regards the customer

relations and distributions rights .

The global account team will coordinate and involve the
worldwide resources of Uniworld, AT&T Business
solutions, WorldPartners, Unisource and its shareholders
as required in order to better serve the global needs of
that category of top customers on am one-stop-shopping
basis . In this respect, the global account group will
request support from any affiliated or related company
through a defined worldwide sales support process that
will allow for a simple, low-cost sales support coordi ­
nation process .

These customers will serve as a customer base for

Uniworld . Such customer base is not negligible in view
of the number of contracts already signed by its parents .
According to the Parties, the global account
management programme will be a very large determinant
of the relative success in the marketplace .
The following rules will apply in the assignment of these
existing contracts :

F. RELEVANT MARKET
( i ) the respective parent distributor will assume
customer contracts ( and the associated financial
obligations ) for customers whose decision-making 1 . Product market
unit ( DMU ) is in any of the home countries, the
UK or the US ;

( ii ) for existing customer contracts where the DMU is

outside the abovementioned countries, the contract
will be assigned to the new distributor in that

country . The actual conditions of the assignment
will be a matter of negotiation between the owner
of the contract and the new distributor ;

Services within the business scope of Uniworld fall
within the customized package of corporate telecom ­
munications services and packet switched data communi ­
cations product markets as described in the Atlas and
Global One Decisions ( 18 ).

Services within those two categories are mainly
demanded by large multinational corporations, extended

( iii ) in countries where no Uniworld distributor has been enterprises, as well as major national and other intensive

nominated yet, Uniworld will manage the users of telecommunications, often as an alternative to
distribution activities . self-provision . The requirements of such users, that

extend to all products or corporate services provided by
Uniworld, were discussed in detail in the BT-MCI ( 19 )
Decision . Providers of such services are expected to take
The priority considerations are the maintenance of full responsibility for all services provided from ' end to
customer satisfaction and customer preference . end '.

( iii ) in countries where no Uniworld distributor has been

nominated yet, Uniworld will manage the
distribution activities .

( 3 ) Global account management programme Very large companies demand that locations
geographically dispersed across different territories be

Uniworld will organize an international support organ ­
ization which will support a global account management
programme created to enhance business relationships
with multinational customers . It will focus on prospective
customers which because of size and / or strategic
importance will be selected by Uniworld 's international

( 18 ) Commission Decisions of 17 July 1996 relating to
proceedings under Article 85 of the EC Treaty and Article

53 of the EEA Agreement ( Case Nos IV / 35.337 — Atlas,
and IV / 35.617 — Global One ). OJ No L 239, 19 . 9 . 1996 .
(") Commission Decision of 27 July 1994, OJ No L 223, 27 . 8 .

1994 .

No C 44 / 12 fEN ] Official Journal of the European Communities 12 . 2 . 97

linked . The services required in this connection ( i.e. 3 . Competition in the markets
provision of sufficient delivery capacity and in-country
support ) must be supranational in nature and respond to
a very particular set of features including the provision ( a ) Cross-border regional
of services across multiple borders at consistent service non-reserved corporate
levels, the availability of delivery schedules ; the irrel ­ Europe
evance of time zones, languages and currencies ; and
making customers assume service is local regardless of
where such service is provided from . Truly global ' According to AT&T, the
services ( i.e. connecting locations of companies in currently will resemble the
countries or territories located outside the main indus ­ between 1983 and 1993,
trialized areas of the world ) are an extreme case . restructuring of the

( a ) Cross-border regional market : the market for
non-reserved corporate telecommunications services in
Europe

' According to AT&T, the European market place
currently will resemble the US market that existed
between 1983 and 1993, during which period essential
restructuring of the telecommunications industry
occurred as a result of market competition, new services,
pricing structures, marketing sales and services strategies .
The result was a very big shift in market dynamics,
significant entry and unparalleled growth .

The provision of such services would appear to
customers to be seamless . However, the provision of real
seamless services is now only at a very rudimentary stage
in particular as regards customer care and global billing
features, and the establishment of infrastructure abroad,
the latter in view of differences in regulatory regimes
between countries .

According to the Parties, the addressable size of the
European market will grow from US $ 1,9 billion in
1995 to US $ 4,2 billion in 2005 for IVPN and from
US $ 2,9 billion in 1995 to US $ 4 billion in 2005 for
data services .

BT-MCI 's Concert and Atlas / Global One are expected
to become major players on that market . To those it is
necessary to add some other significant players like
2 . Geographic market Infonet, Sita or IPSP .

( b ) National markets in Europe

Due to the cost structure of advanced corporate services,
notably the cost of leasing the required infrastructure,
prices of such services are related to geographic
coverage, as is the cost of additional features ( e.g.
one-stop-billing, help-desk and technical assistance
around the clock, customized billing ). In that respect,
and following the reasoning applied in the Atlas and
Global One cases, demand for these services exists in at
least three distinct geographic markets, namely at global,
cross-border regional and national levels .

Each of the shareholders of Unisource face a number of

competitors in their respective domestic market for
packet switched data communication services . So, such
services are completely liberalized in Sweden, there are
at least five licences granted in the Netherlands, eight in
Spain and several in Switzerland . Some of those
companies ( such as Spain 's BT Tel or Sweden 's Tele ­
nordia ) are also the domestic extensions of the global
alliances ( BT in those two cases ).

4 . Market shares of the parties

Uniworld will be active in the cross-border regional layer ( a ) Cross-border regional market
of the geographical market, that in this case will be the
provision of such services on a pan-European basis
( including national extensions of the latter ). Market shares figures for the cross-border regional
market are highly unreliable . Their emerging and
evolving nature and the large traffic volume of big
corporate customers are explanatory arguments for such
unreliability .

Given the links between Uniworld, Unisource and its
shareholders, and given the inextricable links between all
notified cases involving Unisource, Uniworld is thought Current combined market share in the EEA and Swit ­
to have also an impact at least on the domestic markets zerland of the parties is less than 10 % for data services
of the European home countries, where each Unisource and 10 % for messaging . No data are available for
shareholder enjoys a dominant position . IVPN voice services and network related outsourcing .

12 . 2 . 97 EN Official Journal of the European Communities No C 44 / 13

( b ) National markets business scope of Uniworld will be exchanged in
the strategic advisory boards .

As regards domestic packet switched data communi ­
cation services, in 1995, Telia had 78 % in Sweden ( 20 ),
PTT Telecom and Telefónica over 95 % in the

Netherlands and Spain and Swiss Telecom nearly 100 %
in Switzerland . Market figures in respect of the overall
domestic telecommunications services were 91 % for

Telia, near 100 % for PTT Telecom, 95,7 % for Tele ­
fónica and near 100 % for Swiss Telecom .

G. CHANGES MADE AND UNDERTAKINGS GIVEN

FURTHER TO THE COMMISSION 'S INTER ­

VENTION

Certain features of the notified transaction appeared to
be incompatible with Community competition rules .
Consequently, the Commission by letter of 7 May 1996
informed the Parties of its concerns . In the course of the

notification procedure the Parties have amended the
original agreements and given undertakings to the
Commission .

2 . Undertakings given by the parties

In addition, the Parties have provided the following
behavioural undertakings :

( a ) Undertakings by Unisource NV and all of its share ­

holders

( 1 ) Unisource and every one of its shareholders
undertakes that it or its subsidiaries will not offer

terms and conditions to Uniworld in respect of
access to basic switched transmission capacity and
leased lines as well as interconnection to PSTN and

PSDN networks in the home countries of the

Unisource shareholders which are discriminatory in
favour of Uniworld .

Commission . ( 2 ) Unisource and every one of its shareholders

undertakes not to misuse confidential information
obtained from third parties to the benefit of
Uniworld and will in relation to Uniworld ensure

1 . Contractual changes

and facilitate the respect of the undertakings related
to misuse of confidential information given in the
As described before, the Parties committed to amend the context of the Unisource — Telefónica case ( Case

following provisions in the notified agreements : No IV / 35.830 ).

1 . Contractual changes

following provisions in the notified agreements :

( a ) the communication of retail prices to Uniworld

The Parties agreed to remove the stipulation that
distributors are obligated to communicate price
information to Uniworld regarding specific
customers ( 21 ).

( b ) strategic advisory boards

The parties agree to amend the notified agreement in
respect of the strategic advisory boards to stipulate
that :

— recommendations by the strategic advisory
boards shall not be binding on the participants
and their pertinent affiliated companies, and

— no information relating to prices and commercial

conditions of products and services outside the

( 20 ) In all cases through the respective UBN domestic
subsidiary .
( 21 ) Where a distributor chooses not to communicate its retail

prices to Uniworld, then clearly that distributor 's customers
would not be able to benefit fully from Uniworld 's
centralized billing capacity, as described above .

( b ) Undertakings by all Unisource shareholders

( 3 ) Every shareholder undertakes not to grant any cross ­

subsidies to any entity created pursuant to the
Uniworld agreements funded out of income
generated by any business which they operate
pursuant to any exclusive right .

( 4 ) Every shareholder undertakes that it will not tie in

the sale of any service provided by Uniworld with

any service provided by each of them . Each will
moreover, for as long as it has exclusive or special
rights to provide telecommunications services and / or
infrastructures, only make combined offerings of
Uniworld and its own services in a way that the
customer can identify in the contract forms the price
charged as well as the other terms and conditions for
these services and it will ensure that each of these

components is separately available at equivalent
conditions .

( 5 ) Every shareholder undertakes not to bundle the

provision of Uniworld ( international ) services with
the provision of domestic services outside the scope
of Uniworld .

No C 44 / 14 EN Official Journal of the European Communities 12 . 2 . 97

3 . Position of AT&T lished between AT&T and any Unisource share ­
holder ;

During the assessment of the case, AT&T made a
detailed description of its obligations under US regu ­
lations in respect of its international facilities and
services, in particular regarding interconnection to its
networks . AT&T further confirmed its intention to abide
by all relevant US legislation and FCC rules to which it
is subject from time to time in respect of its international
facilities and services .

In addition, AT&T offered to the Commission the
following :

( a ) AT&T undertakes to advise DG IV promptly of any

complaint filed with the FCC regarding access to or
interconnection with AT&T 's international facilities,
including any complaint filed with the FCC
regarding bilateral correspondent arrangements, by
telecommunications operators or service providers
from the EEA or Switzerland . AT&T further
undertakes to inform DG IV of any final decision
taken by the FCC in regard to any such complaint ;

( b ) with respect to operators with international facilities

licences in the EEA and Switzerland with whom

AT&T today has an accounting rate agreement, and
for traffic sent in the context of the bilateral corre ­
spondent regime, AT&T undertakes to offer
cost-based accounting rates that, in all cases, would
be no higher than the lowest accounting rate estab

( c ) with respect to operators with international facilities

licences in the EEA and Switzerland with whom
AT&T may in the future establish an accounting rate

agreement, AT&T undertakes to offer cost-based
accounting rates that, in all cases, would be no
higher than the lowest accounting rate then in effect
between AT&T and any Unisource shareholder .

H. THE COMMISSION'S INTENTIONS

On the basis of the foregoing, the Commission intends
to take a favourable view pursuant to Article 85 of the
EC Treaty and Article 53 of the EEA Agreement and to
grant to Uniworld an individual exemption pursuant to
Article 85 ( 3 ) of the EC Treaty and Article 53 ( 3 ) of the

EEA Agreement . Before doing so, it invites interested
third parties to send their observations within one month
of the publication of this notice to the following address,
quoting the reference ' IV / 35.738 — Uniworld '.

European Commission,
Directorate-General for Competition ( DG IV ),
Directorate C,
Rue de la Loi / Wetstraat 200,
B-1049 Brussels ;
Fax : ( 32 2 ) 296 98 19 .