CELEX: 51997PC0287
Language: en
Date: 1997-06-04
Title: Amended proposal for a European Parliament and Council directive on the application of open network provision (ONP) to voice telephony and on universal service for telecommunications in a competitive environnment (replacing European Parliament and Council Directive 95/62/EC)

COMMISSION OF THE EUROPEAN COMMUNITIES
                                                Brussels, 04.06.1997
                                                COM(97) 287 final
                                                96/0226 (COD)
                           Amended proposal for a
        EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE
   on the application of open network provision (ONP) to voice telephony
and on universal service for telecommunications in a competitive environment
      (replacing European Parliament and Council Directive 95/62/EC)
         (presented by the Commission pursuant to Article 189 a (2)
                                of the EC-Treaty)
 ---pagebreak---  ---pagebreak---                                  EXPLANATORY MEMORANDUM
The Commission hereby presents a modified proposal for a European Parliament and
Council Directive on the application of open network provision (ONP) to voice telephony
and on universal service for telecommunications in a competitive environment (replacing
European Parliament and Council Directive 95/62/EC).
The modified proposal incorporates those amendments proposed by the European
Parliament at First Reading which were accepted by the Commission.
 1. Introduction
 a) Background
 The Commission adopted its proposal on 11.9.19961, and it was formally transmitted
to the EP and the Council on 5.11.1996.
 The Economic and Social Committee gave a favourable Opinion on 27.2.19972.
 The European Parliament adopted a favourable Resolution at its First Reading on
 20.2.1997, and proposed 34 amendments to the Commission proposal3.
 b) Purpose of the Directive
The aim of the Commission proposal is to replace the existing European Parliament and
Council Directive 95/62/EC on the application of open network provision (ONP) to voice
telephony4.
The adaptation is being made in view of the liberalisation of public voice telephony services
by 1st January 1998 (with transition periods for certain Member States), in accordance with
Commission Directive 96/19/EC5.
The purpose of the adaptation is two-fold: firstly it is necessary to adapt the Directive to a
competitive environment and, in particular, to be more specific as to whom the provisions
of the Directive will apply in a market with many players; secondly the Directive is being
strengthened in the area of universal service, in line with the position expressed in the
Commission Communication on universal service for telecommunications6.
The adaptation is consistent with the Common Position adopted by the Council on the
European Parliament and-Council Directive 97/. ./EC on interconnection in telecommuni-
cation7, which lays down that only the provision of afixedpublic telephone network and
fixed public telephone service can be financed by a universal service financing scheme.
1
   COM(96) 419, OJ C 371, 9.12.1996, p. 22
2
  TRA/324
3
   A4-0049/97, PV 20.2.1997
4
  O J L 3 2 1 , 30.12.1995, p. 6
5
  O J L 7 4 , 22.3.1996, p. 13
6
  COM(96)73, 13.3.1996
7
  OJ C 220, 29.7.96, p. 13
                                             - 2-
 ---pagebreak--- 2. EP amendments accented by the Commission
Of the 34 amendments adopted by the European Parliament at First Reading, the
Commission accepted 19 in full, in part or in principle (i.e. with some reformulation
of the text).
Amendments accepted in full, in part or in principle:
2, 3, 5, 8, 10, 13, 14, 17, 19, 20, 22, 25, 29, 30, 31, 33, 35, 41, 51
The Commission accepted those amendments which:
• help to more clearly specify the scope of universal service and improve consumer
    protection [amendments 3, 10 (parts), 19, 20, 22 (parts), 29, 35 and 41];
• bring the text in line with Community law, in particular the data protection Directive
    and the interconnection Directive [amendments 17 and 33];
• improve the clarity of the text [amendments 2 (parts), 5, 8 (parts), 25 and 31].
In addition, the Commission agreed with the EP on the principles underlying the following
amendments:
• Amendment 13 (parts): geographic segmentation
• Amendment 14: reports on tariff evolution
• Amendment 30: number portability
• Amendment 51: consultation of interested parties
In its modified proposal, the Commission has taken.over amendments 13, 19, 29, 35 and 51
in the relevant recitals rather than as changes to the Articles.
3. Amendments not accepted by the Commission
The reasons which led the Commission not to accept a number of the amendments (or parts
of them) proposed by the European Parliament are given below, grouped into 4 categories.
Scope of universal service, financing schemes and contributors
[amendments 3 (parts), 7, 10 (parts), 22 (parts), 46 and 50]
Universal service as defined in this proposal is indeed a minimum set of services, and
Member States may be allowed to set additional requirements as long as they do not
increase contributions from market players to the cost of universal service. However, the
Commission is not able to accept those amendments which could lead to any change of the
scope of universal service as already agreed by the EP and the Council, nor to the cost of
universal service becoming excessively high. Provision of terminal equipment for disabled
users, or public access to the information society are an important issue, but these social
needs should be-met by other means, and not by including them within the scope of
universal service.
 ---pagebreak--- The interconnection Directive also lays down principles for financing universal service, and
the Commission does not accept the need to address that issue in this Directive.
Price regulation, tariff monitoring and European guidelines for affordability
[amendments 2 (parts), 13 (parts), 44 and 45]
This Directive does not seek to change the existing situation, whereby Member States
are free to have or not to have uniform prices throughout their territory. Therefore the
first part of amendment 2 is not accepted. However unbalanced prices distort competition,
and there are better methods of protecting vulnerable users, such as targetted tariff v
schemes.
Art. 4 of the Directive does foresee the possibility for implementation of price caps or
other similar schemes in order to prevent any excessive price rises for residential users.
But they will not be necessary in all cases and therefore should not be made obligatory
(amendment 13).
Member States must publish regular reports on tariffs which the Commission will
monitor, taking actions if needed. Common rules are not considered necessary
(amendment 45).
In accordance with the principle of subsidiarity, the criteria to calculate affordability
are also to be determined at a national level. Considering the very different national
or regional conditions throughout the Union, it does not seem appropriate to aim at
providing Europe-wide measures in this area (amendment 2, second part; amendment 44).
Consistency with other Directives
[amendments 8 (parts), 16, 18, 32, 37 and 47]
The issues concerning entries in directories (amendments 16, 18 and 47) are already dealt
with by the Directive concerning the processing of personal data and the protection of
privacy in the telecommunications sector, in particular in the integrated services digital
network (ISDN) and in the public digital mobile networks.
The definition of universal service has already been agreed in the interconnection Directive
(amendment 8). The restriction for NRAs to intervene only in case of failure of commercial
negotiations (amendment 32) is inconsistent with the line taken in the context of the inter-
connection Directive.
The concept of a dispute resolution procedure the Parliament wants to introduce in amend-
ment 37 is inconsistent with the procedures in Directives 92/44/EEC on ONP leased lines
and 95/62/EC on ONP voice telephony, both approved by EP.
Other amendments
•   Amendment 12 reformulates the Commission text without improving it.
•   Amendment 24 is already covered by Art. 26.
•   Amendment 28 would be inconsistent with the aims of Art. 12(4).
•   Amendment 36 introduces some rather unclear concepts concerning the non-payment of
    bills, which do not seem to improve the text of Art. 21.
                                              -4-
 ---pagebreak---    Amendment 52 foresees mandatory publication of quality of service targets which does
    not seem absolutely necessary.
4, Conclusion
The Commission has accepted 19 of the 34 amendments proposed by the European
Parliament at First Reading either in whole, in part or in principle.
In accordance with Article 189a paragraph 2 of the EC Treaty, the Commission amends its
initial proposal, incorporating these amendments.
 ---pagebreak---                                        Amended proposal for a
                 EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE
           on the application of open network provision (ONP) to voice telephony
       and on universal service for telecommunications in a competitive environment
              (replacing European Parliament and Council Directive 95/62/EC)
                    Original text                                              Amended text
                                                     Recital 4
                                     (based on EP amendments 2 and 13)
4. Whereas the basic universal service requirement          4. Whereas the basic universal service requirement
is to provide users on request with a connection to         is to provide users on request with a connection to
the fixed public telephone network at a fixed               the fixed public telephone network at a fixed
location, at an affordable price; whereas there             location, at an affordable price; whereas there
should be no constraints on the technical means by          should be no constraints on the technical means by
which the connection is provided, allowing for wire         which the connection is provided, allowing for wire
or wireless technologies; whereas affordability is a        or wireless technologies; whereas affordability is a
matter to be determined at national level in the light      matter to be determined at national level in the light
of specific national conditions, including town and         of specific national conditions, including town and
country planning aspects; whereas the affordability         country planning aspects; whereas the affordability
of telephone service is related to the information          of telephone service is related to the information
users receive about telephone usage expenses as             users receive about telephone usage expenses as
well as the relative cost of telephone usage                well as the relative cost of telephone usage
compared to other services;                                 compared to other services;
Whereas tariff rebalancing is leading to a move             Whereas tariff rebalancing is leading to a move
away from uniformly low and non cost-oriented               away from uniformly low and non cost-oriented
tariffs; whereas until competition is effectively           tariffs; whereas until competition is effectively
established safeguards may be necessary to ensure           established safeguards may be necessary to ensure
that price increases in remote or rural areas are not       that price increases in remote or rural areas are not
used to compensate for losses in revenue resulting          used to compensate for losses in revenue resulting
from price decreases elsewhere; whereas price caps          from price decreases elsewhere; whereas tariff
and similar schemes may be used to ensure that the          rebalancing is an essential feature of a competitive
necessary rebalancing does not affect users                 market; whereas, however, price caps and similar
adversely, and that the differences between prices in       schemes, possibly based on geographic
high cost areas and prices in low cost areas do not         segmentation, may be used to ensure that the
endanger the affordability of telephone services;           necessary rebalancing does not affect users
                                                            adversely, and that the differences between prices in
                                                            high cost areas and prices in low cost areas do not
                                                            endanger the affordability of telephone services;
 ---pagebreak---                    Original text                                                Amended text
                                                     Recital 5
                                        (based on EP amendment 3)
5. Whereas the importance of the telephone network          5. Whereas the importance of the telephone network
and service is such that it should be available to          and service is such that it should be available to
anyone reasonably requesting it; whereas in                 anyone reasonably requesting it; whereas in
accordance with the principle of subsidiarity, it is        accordance with the principle of subsidiarity, it is
for Member States to decide which organisations             for Member States to decide on the basis of
have the responsibility for providing the various           objective and non-discriminatory criteria which
elements of the universal service for                       organisations have the responsibility for providing
telecommunications as defined in this Directive;            the various elements of the universal service for
whereas corresponding obligations could be                  telecommunications as defined in this Directive,
included as conditions in authorisations to provide         taking into account the ability of organisations to
voice telephony services; whereas only the net cost         provide all or part of these elements: whereas
of obligations covered in this Directive should be          corresponding obligations could be included as
shared under a universal service financing scheme;          conditions in authorisations to provide voice
                                                            telephony services; whereas only the net cost of
                                                            obligations covered in this Directive should be
                                                            shared under a universal service financing scheme;
                                                 Recital 6a (new)
                                        (based on EP amendment 41)
                                                             6a. Whereas, where telephone directories are
                                                             provided free of charge to subscribers, subscribers
                                                             who are blind or partially sighted should be granted
                                                             free access to directory enquiry services, in order to
                                                             guarantee equal access for all users to published
                                                             directory information:
                                                 Recital 7a (new)
                                    (based on EP amendments 19 and 29)
                                                             7a. Whereas the publicly available telephone
                                                             service is of particular importance to blind and
                                                             partially sighted people; whereas organisations
                                                             providing publicly available telephone services
                                                             should take into account their needs bv offering the
                                                             possibility of having bills in suitable alternative
                                                             formats, and where appropriate provide publicly
                                                             accessible text telephones for deaf and hearing-
                                                             impaired people;
 ---pagebreak---                    Original text                                               Amended text
                                                    Recital 8
                                       (based on EP amendment 51)
8. Whereas quality and price are key factors in a          8. Whereas quality and price are key factors in a
competitive market, and national regulatory                competitive market, and national regulatory
authorities should be able to monitor achieved             authorities should be able to monitor achieved
quality of service and take appropriate corrective         quality of service for fixed public telephone services
measures where necessary; whereas these powers             and take appropriate corrective measures where
are without prejudice to the application of                necessary; whereas transparency of network
competition law by national and Community                  interface specifications is a prerequisite for a
authorities;                                               competitive market in terminal equipment: whereas
                                                           the national regulatory authority should consult the
                                                           interested parties, and especially terminal
                                                           equipment suppliers and the representatives of the
                                                           users and consumers, on the changes in existing
                                                           network interface specifications: whereas these
                                                           powers are without prejudice to the application of
                                                           competition law by national and Community
                                                           authorities;
                                                   Recital 11
                                        (based on EP amendment 35)
 11. Whereas certain prior obligations concerning            11. Whereas certain prior obligations concerning
tariffs and cost accounting systems will no longer          tariffs and cost accounting systems will no longer
be appropriate once competition is introduced, and          be appropriate once competition is introduced, and
others can be relaxed by the competent national             others can be relaxed by the competent national
regulatory authority as soon as competition                 regulatory authority as soon as competition
achieves the desired objectives; whereas in all cases       achieves the desired objectives; whereas in all cases
the non-discrimination requirements of the                  the non-discrimination requirements of the
competition rules of the Treaty apply;                      competition rules of the Treaty apply;
                                                            Whereas price transparency should guarantee that
                                                            residential subscribers do not subsidise discounts to
                                                            industrial customers: whereas Member States
                                                            should ensure that there is consultation before the
                                                            introduction of the different discount schemes:
                                                     8-
 ---pagebreak---                     Original text                                               Amended text
                                                    Recital 14
                                          (based on EP amendment 5)
14. Whereas in view of the forecast convergence of           14. Whereas in view of the forecast convergence of
fixed and mobile telephone services, the                     fixed and mobile telephone services, the extent to
applicability of the Directive with respect to mobile        which the Directive is applicable with respect to
services should be re-examined when the Directive            mobile services should be re-examined when the
is reviewed; whereas the review date of 31                   Directive is reviewed: whereas the review date of 31
December 1999 will allow for a coordinated review            December 1999 will allow for a coordinated review
of all the ONP Directives in the light of experience         of all the ONP Directives in the light of experience
with the liberalization of public telecommunications         with the liberalization of public telecommunications
networks and voice telephony services;                       networks and voice telephony services;
                                              Article 2(2), indent 7
                                          (based on EP amendment 8)
   "national regulatory authority" means the body            - "national regulator}' authority" means the body or
   or bodies in each Member State, entrusted by that           bodies in each Member State, as described in
   Member State, inter alia, with the regulatory               Directive 97/ /EC amending Directives
   functions addressed in this Directive;                      90/387/EEC and 92/44/EEC 0) for the purpose
                                                               of adaptation to a competitive environment in
                                                               telecommunications, entrusted by that Member
                                                               State, inter alia, with the regulatory functions
                                                               addressed in this Directive;
                                                             (')OJL 165. 19.6.1992. p. 27
                                          Article 3, second paragraph
                                        (based on EP amendment 10)
Where these services cannot be commercially                  Where these services cannot be commercially
provided on the basis of conditions laid down by the         provided on the basis of conditions laid down by the
Member State, Member States may set up universal             Member State, Member States may set up a
service schemes for the shared financing of these            universal service financing scheme, in conformity
services, in conformity with Community law.                  with Community law.
                                                             Member States mav to some extent impose
                                                             additional universal service requirements. Such
                                                             additional requirements mav not, under anv
                                                             circumstances whatever, have an impact on the
                                                             costing of universal service provision as laid down
                                                             in Community law and mav not be financed from a
                                                             mandatory contribution bv market plavers.
                                                   -9
 ---pagebreak---                     Original text                        ______                Amended text
                                                   Article 4(2)
                                        (based on EP amendment 14)
2. Member States shall publish regular reports on           2. Member States shall publish regular reports on
   the evolution of tariffs.                                   the evolution of tariffs. The Commission shall
                                                               publish regular reports on the evolution of tariffs
                                                               throughout the European Community.
                                                Article 6(1) (b)
                                        (based on EP amendment 17)
(b) directories of all subscribers who consent to be        (b) directories of all subscribers who have not
    listed, includingfixedand personal numbers, are             expressed opposition to being listed, including
    available to users in printed and where          fixed            and personal numbers, are available to
    appropriate, electronic form, and updated on a              users in printed and where appropriate,
    regular basis;                                              electronic form, and updated on a regular basis;
                                                   Article 7(2)
                                        (based on EP amendment 20)
2. Member States shalh-ensure that it is possible to        2. Member States shall ensure that it is possible to
   make emergency calls from public payphones                  make emergency calls from public payphones
   using the single European emergency call number        •* and where they exist public pav text telephones
   '112* referred to in Decision 91/396/EEC, and                using the single European emergency call number
   other national emergency numbers, all free of               '112' referred to in Decision 91/396/EEC, and
   charge.                                                     other national emergency numbers, all free of
                                                               charge and without having to make use of coins
                                                               or cards.
                                                  Article 9 (b)
                                        (based on EP amendment 22)
(b) access operator assistance services, and                (b) access operator assistance services at a
    directory enquiry services in accordance with               reasonable price, and directory enquiry services
    Article 6;                                                  in accordance with Article 6;
                             Article 10(2), second subparagraph a and b (new)
                                        (based on EP amendment 25)
                                                            Alterations mav be called for insofar as thev
                                                            concern the protection of the rights of users and/or
                                                            subscribers as foreseen bv this Directive.
                                                            The Commission shall ensure that the alterations
                                                            called for do not interfere with fair competition on
                                                            the market.
                                                  - 10
 ---pagebreak---                    Original text                                               Amended text
                                               Article 15(4) (new)
                                         (based on EP amendment 30)
                                                           4. Where the facility of number portability, as
                                                               referred to in Article 12(5) of Directive 97/ /EC
                                                               on interconnection in telecommunications with
                                                               regard to ensuring universal service and
                                                               interoperability through application of the
                                                               principles of open network provisionvis not vet in
                                                               use, national regulatory authorities shall ensure
                                                               that for a reasonable period after a subscriber
                                                               has changed supplier either a telephone call to his
                                                               old number can be re-routed to his new number
                                                               or callers are given at no additional cost to them
                                                               an indication of the new number.
                                                              National regulatory authorities shall ensure that
                                                               any fees for such re-routing of calls are
                                                               reasonable.
                                                  Article 16(1)
                                         (based on EP amendment 31)
1. National regulatory authorities shall ensure that        1. National regulatory authorities shall ensure that
   the organisations with significant market power             the organisations with significant market power
   in the provision of fixed public telephone,                 in the provision offixedpublic telephone
   networks deal with reasonable requests from                 networks deal with reasonable requests from
   organisations providing telecommunications                  organisations providing telecommunications
   services for access to thefixedpublic telephone             services for access to thefixedpublic telephone
   network at network termination points other than            network at network termination points other than
   the commonly provided network termination                   the commonly provided network termination
 'points referred to in part 1 of Annex II.                    points referred to in part 1 of Annex II. This
                                                               obligation mav only be limited if there are
                                                               technically and commercially viable alternatives
                                                               to the special access requested, and if the
                                                               requested access is inappropriate in relation to
                                                               the resources available to meet the request.
                                                    11
 ---pagebreak---                 Original text                                              Amended text
                                               Article 16(9)
                                     (based on EP amendment 33)
Details of agreements for special network access        9. Details of the agreements for special network
shall be made available to the national regulatory         access referred to in paragraph 3 shall be made
authority upon its request.                                available to the national regulatory authority
                                                           upon its request and mav be made available on
                                                           request to interested parties, with the exception
                                                           of those parts which deal with the commercial
                                                           strategy of the parties.
                                               - 12-
 ---pagebreak---  ---pagebreak---  ---pagebreak---                                                                   ISSN 0254-1475
                                                           COM(97) 287 final
                                              DOCUMENTS
EN                                                                       15 10
                                    Catalogue number : CB-CO-97-276-EN-C
                                                             ISBN 92-78-21165-6
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