CELEX: 51996PC0121
Language: en
Date: 1996-03-20
Title: Amended proposal for a EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE on interconnection in telecommunications with regard to ensuring universal service and interoperability through application of the principles of Open Network Provision (ONP)

COMMISSION OF THE EUROPEAN COMMUNITIES
                                              Brussels,20.03.1996
                                              COM(%) 121 final
                                              95/0207 (COD)
                          Amended proposal for a
      EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE
on interconnection in telecommunications with regard to ensuring universal service
    and interoperability through application of the principles of Open Network
                                  Provision (ONP)
      (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 Interconnection in Telecommunications with regard to
     ensuring universal service and interoperability through application of the principles
     of Open Network Provision (ONP). 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 19.07.95, and it was formally transmitted
    to the EP and the Council on 12.09.951.
    The Economic and Social Committee gave a favourable Opinion on 28.02.962. The
    European Parliament adopted a favourable Resolution at its First Reading on
     14.02.96, and proposed 69 amendments to the Commission proposal3.
b)     Purpose of the Directive
    This Directive is an essential component of the regulatory framework for the future
    liberalised telecommunications sector, to be in place by 1.1.98.
    It will enable new market entrants to access existing business and residential
    customers, on a basis which will encourage increased investment and market growth
    in the telecommunications services sector, within a predictable and stable regulatory
    environment. At the same time, it will put in place safeguards to ensure
    interconnection and interoperability of networks and services so that users may
    increasingly benefit from the European wide provision of universal
    telecommunications services.
    The Directive lays down harmonized principles for interconnection to be
    implemented at a national level, under supervision of the national regulatory
    authorities, in accordance with the principle of subsidiarity.
1
       OJ C 313, 24.11.1995, p.7
2
       TRA/301 ,28.02.1996
3
       A4-0017/96, PV 14-02-96
                                           -2-
 ---pagebreak--- 2.      EP amendments accepted by the Commission
Of the 69 amendments adopted by the European Parliament at First Reading, the
Commission accepted 28 in full, 13 in part, and 4 in principle (ie with some
reformulation of the text), making a total of 45.
Amendments accepted in full          :        1, 2, 5, 8, 11, 14, 20, 22, 24, 28, 29, 33, 39, 40, 42,
                                              43, 44, 46, 47, 48, 52, 56, 58, 63, 64, 65, 66, 67
Amendments accepted in part          :        3, 4, 6, 9, 12, 15, 26, 32, 36, 37, 45, 49, 57,
Amendments accepted in principle :           23, 51, 53, 68
The Commission accepted those amendments which:
     - re-inforce the importance of ensuring universal service, and a single European
        telecommunications market;
     - concern number portability;
     - emphasise the need for protection of the environment;
     - increase transparency and ensure reasonable confidentiality;
     - call for increased coordination between national regulatory authorities and
        between national regulatory authorities and the Commission;
     - clarity the text in a manner consistent with the aims of the Directive;
     - call for an examination of the possibility of a European regulator)' authority for
        telecommunications, as part of the review of the Directive during 1999;
     - are consistent with other EU legislation.
3.      Amendments not accepted by the Commission
 The Commission has not accepted 24 of the 69 amendments proposed by the European
Parliament. The reasons are given below, where the amendments are grouped into 11
broad categories.
Scope of the Directive
(Amendments 13, 15 (part), 55)
The Directive concerns interconnection to public telecommunications networks and
services. Amendment 13 would restrict the scope of the Directive to interconnection
between public networks of the same type, and is inconsistent with part of amendment 1
On the other hand, amendment 15 (first part) would expand the scope of the Directive
too far by extending the requirement for confidentiality to al] telecommunications
networks (public and private).
The Directive concerns interconnection within the Community, as set out in Article 1.
Amendment 55 is therefore outside the scope of the Directive.
                                             -3-
 ---pagebreak--- World Trade Organisation (WTO) negotiations on basic telecommunications
services
(Amendments 10, 54)
Negotiations on multilateral agreements for comparable and effective access to third
country markets are currently underway in the context of the World Trade Organisation
negotiations in Geneva. Amendment 10 is inappropriate as the Directive is due to be
adopted after the conclusion of the WTO negotiations scheduled for April 1996.
Amendment 54 would place inappropriate constraints on the action to be taken in the
case of a lack of agreement at a multilateral level.
Accounting separation
(Amendments 6(part), 34, 35, 37, 38, 60)
Amendments 6 (second part), 34, 35, 37 (second part) would replace the requirement
for full accounting separation in Article 8 by a weaker requirement for transparent cost
accounting systems. The Commission proposal represents a careful balance between the
differing needs of the existing operators, the new entrants and the national regulatory
authorities; this amendment would tip that balance in favour of the existing operators,
while also adding to the supervisory load of the national regulatory authorities.
Amendments 38 and 60 could lead to inconsistency with Commission Directive
95/51/EC 4 on the use of cable television networks for the provision of already liberalised
telecommunications services, by proposing an additional threshold for accounting
separation
National regulatory authorities
(Amendments 16, 41)
The need for independence of the national regulatory authorities as expressed in
amendment 41 is being dealt with elsewhere, in the proposed adaptation of the ONP
framework Directive (see COM(95) 543).
The possibility for the national regulatory authority to extend obligations for
interconnection, as referred to in Amendment 16, is already foreseen in Article 9.6.
Universal service
(Amendments 3(parts), 17, 18, 19, 26(part), 31, 32(part), 57(parts), 59, 62, 69)
Services which cannot at present be made available to all users everywhere cannot be
accepted as part of a universal service obligation, at least for the time being.. Hence
amendments 3 (second part) and 57 (first and second parts) are not accepted.
Amendments 17 (first part) and 18 are not accepted because they would reduce the
flexibility in the financing of universal service, by requiring Member States to set up a
universal service fund.
          OJ L 256, 26.10.1995, p.49
                                                4-
 ---pagebreak--- Amendments 3 (last part) and 17 (second part) would provide for contributions to the
cost of the universal service obligations to be shared between all operators of
telecommunications networks (instead of only public networks). This would be unfair on
those networks which already contribute to the cost of the universal service through
payment of standard tariffs.
Amendment 19 would suppress the reference to market benefit for organisations with
universal service obligations. This is an important factor to be taken into account when
assessing the net burden*of universal service obligations.
Amendments 26 (third part), 31, 32 (second part) and 59 could increase the cost of
market entry to new players and decrease incentives to remove tariff imbalances between
local and long distance calls. They would have the effect of reducing the clear distinction
between interconnection charges and contributions to universal service obligations.
Amendment 62 would reduce the role of the national regulatory authority in overseeing
contributions to universal service costs.
The Commission's forthcoming Communication on Universal Service For
Telecommunications means that amendment 69 is notappropriate.
Dispute resolution
(Amendments 25, 49(part), 50)
Amendment 25 was not accepted because amendment 51, accepted in principle, already
covers the question of damages in the context of dispute resolution, and retrospective
adjustments in charges are already foreseen in 9(2) of the Directive.
Amendment 49 (second part) cannot be accepted as the principles in Article 9(1) are an
important reference for dispute resolution.
Amendment 50 would allow a dispute to be pursued simultaneously in national courts
and at EU level, and could result in two different outcomes. This does not provide legal
certainty.
Review of the Directive
(Amendment 12 (part))
There are provisions in the Directive which will need to remain even after achievement of
full competition, in particular those concerning universal service and dispute resolution.
The second part of Amendment 12 is therefore not accepted.
Commission guidelines
(Amendments 7(part), 21, 30, 36(part), 61)
Guidelines are considered the most appropriate tool for addressing complex financial
issues, in that they are flexible and more easily updated than Directives. The committee
procedure proposed will ensure that the guidelines have the backing of Member States.
Amendments 7 (first part), 21, 30, 36 (second part), 61 would change the nature of the
guidelines and/or extend their scope.
                                               5-
 ---pagebreak--- Definition of significant market power
(Amendment 4 (parts))
The deletions proposed in Amendment 4 cannot be accepted as they are important
factors for assessing if an organisation has significant market power. The existence of
alternative means of access to the market does not justify immediate removal of
obligations on those with significant market power.
Collocation and facility sharing
(Amendments 9 (parts) and 45 (parts))
Amendments 9 and 45 would result in too rigid a framework for collocation and facility
sharing, in particular in the area of costing. These are issues which demand a certain
flexibility of approach in order to decide where the public interest lies. Amendment 45
would remove the requirement for public consultation.
Other amendments
(Amendment 7(part), 26(part), 27)
Amendments 26 (first part) and 27 would result in inconsistent terminology with other
ONP Directives.
Amendment 7 (second part) cannot be accepted as the interconnection point is not
always the choice of the organisation providing interconnection.
4. Conclusion
The Commission has accepted 45 of the 69 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 interconnection in telecommunications with regard to ensuring
                universal service and interoperability through application of
                       the principles of Open Network Provision (ONP)
                     Original text                                             Amended text
                                                   Recital 1
Whereas from 1 January 1998 (with transition              Whereas from 1 January 1998 (with, subject to
periods for certain Member States) the provision of       certain conditions, the possibility of transition
telecommunications services and infrastructure in         periods in some Member States) the provision of
the Community will be liberalized; whereas the            telecommunications services and infrastructure in
Council's Resolution of 7 February 1994 on                the Community will be liberalized; whereas in
universal      service      principles      in   the      order        to      promote        Community-wide
telecommunications sector^ recognizes that in             telecommunications services there is a need to
order       to       promote         Community-wide       ensure interconnection of networks           between
telecommunications services there is a need to            different national and Community operators;
ensure interconnection of public networks and, in         whereas Council Directive 90/387/EEC of 28 June
the future competitive environment, interconnection        1990 on the establishment of the internal market for
between different national and Community                  telecommunications       services     through     the
operators; whereas Council Directive 90/387/EEC           implementation of open network provision (ONP)(4)
of 28 June 1990 on the establishment of the internal      lays down harmonized principles for open and
market for telecommunications services through the        efficient access to, and use of, public
implementation of open network provision (ONP)(4)         telecommunications       networks      and,    where
lays down harmonized principles for open and              applicable, services; whereas the Council's
efficient access to, and use of, public                   Resolution of 22 July 1993 on the review of the
telecommunications       networks      and,    where      situation in the telecommunications sector and the
applicable, services; whereas the Council's               need for further development in that market(5)
Resolution of 22 July 1993 on the review of the            recognizes that open network provision measures
situation in the telecommunications sector and the         provide an appropriate framework for harmonizing
need for further development in that markct(5)             interconnection conditions;
recognizes that open network provision measures
provide an appropriate framework for harmonizing
interconnection conditions;
                                                    7-
 ---pagebreak---                                                    Recital 4
Whereas, following the removal of special and             Whereas, following the removal of special and
exclusive rights for telecommunications services          exclusive rights for telecommunications services
and infrastructure in the Community, the provision        and infrastructure in the Community, the provision
of telecommunications networks or services may            of telecommunications networks or services may
require some form of authorization by Member              require some form of authorization by the relevant
States; whereas all organizations authorized to           public authority, in accordance with the subsidiarity
provide public telecommunications networks or             principle; whereas all organizations authorized to
public telecommunications services in all or part of      provide public telecommunications networks or
the Community should be free to negotiate                 public telecommunications services in all or part of
interconnection agreements on a commercial basis          the Community should be free to negotiate
in accordance with Community law, subject to              interconnection agreements on a commercial basis
supervision and intervention by national regulatory       in accordance with Community law, subject to
authorities; whereas it is necessary to ensure            supervision and intervention by the relevant
adequate interconnection within the Community of          authorities; whereas it is necessary to ensure
certain networks and services essential for the           adequate interconnection within the Community of
social and economic well-being of Community               certain networks and services essential for the
users, notably public telephone networks and              social and economic well-being of Community
services, and leased lines;                               users, notably public telephone networks and
                                                          services, and leased lines;
                                                  Recital 6
Whereas the Resolution of 7 February 1994 sets            Whereas obligations for the provision of universal
out conditions for financing a universal voice            service contribute to the Community objective of
telephony service; whereas obligations for the            socio-economical cohesion and territorial equity;
provision of universal service contribute to the          whereas the aim should be to introduce new
Community objective of socio-economical cohesion          technologies like the integrated services digital
and territorial equity; whereas there may be more         network (ISDN) as soon as possible and on as
than one organization in a Member State with              broad a basis as possible in the Member States;
universal service obligations; whereas the                whereas the current level of deployment of ISDN in
calculation of the net cost of universal service          Member States means that it cannot be made
should take due account of costs and revenues, as         available to all users everywhere and therefore it
well as economic externalities and the intangible         cannot at present be subject to a universal service
benefits resulting from providing universal service       obligation; whereas there may be more than one
but, in order not to hinder the on-going process of       organization in a Member State with obligations of
tariff rebalancing, should not include elements           providing universal service; whereas the calculation
which are due to historic tariff imbalances; whereas      of the net cost of universal service should take due
costs of universal service obligations should be          account of costs and revenues, as well as economic
calculated on the basis of transparent procedures;        externalities and the intangible benefits resulting
whereas financial contributions related to the            from providing universal service but, in order not to
sharing of universal service obligations should be        hinder the on-going process of tariff rebalancing,
unbundled from charges for interconnection;               should not include elements which arc due to
                                                          historic tariff imbalances, given that the fixed costs
                                                          associated with the existing network are at present
                                                          partly taken into account in the tariff shared by all
                                                          users of that network; whereas costs of universal
                                                          service obligations should be calculated on the basis
                                                          of transparent procedures; whereas financial
                                                          contributions related to the sharing of the cost of
                                                          universal service obligations should be unbundled
                                                          from charges for interconnection;
 ---pagebreak---                                                      Recital 7
Whereas it is important to lay down principles to           Whereas it is important to lay down principles to
guarantee transparency, access to information, non-         guarantee transparency, access to information, non-
discrimination and equality of access, in particular        discrimination and equality of access, in particular
for organizations with significant market power;            for organizations with significant market power;
whereas the market power of an organization                 whereas the market power of an organization
depends on a number of factors including its share          depends on a number of factors including its share
of the relevant product or service market in the            of the relevant product or service market in the
relevant geographical market, its turnover relative         relevant geographical market, its turnover relative
to the size of the market, its ability to influence         to the size of the market, its ability to influence
market conditions, its control of the means of              market conditions, its control of the means of
access to end-users,         its access to financial        access to end-users, its international links, its
resources, its experience providing products and            access to financial resources, its experience
services in the market; whereas, for the purpose of         providing products and services in the market;
this Directive, an organization with a share of more        whereas, for the purpose of this Directive, an
than 2 5 % of a particular telecommunications               organization with a share of more than 2 5 % of a
market in the geographical area in a Member State           particular telecommunications market in the
within which it is authorized to operate would be           geographical area in a Member State within which
presumed to enjoy significant market power, unless          it is authorized to operate would be presumed to
its national regulatory authority determined that this      enjoy significant market power, unless the relevant
was not the case; whereas, for an organization              regulatory authority determined that this was not
foiling below this threshold market share, the              the case; whereas, for an organization falling below
national regulator^' authority may nevertheless             this threshold market share, the relevant regulatory
determine that the organization enjoyed significant         authority may nevertheless determine that the
market power;                                               organization enjoyed significant market power;
                                                    Recital 8
Whereas pricing for interconnection is a key factor         Whereas pricing for interconnection is a key factor
to determine the structure and the intensity of             to determine the stmcture and the intensity of
competition in the transformation process towards a         competition in the transformation process towards a
liberalized market;      whereas organizations with         liberalized market;     whereas organizations with
significant market power must be able to                    significant market power must be able to
demonstrate that their interconnection charges are          demonstrate that their interconnection charges are
set on the basis of objective criteria and follow the       set on the basis of objective criteria and follow the
principles of transparency and cost orientation, and        principles of transparency and cost orientation, and
arc sufficiently unbundled in ternis of network and         arc sufficiently unbundled in terms of network and
service elements offered; whereas publication of a          service elements offered; whereas publication of a
list of interconnection services and charges                list of interconnection services, charges, terms and
enhances the necessary transparency and non-                conditions enhances the necessary transparency and
discrimination; whereas flexibility in the methods of       non-discrimination; whereas flexibility in the
charging for interconnection traffic should be              methods of charging for interconnection traffic
possible,    including    capacity-based     charging;      should be possible, including capacity-based
whereas the level of charges should promote                 charging; whereas the level of charges should
productivity and encourage efficient and sustainable        promote productivity and encourage efficient and
market entry, and should not be below a limit               sustainable market entry, and should not be below a
calculated by the use of long-run incremental cost          limit calculated by the use of long-run incremental
and cost allocation and attribution methods based           cost and cost allocation and attribution methods
on actual cost causation, nor above a limit set by          based on actual cost causation, nor above a limit
the     stand-alone     cost    of    providing    the      set by the stand-alone cost of providing the
interconnection m question;                                 interconnection m question;
 ---pagebreak---                                                      Recital 9
  Whereas appropriate accounting            separation       Whereas where an organization enjoys significant
 between interconnection activities and other                market power, appropriate accounting separation
 activities ensures transparency of internal cost-           between interconnection activities and other
 transfers; whereas, where an organization with              activities ensures transparency of internal cost-
 special or exclusive rights in a non-                       transfers; whereas, where an organization with
 telecommunications        field    also      provides       special or exclusive rights in a non-
 telecommunications services, accounting separation          telecommunications        field    also      provides
 is an appropriate means to discourage unfair cross-         telecommunications services, accounting separation
 subsidies;                                                  is an appropriate means to discourage unfair cross-
                                                             subsidies;
                                                    Recital 11
 Whereas,       in   accordance     with     Directive      Whereas,       in   accordance      with     Directive
 90/387/EEC, the essential requirements upon which           90/387/EEC, the essential requirements upon which
 restrictions on access to and usage of public               restrictions on access to and usage of public
telecommunications networks or services are                 telecommunications networks or services are
justified are limited to security of network                justified are limited to security of network
operations, maintenance of network integrity,               operations, maintenance of network integrity,
 interoperability of services in justified cases, and       interoperability of services in justified cases, and
protection of data as appropriate;                          protection of data as appropriate; whereas the
                                                            reasons for these restrictions must be made public;
                                                    Recital 12
Whereas facility-sharing can be of benefit for town         Whereas facility-sharing can be of benefit for town
planning, environmental, economic or other reasons,         planning, environmental, economic or other reasons,
and should be encouraged by national regulatory             and should be encouraged by national regulatory
authorities on the basis of voluntary agreements;           authorities on the basis of voluntary agreements;
whereas compulsory facility-sharing may be                  whereas compulsory facility-sharing may be
appropriate in some circumstances, but should be            appropriate in some circumstances, but should be
imposed on organizations only after full public             imposed on organizations only after full public
consultation; whereas virtual collocation may               consultation; whereas virtual collocation may in
provide a satisfactory alternative to physical              normal circumstances provide a satisfactory
collocation of telecommunications equipment;                alternative      to    physical     collocation     of
                                                            telecommunications equipment;
                                                    Recital 22
Whereas the essential goal of interconnection of            Whereas the essential goal of interconnection of
networks and services throughout the Community              networks and services throughout the Community
and the provision of trans-European networks and            and the provision of trans-European networks and
services cannot be realized satisfactorily at Member        services cannot be realized satisfactorily at Member
State level, and is better achieved at Community            State level, and is better achieved at Community
level by this Directive;                                    level by this Directive; whereas it may appear
                                                            desirable, when this Directive is reviewed, io
                                                            envisage the possibility of establishing a European
                                                            Regulatory Authority to ensure those tasks carried
                                                            out by the Commission or the National Regulatory
                                                            Authority according to this Directive, which would
                                                            be more efficiently fulfilled through such a
                                                            European Regulatory Authority;
                                                    10
 ---pagebreak---                                                   Article 1 par. 1
This Directive establishes a regulatory framework             This Directive establishes a regulatory framework
for securing the interconnection and interoperability         for securing the interconnection and interoperability
of telecommunications networks and services in the            of telecommunications networks and services in the
Community, in an environment of open and                      Community and ensuring universal service, in an
competitive markets.                                          environment of open and competitive markets.
                                             Article 2 par. 1(h) (new)
                                                              "universal service" means a defined minimum
                                                              service or set of services of specified quality which
                                                              is accessible to all users everywhere and, in the
                                                              light of specific national conditions, at an
                                                              affordable price.
                                                  Article 3 par. 1
Member States shall take all necessary measures to            Member States shall take all necessary measures to
remove any restrictions which prevent organizations           remove any restrictions which prevent organizations
authorized     by Member States to provide                    authorized     in Member         States to      provide
telecommunications              networks            and       telecommunications              networks            and
telecommunications services from             negotiating      telecommunications services from             negotiating
interconnection agreements between themselves in              interconnection agreements between themselves in
accordance      with    Community       law.        The       accordance      with    Community       law.        The
organizations concerned may be in the same                    organizations concerned may be in the same
Member State or in different Member States.                   Member State or in different Member States.
Technical and commercial arrangements for                     Technical and commercial arrangements for
interconnection shall be a matter for agreement               interconnection shall be a matter for agreement
between the parties involved, subject to the                  between the parties involved, subject to the
provisions of this Directive and the competition              provisions of this Directive and the competition
rules of the Treaty.                                          rules of the Treaty.
                                                   Article 3 par. 3
Member States shall ensure that organizations who             Member States shall ensure that organizations who
interconnect      their     facilities    to     public       interconnect      their     facilities    to     public
telecommunications       networks      and/or    public       telecommunications       networks      and/or    public
telecommunications services respect at all times the          telecommunications services respect at all times the
confidentiality of information transmitted or stored.         confidentiality of information transmitted or stored i
                                                              except when required by their national law for the
                                                              protection of public order.
                                                  Article 5 par. 5
Where the mechanisms referred to in paragraph 4               Where a mechanism for sharing the net cost of
are established, national regulator}' authorities shall       universal service obligations as referred to in
ensure that the principles for cost sharing, and              paragraph 4 is established, national regulatory
details of the mechanism used, are open to public             authorities shall ensure that the principles for cost
inspection in accordance with Article 14(2).                  sharing, and details of the mechanism used, are
                                                              open to public inspection in accordance with Article
                                                               14(2).
                                                       11 -
 ---pagebreak---                                                    Article 6 par. 1
 For       interconnection       to      the     public        For        interconnection       to     the   public
 telecommunications         networks      and    public        telecommunications         networks      and  public
 telecommunications services identified in Annex I             telecommunications services identified in Annex I
 provided by organizations which have been notified            provided by organizations which have significant
 by national regulatory authorities as having                 market power, Member States shall ensure that:
significant market power, Member States shall
ensure that:
                                                    Article 6(d)
interconnection agreements are open to public                 interconnection agreements and changes to them are
inspection, in accordance with Article 14(2), with            communicated to the relevant national regulatory
the exception of those parts which deal with the              authorities and the Commission, and made available
commercial strategy of the parties. In every case,            on request to interested parties, in accordance with
details of interconnection charges and any                    Article 14(2), with the exception of those parts
contributions to universal service obligations shall          which deal with the commercial strategy of the
be published.                                                 parties. The national regulatory authority shall
                                                              decide which parts deal with the commercial
                                                              strategy of the parties. In every case, details of
                                                              interconnection charges, terms and conditions and
                                                              any contributions to universal service obligations
                                                              shall be made available on request to interested
                                                              parties.
                                                Article 6(e) (new)
                                                              Information received from an organization seeking
                                                              interconnection shall be used only for the purpose
                                                              for which it was supplied. It shall not be passed on
                                                              to other departments, subsidiaries or partners for
                                                              whom such information could provide a competitive
                                                              advantage.
                                                 Article 7 par. 3
Charges for interconnection shall be based on the             Charges for interconnection shall be based on the
costs of providing the interconnection services               costs of providing the interconnection services
requested, and shall normally contain the following           requested, and shall normally contain the following
elements, each of which should be itemized                    elements, each of which should be itemized
separately:                                                   separately:
- a charge to cover re-imbursement of the one-                -    a charge to cover re-imbursement of the one-
    time costs incurred in providing the specific                 time costs incurred in providing the specific
    elements of the interconnection requested; (i.e.              elements of the interconnection requested; (i.e.
    the initial cost of any engineering work needed to            the initial and subsequent cost of any
    provide the interconnection facilities requested);            engineering work needed to provide the
                                                                   interconnection facilities requested);
    usage charges related to the utilisation of the           - usage charges related to the utilisation of the
    network elements and resources requested.                     network elements and resources requested.
    These may include capacity-based charges                      These may include capacity-based charges
    and/or traffic related charges;                               and/or traffic related charges;
                                                     12
 ---pagebreak--- Annex IV indicates, for information only, the types         Annex IV indicates the types of costs that may be
of costs that may be included in each of these tariff       included in each of these tariff elements. Where
elements. Where other tariff elements are applied,          other tariff elements are applied, these must be
these must be transparent and based on objective            transparent and based on objective criteria, and
criteria, and approved by the national regulatory           approved by the national regulatory authority.
authority.
Charges for interconnection may include bulk                Charges for interconnection may include bulk
discount schemes. In some cases, these may be               discount schemes. In some cases, these may be
available only to organizations identified in Annex         available only to organizations identified in Annex
II. Such schemes shall be based on objective                II. Such schemes shall be based on objective
criteria and applied in a non-discriminatory manner.        criteria and applied in a non-discriminatory manner.
                                                Article 7 par. 5
National regulatory authorities shall ensure the            National regulatory authorities shall ensure the
publication, in accordance with Article 14(1), of a         publication, in accordance with Article 14(1), of
list of interconnection services and associated tariffs     terms and conditions for interconnection. This shall
broken down into components, according to market            include a list of interconnection services and
needs.                                                      relevant tariffs broken down into components,
                                                            according to market needs.
                                            Article 7 par. 5a (new)
                                                            In order to provide a common basis for the
                                                            derivation of interconnection charges. the
                                                            Commission shall draw up. acting in accordance
                                                            with the procedure in Article 15, guidelines on cost
                                                            accounting systems in relation to interconnection.
                                                 Article 7 par. 8
Member States shall ensure that published                   Member States shall ensure that published
interconnection charges and charges related to the          interconnection charges, terms and conditions, and
sharing of the cost of universal service obligations        charges related to the sharing of the cost of
arc made available to the ONP Committee at the              universal service obligations are made available to
request of the Commission.                                  the ONP Committee at the request of the
                                                            Commission.
                                                 Article 7 par. 9
In order to provide a common basis for the                   (deleted)
derivation of interconnection           charges, the
Commission shall, if necessary, draw up, acting in
accordance with the procedure laid dowTi in Article
 15, recommendations on cost accounting systems in
 relation to interconnection.
                                                      13
 ---pagebreak---                                             Article 8 par. 3a (new)
                                                            The Commission shall, acting in accordance with
                                                            the procedure laid down in Article 15. draw up
                                                            guidelines on accounting separation in relation to
                                                            interconnection.
                                                Article 8 par. 4
The financial accounts of organizations providing          The financial accounts of organizations providing
public telecommunications networks or public               public telecommunications networks or public
telecommunications services shall be drawn upa             telecommunications services shall be drawn up,
published and submitted to independent audit. The          submitted to independent audit and published. The
audit shall be carried out in accordance with the          audit shall be carried out in accordance with the
relevant rules of national legislation.                    relevant rules of national legislation, and its results
                                                           shall be made public.
The first subparagraph shall also apply to the             The first subparagraph shall also apply to the
separate accounts required in paragraphs 1 and 2.          separate accounts established as required in
                                                           paragraphs 1 and 2.
                                                Article 8 par. 6
Where appropriate, the Commission shall, acting in         (deleted)
accordance with the procedure laid down in Article
 15. draw up guidelines on accounting separation in
relation to interconnection.
                                                Article 9 par. 1
National regulatory' authorities shall encourage and       National regulatory authorities shall encourage and
secure adequate interconnection in the interests of        secure adequate interconnection in the interests of
all users, exercising their responsibility in a way        all users, exercising their responsibility in a way
that provides maximum economic efficiency and              that provides maximum economic efficiency and
gives the maximum benefit to end-users.                    gives the maximum benefit to end-users.
In particular, national regulatory authorities shall       In particular, national regulatory authorities shall
take into account:                                         take into account:
    the need to ensure satisfactory        end-to-end          the need to ensure satisfactory        end-to-end
    communications for users;                                  communications for users;
    the need to stimulate a competitive market;                the need to stimulate a competitive market;
                                                              _the need to ensure the fair and proper
                                                               development of a seamless harmonious
                                                               European telecommunication home market, thus
                                                               coordinate their policies, guidelines and actions
                                                               with their counterparts in other Member States
                                                               and .with the Commission;
                                                    14
 ---pagebreak---     the need to promote the establishment            and          the need to promote the establishment"           and
    development of trans-European networks           and          development of trans-European networks           and
    services,     and    the     interconnection     and          services, and the            interconnection    and
    interoperability of national networks           and           interoperability of national networks            and
    services, as well as access to such networks    and           services, as well as access to such networks    and
    services;                                                     services;
    the principles of non-discrimination (including               the principles of non-discrimination (including
    equal access) and proportionality;                            equal access) and proportionality;
    the need to maintain the universal service.                   the need to maintain the universal service.
                                                   Article 9 par. 5
In the event of an interconnection dispute between            In the event of an interconnection dispute between
organizations operating under authorizations                  organizations operating under authorizations
granted by the same Member State, the national                granted by the same Member State, the national
regulatory authority of that Member State shall, on           regulatory authority of that Member State shall, on
request of either party, take steps with a view to            request of either party, take steps with a view to
resolving the dispute.                                        resolving the dispute.
In so doing, the national regulatory authority shall          In so doing, the national regulatory authority shall
take into account, inter alia:                                take into account, inter alia:
   the user interest,                                        - the user interest,
                                                             - the need to maintain a universal service,
   regulatory obligations or constraints imposed on          -   regulatory obligations or constraints imposed on
   any of the parties,                                           any of the parties,
   the desirability of stimulating innovative market         - the desirability of stimulating innovative market
   offerings, and of providing users with a wide                 offerings, and of providing users with a wide
   range of telecommunications services at a                     range of telecommunications services at a
   national and at a Community level,                            national and at a Community level,
   the availability of technically and commercially          - the availability of technically and commercially
   viable alternatives to the interconnection                    viable alternatives to the interconnection
   requested,                                                    requested,
   the desirability    of ensuring equal         access      - the desirability       of ensuring      equal   access
   arrangements,                                                 arrangements,
   the need to maintain the integrity of the public          - the need to maintain the integrity of the public
   telecommunications        network       and      the          telecommunications        network       and      the
   interoperability of services,                                 interoperability of services,
   the nature of the request in relation to the              - the nature of the request in relation to the
   resources available to meet the request,                      resources available to.meet the request,
   the relative market positions of the parties,             - the relative market positions of the parties,
   the public interest (e.g. the protection of the           - the public interest (e.g. the protection of the
   environment).                                                 environment).
                                                      -15-
 ---pagebreak---                                             Article 9 par. 6a (new)
                                                           National regulatory authorities shall provide help
                                                           and assistance to their counterparts in other
                                                           Member States whenever required in order to
                                                           implement this Directive. The Commission may at
                                                           any time request a National regulatory authority to
                                                           intervene on specific issues. National Regulatory
                                                           Authorities shall take due account of the
                                                           Commission's request and inform the Commission
                                                           in detail and without undue delay of the steps taken.
                                              Article 10(e) (new)
                                                           Protection of the environment : Member States may
                                                           impose conditions in interconnection agreements in
                                                           order to ensure the protection of environment or
                                                           comply with objectives of town planning, and in
                                                           particular to impose physical collocation of lines
                                                           and ducts. The need to protect the environment
                                                           does not constitute a valid reason for refusal_to
                                                           negotiate terms of interconnection.
                                                Article 11 par. 1
Where an organization is granted a general right           Where an organization is granted a general right
under national legislation to install facilities for       under national legislation to install facilities for
telecommunications purposes on, over or under              télécommunications purposes on, over or under
public or private land, or may take advantage of a         public or private land, or may take advantage of a
procedure for the expropriation or use of property         procedure for the expropriation or use of property
for    telecommunications       purposes,     national     for     telecommunications      puq^oses,     national
regulatory authorities shall encourage the sharing of      regulatory authorities shall encourage the sharing of
such facilities and property with other organizations      such facilities and property with other organizations
providing public telecommunications services.              providing public telecommunications networks and
                                                           services.
                                                Article 12 par. 2
In order to ensure full interoperability of European-      In order to ensure full interoperability of European-
wide networks and services, Member States shall            wide networks and services, Member States shall
take all necessary steps to ensure the coordination        ensure the coordination of their national positions in
of their national positions in international               international organizations and fora where
organizations and fora where numbering decisions           numbering decisions are taken, taking into account
are taken, taking into account possible future             possible future developments in numbering at a
developments in numbering at a European level.             European level.
                                                     16
 ---pagebreak---                                                   Article 12 par. 3
Member States shall ensure that national                     Member States shall ensure that national
telecommunications numbering plans are controlled            telecommunications numbering plans are controlled
by the national regulatory authority, in order to            by the national regulatory authority, in order to
guarantee       independence     from      organizations     guarantee independence          from     organizations
providing public telecommunications networks or              providing public telecommunications networks or
public telecommunications services. In order to              public telecommunications services and facilitate
ensure effective competition, national regulatory            number portability. In order to ensure effective
authorities shall ensure that the procedures for             competition, national regulatory authorities shall
allocating individual numbers and/or numbering               ensure that the procedures for allocating individual
ranges are transparent, equitable and timely and the         numbers and/or numbering ranges are transparent,
allocation is carried out in an objective, transparent       equitable and timely and the allocation is carried
and non-discriminatory manner.                 National      out in an objective, transparent and non-
regulatory authorities may lay down conditions for           discriminatory manner.          National regulatory
the use of certain prefixes or certain short codes, in       authorities may lay down conditions for the use of
particular where these are used for services of              certain prefixes or certain short codes, in particular
general public interest (e.g. freephone services,            where these are used for services of general public
kiosk billed services, directory services, emergency         interest (e.g. freephone services, kiosk billed
services), or to ensure equal access.                        services, directory services, emergency services), or
                                                             to ensure equal access.
                                                  Article 12 par. 5
National regulatory authorities shall encourage the          National regulatory authorities shall encourage the
earliest possible introduction of the facility whereby       earliest possible introduction of the facility whereby
end-users who so request can retain their national           end-users who so request can retain, against a
number at a specific location independent of the             reasonable contribution, their national number at a
organization providing service, and shall ensure that        specific location independent of the organization
this facility is available at least in all major centers     providing service, and shall ensure that this facility
of population before 1 January 2003.                         is available at least in all major centers of
                                                             population before 1 January 2003. If this facility is
                                                             not yet in use, national regulatory authorities shall
                                                             ensure that, once a user has changed supplier, a
                                                             telephone call to his old number is rerouted to the
                                                             user, or that during a reasonable period callers are
                                                             given an indication of the new number.
                                                  Article 16 par. 2
Any party may refer the dispute to the national              Any party may refer the dispute to the national
regulatory authorities concerned. The national               regulatory authorities concerned. The national
regulatory authorities shall coordinate their efforts        regulatory authorities shall coordinate their efforts
in order to bring about a resolution of the dispute,         and shall inform the Commission in order to bring
in accordance with the principles set out in Article         about a resolution of the dispute, in accordance
9(1).                                                        with the principles set out in Article 9(1).
                                                      -17
 ---pagebreak---                                                 Article 16 par. 5
 The position agreed in accordance with the                 The position agreed in accordance with the
 procedure referred to in paragraph 4 shall form the        procedure referred to in paragraph 4 shall form the
 basis of a solution to be implemented at a national        basis of a solution to be implemented at a national
 level without delay. If an agreed position is not          level without delay. If an agreed position is not
 reached, or if an agreed position is not implemented       reached, or if an agreed position is not implemented
 within a reasonable time which shall not, except in        within a reasonable time which shall not, except in
justified cases, exceed two months, the appropriate        justified cases, exceed two months, the appropriate
 solution shall be adopted by the Commission in             solution shall be adopted by the Commission in
accordance with the procedure laid down in Article          accordance with the procedure laid down in Article
 15.                                                        15.      This solution does not prejudice the
                                                            possibilities which exist in national legislation for
                                                            one party to claim in the relevant courts for the
                                                            granting of damages if it appears that the behaviour
                                                           of another party has led to financial losses due to
                                                           distortion of competition. However, issues which
                                                            have been settled at EU level cannot be
                                                            questioned under these claims.
                                               Article 17 par. 2
National regulatory authorities shall notify to the        National regulatory authorities shall notify to the
Commission by 31 January 1997, and immediately             Commission by 31 January 1997, and immediately
thereafter in the event of any change, the names of        thereafter in the event of any change, the names of
those organizations which:                                 those organizations which:
    have universal service obligations for the                 have universal service obligations for the
    provision of the public telecommunications                  provision of the public telecommunications
    networks and services identified in Annex I, Part          networks and services identified in Annex I, Part
    are subject to the provisions of this Directive            are subject to the provisions of this Directive
    concerning organizations with significant market           concerning organizations with significant market
    power;                                                     power;
    are covered by Annex II.                                   are covered by Annex II.
The Commission may request national regulatory             The Commission may request national regulatory
authorities to provide their reasons for classifying       authorities to provide their reasons for classifying
an organization as having significant market power.        an organization as having significant market power
                                                           or for not classifying an organization as such.
                                               Article 19 par. I
Deferment from the obligations under Articles 3(1)         Member States with less developed networks which
and 9(3) may be requested by those Member States           are granted an additional period of up to five years
identified in the Council's Resolution of 22 July          in which to implement all or some of the obligations
 1993 who benefit from an additional transition            under Directive 96/.../EC may request a
period for the liberalization of telecommunications        corresponding deferment of some or all the
services. Deferments granted on these grounds              requirements of Articles 3(1) and 9(3). to the extent
shall not exceed the transition periods set out in the     justified by any special or exclusive rights for
said Resolution.                                           telecommunications services and infrastructure
                                                           allowed under Community law.
 ---pagebreak---                                                Article 19 par. 2
 Deferment from the obligations under Article 12(5)        Deferment from the obligations under Article 12(5)
 may be requested where the Member State                   may be requested where the Member State
 concerned can prove that they would impose an            concerned can prove that they would impose an
excessive burden on certain organizations or classes      excessive burden on certain organizations or classes
of organization.                                           of organization.
The Member State shall inform the Commission of           The Member State shall inform the Commission of
the reasons for requesting a deferment, the date by       the reasons for requesting a deferment, the date by
which the requirements can be met, and the                which the requirements can be met, and the
measures envisaged in order to meet this deadline.        measures envisaged in order to meet this deadline.
The Commission shall consider the request taking          The Commission shall consider the request taking
into account the particular situation in that Member       into account the particular situation in that Member
State and the need to ensure a coherent regulatory         State and the existing possibilities of otherwise
environment at a Community level, and shall info mi       meeting the requirements, and shall inform the
the Member State whether it deems that the                Member State whether it deems that the particular
particular situation in that Member State justifies a     situation in that Member State justifies a deferment
deferment and, if so, until which date such               and, if so, until which date such deferment is
deferment is justified.                                   justified.
                                               Article 21 par. 2
The Commission shall examine and report to the            The Commission shall examine and report to the
European Parliament and to the Council on the             European Parliament and to the Council on the
functioning of this Directive, on the first occasion      functioning of this Directive, on the first occasion
not later than 31 December 2000. For this purpose,        not later than 31 December 1999. For this purpose,
the Commission may request information from the           the Commission may request information from the
Member States. Where necessary, further measures          Member States. Where necessary, the report shall
can be proposed in the report for the full                examine what provisions of this Directive should be
implementation of the aims of this Directive.             adapted in the light of the developments in the
                                                          market. Further measures can be proposed in the
                                                          report for the full implementation of the aims of this
                                                          Directive; in particular, the report shall examine
                                                          the possibility of establishing a European regulatory
                                                          authority to ensure those tasks carried out by the
                                                          Commission or the national regulatory authorities
                                                          according to this Directive, which would be more
                                                          efficiently fulfilled through such a European
                                                          Regulatory Authority.
                                                    19
 ---pagebreak---                                                 Annex I, Part 1
The fixed public telephone service                        The fixed public telephone service
The fixed public telephone service means the              The fixed public telephone service means the
provision to end-users at fixed locations of a service    provision to end-users at fixed locations of a service
for the originating and receiving of national and         for the originating and receiving of national and
international calls, and may include access to            international calls, and includes access to
emergency (112) services, the provision of operator       emergency (112) services, the provision of operator
assistance, directory information services, provision     assistance, directory information services, provision
of public pay phones, provision of service under          of public pay phones, provision of service under
special terms and/or provision of special facilities      special terms and/or provision of special facilities
for customers with disabilities.                          for customers with disabilities.
                                                Annex II par. 4
Organizations included in this category at their own      Organizations       providing     telecommunication
request, under relevant national licensing or             services which are included in this category at their
authorization schemes.                                    own request, under relevant national licensing or
                                                          authorization schemes.
                                        Annex VII, Part 2. (n) (new)
                                                          Provision of facility sharing.
                                        Annex VII, Part 2. (o) (new)
                                                          Maintenance     and     quality  of    interconnection
                                                          services.
                                        Annex VII, Part 2. (p) (new)
                                                          Protection of confidential information.
                                            Annex VII, Part 3. (b)
Provision of facility sharing.                            (deleted)
                                            Annex VII, Part 3. (e)
Maintenance     and     quality  of   interconnection     (deleted)
services.
                                                     20-
 ---pagebreak---                                                                   ISSN 0254-1475
                                                           COM(96) 121 final
                                             DOCUMENTS
EN                                                                            15
                                     Catalogue number : CB-CO-96-131-EN-C
                                                             ISBN 92-78-01831-7
Office for Official Publications of the European Communities
L-2985 Luxembourg
                                               IX