CELEX: 51996PC0535
Language: en
Date: 1996-11-11
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)

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                   COMMISSION OF THE EUROPEAN COMMUNITIES
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                                                       Brussels, 11.11.1996
                                                       COM(96) 535 final
                                                       95/0207 (COD)
                            OPINION OF THE COMMISSION
                   pursuant to Article 189 b (2) (d) of the EC Treaty,
                        on the European Parliament's amendments
                    to the Council's common position regarding the
                                       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)
                AMENDING THE PROPOSAL OF THE COMMISSION
                     pursuant to Article 189 a (2) of the EC Treaty
 ---pagebreak---  ---pagebreak---                              EXPLAN A TORY MEMORANDUM
      Article 189b(2)(d) requests the Commission to express its opinion on the
      qmendments proposed by the European Parliament in its second reading.
      The Commission hereby presents its opinion on these amendments to the Council's
      common position regarding the 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). This includes a modified proposal incorporating
      the amendments proposed by the European Parliament at Second Reading which
      were accepted by the Commission.
                           OPINION OF THE COMMISSION
l.       BACKGROUND
a)    The Commission adopted its proposal on 19.07.95, and it was formally transmitted
      to the EP and the Council on 12.09.951.
b)    The Economic and Social Committee gave a favourable Opinion on 28.02.962.
c)    The European Parliament adopted a favourable Resolution at its First Reading on
      14.02.96, and proposed 69 amendments to the Commission proposal3.
d)    The Council adopted its Common Position on 18.06.96.
e)    The Commission accepted this Common Position and informed the European
      Parliament of its position on 14.06.96.
f)    The European Parliament voted on Second Reading on 19.09.96, adopting a
      favourable resolution which included 31 amendments to the Common Position4.
2.       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. .
1
         OJ C 313, 24.11.1995, p.7
2
         TRA/301 ,28.02.1996
3
         A4-0017/96, PV 14.02.1996
4
         A4-276/96, PV 19.09.1996
                                             -2-
 ---pagebreak--- 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.
3.        POSITION OF THE COMMISSION ON THE EP AMENDMENTS
3.1       E P AMENDMENTS ACCEPTED BY THE COMMISSION
Of the 31 amendments adopted by the European Parliament at Second Reading, the
Commission accepts 12 in full and 9 in part or in principle (ie with some reformulation
of the text), making a total of 21.
The Commission is consistent with its position during the First Reading, and is
supportive of amendments which can improve the Common Position. On this basis, the
Commission position on each amendment is the following:
Amendments accepted in full :                      4, 5, 7, 13, 14, 21, 22, 23, 24, 27, 29, 30
Amendments accepted in part or in principle : 1, 3, 8, 9, 10, 16, 17, 25, 31
The Commission's position on each of these amendments is explained in the attached
table. The most important amendments accepted by the Commission concern the eight
following areas:
Study of creation of a European regulatory authority
 [Amendments 8 and 31(part)]
The Commission accepts the request in Amendments 8 and 31 (last part) for examination,
in the report that the Commission is required to present before the end of 1999, of the
possibility of establishing a European regulatory authority for telecommunications, but
considers that at this stage it would be premature to specify the tasks to be carried out by
such a European regulator. The Council did not accept the EP amendment on this issue
 at First Reading.
In supporting the EP amendment, the Commission notes that the issue could be dealt
with in the report proposed for 1999, even if this is not explicitly stated in the Directive,
                                             -3
 ---pagebreak--- Procedure for resolution of cross-border interconnection disputes
[Amendments 5 and 27]
The Commission supports EP Amendments 5 and 27 which re-introduce a binding
dispute resolution procedure at the EU-level, as called for in the original Commission
proposal.
Deferment of some obligations of this Directive for some Member States
[Amendments 7 and 29]
As expressed in its Communication on the Council Common Position, the Commission
considers that the Common Position text meets the main concerns expressed by
Parliament in First Reading, as it links any deferments from some of the obligations of
this Directive to the transition periods for full liberalisation of telecommunications
services, indicating clearly that such deferments should be valid "for as long as and to the
extent that" such transition periods exist.
However, the Commission gives preference to the texts proposed by Parliament in
Amendments 7 and 29, which require Member States benefiting from transition periods
for full liberalisation granted under Commission Art. 90 Directive on full competition in
telecommunications markets (96/19/EC) to request a corresponding deferment of some
obligations of this Directive, to the extent justified by any special or exclusive rights for
telecommunications.
Definition of interconnection
[Amendment 10]
One of the main-aims of this Directive is to facilitate the establishment of effective
competition at all levels of the telecommunications market. This means competition in
services and competition in network infrastructures. For this reason, the Commission
can support the principle in Amendment 10 where it is made clear that service providers
are included in the scope of the definition of interconnection. However, the wording of
this definition in the Commission's original proposal is technically more correct than that
proposed in the EP Amendment (ie the linking of the facilities of organisations
providing telecommunications services, not the linking of telecommunications services,
as in the proposed amendment).
The Commission does not support the other part of the amendment which introduces a
reference to 'interconnection points', since this term is neither defined nor used in the
Directive.
Reconsideration of need for Directive when effective competition is achieved
[Amendment 9]
The Commission agrees with the principle in Amendment 9 that the competition rules of
the Treaty will have a predominant role when effective competition is achieved in the
telecommunications market, and that at that time the need for this Directive should be
 ---pagebreak---  reconsidered. However, the Commission considers that such principle should be stated
in a recital, rather than in an article as proposed by Parliament, as it is not a legal
requirement. In addition, it would be premature to specify at this stage which provisions
will still be (or will no longer be) appropriate in an effective competitive environment.
Number portability
 [Amendments 25 and 31 (part)]
The Commission supports the requirement in Amendment 25 call for rerouting or
indication of the new number to be implemented if number portability is not yet available,
due to the importance for telephone users of such facilities. The Commission also agrees
with the Parliament on the specification that such facilities should either cost a
reasonable fee approved by the national regulatory authority (for number portability and
call rerouting), or be free of charge (for indication of new number). The Commission,
however, cannot agree to the extension of the requirement for number portability to all
national numbers, rather than the numbers on the fixed public telephone network, as this
would excessively broaden the requirement for number portability and delay its
implementation.
The Commission can support EP Amendment 31 (first part), which explicitly mentions
the possibility of anticipating the timetable for introduction of number portability.
Position in international numbering organisations and fora
[Amendments 4 and 23]
The Commission supports Amendments 4 and 23, which strengthen the requirements for
coordination of the positions of Member States and the Community in international
organisations and fora where numbering decisions are taken.
Commission guidelines
[Amendments 3(part) and 17]
Guidelines are considered the most appropriate tool for addressing complex financial
issues, in that they are flexible and more easily updated than EU legislation. The
committee procedure proposed will ensure that the guidelines have the backing of
Member States. The Commission can thus support Amendments 3(first part) and
17(first part), re-introducing the call for guidelines on cost accounting systems and
accounting separation (rather than transparency) in relation to interconnection to be
drawn by the Commission. However, such guidelines cannot have a mandatory
character.
 ---pagebreak--- 3.2.    E P AMENDMENTS NOT ACCEPTED BY THE COMMISSION
The Commission has not accepted 10 of the 31 amendments proposed by the European
Parliament.
The amendments not accepted by the Commission are the following:
Amendments not accepted :             2, 6, 11, 12, 15, 18, 19, 20, 26, 28
The reasons are given below, where the amendments are grouped into four broad
categories.
Universal service
[Amendments l(part), 11,12,15 and 18]
The Commission can not accept the EP Amendments calling for Member States to be
required to set up a universal service fund mechanism for financing the net cost of
universal service obligations (Amendments 1 (last part), 11, 12 and 18). It is for Member
States to decide whether a system for financing universal service is necessary. Some
Member States may decide not to establish any mechanism for sharing the net cost of
universal service obligations, where this cost is very low. Depending on the way a
Member State imposes universal service obligations, it may be appropriate to set up a
universal service fund, or to collect contributions to universal service costs through an
extra charge on interconnected parties. In both cases, the requirements for transparency
and objectivity are the same, and the contributions by market players will be the same.
The Commission has expressed a preference for universal service funds in its
Communication on the consultation on the Infrastructure Green Paper. However, given
the relatively low cost of universal telephone service in some Member States, the
overhead of an independently administered universal service fund may not be justified in
all cases.
The Commission can neither accept Amendment 15, which calls on the Commission to
draw up, before 31 October 1996, a proposal for a European Parliament and Council
Directive on the costing and financing of universal service. As announced in its
Communication on universal service issued in March of this year5, the Commission is
planning to issue guidelines on costing and financing universal service, which will
provide further guidance on costing and financing universal service. The need for a
specific Directive on costing and financing of universal service is not foreseen by the
Commission at this stage.
Accounting separation
 [Amendments 2, 19 and 20]
The purpose of accounting separation is to ensure full transparency of internal cost-
transfers, and to avoid discrimination. Accounting separation is not as effective in
         COM (96) 73, 13.03.1996
 ---pagebreak--- preventing discrimination as structural separation, but it is less disruptive. Proposed EP
Amendments 2, 19 and 20 would weaken the requirements for accounting separation by
calling for 'transparent accounts'. The weaker approach suggested by the Parliament
would place much greater demands on the NRAs, in terms of both resources and
expertise, in checking that there were no anti-competitive cross transfers taking place.
Comitology
[Amendments 6, 26 and 28]
As expressed in its position on the Council Common Position, the Commission regrets
that Council insisted on introduction of a type Ilia regulatory committee procedure in
this Directive. However, the Commission also accepts that this gives consistency with
other Directives in the field of ONP, where the same regulatory procedure is being used.
Therefore, the Commission, while restating its preference for an advisory committee, was
able to accept the change in procedure, in order to allow Council to reach a qualified
majority for adoption of the Common Position. An inter-institutional agreement was
reached in 1994 between the EP, Council and Commission on Comitology, and a modus
vivendi was drawn up to cover the situation where regulatory committees are used. For
these reasons, the Commission does not accept EP Amendments 6, 26 and 28.
Other amendments
[Amendment 16(part)]
The Commission can not accept the first part of Amendment 16 which links charges for
interconnection with contributions to the net fixed costs of the local network. Such
costs - a form of access deficit - should be phased out as soon as possible, in accordance
with EU law, and, where they exist, must be separately identified and not included in the
interconnection charges.
 4.      CONCLUSION
 The Commission has accepted 21 of the 31 amendments proposed by the European
Parliament at Second Reading either in whole, in part or in principle.
 In accordance with Article 189a paragraph 2 of the EC Treaty, the Commission's
 modified proposal incorporates 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)
                                -8-
 ---pagebreak---                  Common Position text                                     Amended text
                                                Recital 8
                                     (based on EP Amendment 1)
Whereas        the   Council     Resolution     of     Whereas obligations for the provision of
7 February 1994 sets out conditions for                universal service contribute to the Community
financing a universal voice telephony service;         objective of economic and social cohesion and
whereas obligations for the provision of               territorial equity; whereas there may be more
universal service contribute to the Community          than one organization in a Member State with
objective of economic and social cohesion and          universal service obligations; whereas the aim
territorial equity; whereas there may be more          should be to introduce new technologies like
than one organization in a Member State with           the integrated services digital network (ISDN)
universal service obligations; whereas the             as soon as possible and on as broad a basis as
calculation of the net cost of universal service       possible in the Member States: whereas at its
should take due account of costs and revenues,         current stage of development in the Member
as well as economic externalities and the              States. ISDN is not accessible for all users and
intangible benefits resulting from providing           as such cannot yet be subject to universal
universal service but should not hinder the            service obligations; whereas the calculation of
on-going process of tariff rebalancing; whereas        the net cost of universal service should take
costs of universal service obligations should be       due account of costs and revenues, as well as
calculated on the basis of transparent                 economic externalities and the intangible
procedures; whereas financial contributions            benefits resulting from providing universal
related to the sharing of universal service             service but should not hinder the on-going
obligations should be unbundled from charges           process of tariff rebalancing; whereas costs of
for interconnection; whereas, when a universal         universal service obligations should be
service obligation represents an unfair burden         calculated on the basis of transparent
on an organization, it is appropriate to allow         procedures; whereas financial contributions
Member States to establish mechanisms for              related to the sharing of universal service
sharing the net cost of universal provision of a        obligations should be unbundled from charges
fixed public telephone network and a fixed              for interconnection; whereas, when a universal
public      telephone    service    with     other      service obligation represents an unfair burden
organizations           operating           public      on an organization, it is appropriate to allow
telecommunications networks and/or publicly             Member States to establish mechanisms for
available voice telephony services; whereas this        sharing the net cost of universal provision of a
should respect the principles of Community              fixed public telephone network and a fixed
law, in particular those of non-discrimination          public     telephone    service    with     other
and proportionality and should be without               organizations          operating          public
prejudice to Article 100a(2) of the Treaty;             telecommunications networks and/or publicly
                                                        available voice telephony services; whereas this
                                                        should respect the principles of Community
                                                        law, in particular those of non-discrimination
                                                        and proportionality and should be without
                                                        prejudice to Article 100a(2) of the Treaty;
 ---pagebreak---                Common Position text                                         Amended text
                                                 Recital 12
                                      (based on EP Amendment 3)
Whereas national regulatory authorities have an          Whereas national regulatory authorities have an
important role in encouraging the development            important role in encouraging the development
of a competitive market in the interests of              of a competitive market in the interests of
Community users, and of securing adequate                Community users, and of securing adequate
interconnection       of       networks        and       interconnection       of       networks       and
interoperability    of      services;     whereas        interoperability     of     services;     whereas
negotiation of interconnection agreements can            negotiation of interconnection agreements can
be facilitated by national regulatory authorities        be facilitated by national regulatory authorities
setting down certain conditions in advance, and          setting down certain conditions in advance on
identifying other areas to be covered in                 the basis of common guidelines defined by the
interconnection agreements; whereas in the               Commission so as to facilitate the development
event of a dispute over interconnection                  of a seamless harmonised European home
between parties in the same Member State, an             market, and identifying other areas to be
aggrieved party must be able to call on the              covered in interconnection            agreements;
national regulatory authority to resolve the             whereas in the event of a dispute over
dispute; whereas national regulatory authorities         interconnection between parties in the same
must be able to require organizations to                 Member State, an aggrieved party must be able
interconnect their facilities, where it can be           to call on the national regulatory authority to
demonstrated that this is in the users' interests;       resolve the dispute; whereas national
                                                         regulatory authorities must be able to require
                                                         organizations to interconnect their facilities,
                                                         where it can be demonstrated that this is in the
                                                         users' interests; whereas each operator must be
                                                         responsible for carrying calls and setting the
                                                         tariffs for its subscribers up to the most
                                                         appropriate interconnection point;
                                                 -10
 ---pagebreak---                 Common Position text                                         Amended text
                                                  Recital 15
                                       (based on EP Amendment 4)
Whereas numbering is a key element for equal              Whereas numbering is a key element for equal
access; whereas national regulatory authorities           access; whereas national regulatory authorities
should have the responsibility for administering          should have the responsibility for administering
and controlling national numbering plans, and             and controlling national numbering pians, and
those naming and addressing aspects of                    those naming and addressing aspects of
telecommunications           services         where       telecommunications           services         where
coordination at a national level is required, so          coordination at a national level is required, so
as to ensure effective competition; whereas in            as to ensure effective competition; whereas in
exercising      this    responsibility,     national      exercising      this    responsibility,     national
regulatory authorities must have regard to the            regulatory authorities must have regard to the
principle of proportionality, particularly as to          principle of proportionality, particularly as to
the effect of any measures on network                     the effect of any measures on network
operators, resellers and consumers; whereas               operators, resellers and consumers; whereas
number portability is an important facility for           number portability is an important facility for
users, and should be implemented as soon as               users, and should be implemented as soon as
practicable; whereas numbering schemes                    practicable; whereas numbering schemes
should be developed in full consultation with             should be developed in full consultation with
all the parties involved and in harmony with a            all the parties involved and in harmony with a
long-term Europe-wide numbering framework                 long-term Europe-wide numbering framework
and international numbering schemes as being              and international numbering schemes as being
considered in the European Conference of                  considered in the European Conference of
Postal           and          Telecommunications          Postal           and          Telecommunications
Administrations (CEPT); whereas numbering                 Administrations (CEPT); whereas numbering
requirements in Europe, the need for the                  requirements in Europe, the need for the
provision of pan-European and new services                provision of pan-European and new services
and the globalization and synergy of the                  and the globalization and synergy of the
telecommunications         market      make      the      telecommunications         market       require    a
coordination       of national       positions in         coordinated position by the Member States and
international organizations and fora desirable            the» Community in international organizations
where numbering decisions are taken;                       and fora where numbering decisions are taken;
                                                  Recital 18
                                        (based on EP Amendment 5)
 Whereas in addition to the rights of recourse             Whereas in addition to the rights of recourse
 granted under national or Community law,                  granted under national or Community law,
 there is a need for conciliation procedures for           there is a need for simple procedures to resolve
 cross-border disputes which lie outside the               cross-border disputes which lie outside the
 competence of a single national regulatory                competence of a single national regulatory
 authority; whereas these procedures, to be                authority; whereas these procedures, to be
 initiated by any of the national regulatory               initiated by any of the parties concerned,
 authorities concerned, should be responsive,              should be responsive, inexpensive and
 inexpensive and transparent, and should                   transparent, and should involve all the parties
 involve all the parties concerned;                        concerned;
                                                  -11 -
 ---pagebreak---                 Common Position text                                      Amended text
                                                Recital 22
                                     (based on EP Amendment 7)
Whereas the implementation of certain                   Whereas the implementation of certain
obligations must be linked to the date of               obligations must be linked to the date of
liberalization of telecommunications services           liberalization of telecommunications services
and infrastructure and, in particular in regard to      and infrastructure and, in particular in regard to
the relevant Member States, take full account           the relevant Member States, take full account
of the transition periods granted in the                of the transition periods granted by the Article
Council Resolution of 22 July 1993 on the               2(2) of Commission Directive 90/3 88/EEC as
review       of   the     situation      in    the      amended by Commission Directive 96/19/EC2.
telecommunications sector and the need for              including the retention of special or exclusive
further development in that market and the              rights in relation to direct interconnection
Council Resolution of 22 December 1994 on               between the mobile networks of those Member
the principles and timetable for the                    States and the fixed or mobile networks of
liberalization      of       telecommunications         other Member States; whereas deferment of the
                2                                       obligation to provide number portability may
infrastructures . including the retention of
special or exclusive rights in relation to direct       be granted where the Commission agrees that
interconnection between the mobile networks             the obligation would impose an excessive
of those Member States and the fixed or mobile          burden on certain organizations;
networks of other Member States; whereas
deferment of the obligation to provide number
portability may be granted where the
Commission agrees that the obligation would
impose an excessive burden on certain
organizations;
         OJ No C 379. 31.12.1994. p. 4.                         OJL74, 22.3.1996, p. 13.
                                                -12-
 ---pagebreak---                 Common Position text                                     Amended text
                                               Recital 24
                                    (based on EP Amendment 9)
Whereas the functioning of this Directive              Whereas the functioning of this Directive
should be reviewed by 31 December 1999, in             should be reviewed by 31 December 1999, in
particular to examine the scope of universal           particular to examine the scope of universal
service and the timetable for number                   service and the timetable for number
portability; whereas the situation with regard to      portability; whereas the situation with regard to
interconnection with third countries should also       interconnection with third countries should also
be periodically reviewed, to allow appropriate         be periodically reviewed, to allow appropriate
action to be taken;                                    action to be taken; whereas when effective
                                                       competition is achieved in the market, the
                                                       competition rules of the Treaty will in principle
                                                       be sufficient to monitor fair competition ex-
                                                       post so that the need for this Directive may be
                                                       reconsidered;
                                               Recital 25
                                     (based on EP Amendment 8)
Whereas the essential goal of interconnection          Whereas the essential goal of interconnection
of networks and interoperability of services           of networks and interoperability of services
throughout the Community cannot be                     throughout the Community cannot be
sufficiently achieved at Member State level,           sufficiently achieved at Member State level,
and can therefore be better achieved at                and can therefore be better achieved at
Community level by this Directive;                     Community level by this Directive; whereas it
                                                       is desirable, when this Directive is reviewed, to
                                                       envisage the possibility of establishing a
                                                       European       regulatory    authority to be
                                                       responsible for those tasks carried out by the
                                                       Commission or the national regulatory
                                                       authority under this Directive, which would be
                                                       more efficiently carried out by such a European
                                                       regulatory authority;
                                             Article 2(l)(a)
                                    (based on EP Amendment 10)
 (a)     "interconnection" means the physical           (a)     "interconnection" means the physical
 and logical linking of telecommunications              and logical linking of the facilities of
 networks used by the same or a different               organisations providing telecommunications
 organization in order to allow the users of one        networks and/or telecommunications services
 organization to communicate with users of the          used by the same or a different organization in
 same or another organization, or to access             order to allow the users of one organization to
 services provided by another organization;             communicate with users of the same or another
                                                        organization, or to access services provided by
                                                        another organization;
                                                13
 ---pagebreak---                 Common Position text                                         Amended text
                                     Article 5(5), first subparagraph
                                      (based on EP Amendment 13)
5. Where the mechanisms referred to in                    5. Where a mechanism for sharing the net cost
paragraph 4 are established, national regulatory          of universal service obligations as referred to in
authorities shall ensure that the principles for          paragraph 4 is established, national regulatory
cost sharing, and details of the mechanism                authorities shall ensure that the principles for
used, are open to the public in accordance with           cost sharing, and details of the mechanism
Article 14(2).                                            used, are open to public inspection in
                                                          accordance with Article 14(2).
                                                 Article 5(6)
                                        (based on EP Amendment 14)
6. Until such time as the procedure described             6. Until such time as the procedure described
in paragraphs 3, 4 and 5 is implemented, any              in paragraphs 3, 4 and 5 is implemented, any
charges payable by an interconnected party                charges payable by an interconnected party
which include or serve as a contribution to the           which include or serve as a contribution to the
cost of universal service obligations shall be            cost of universal service obligations shall be
notified, prior to their introduction, to the             notified, prior to their introduction, to the
national regulatory authority. Where the                  national     regulatory      authority.   Without
national regulatory authority finds on its own            prejudice of Article 17 of this Directive, where
initiative, or after a substantiated request by an        the national regulatory authority finds on its
interested party, that such charges are                   own initiative, or after a substantiated request
excessive, the organization concerned shall be            by an interested party, that such charges are
required to reduce the relevant charges. Such             excessive, the organization concerned shall be
reductions shall be applied retrospectively,              required to reduce the relevant charges. Such
from the date of introduction of the charges,             reductions shall be applied retrospectively,
but not before 1 January 1998.                            from the date of introduction of the charges,
                                                          but not before 1 January 1998.
                                                Article 7(2)
                                      (based on EP Amendment 16)
2. Charges for interconnection shall follow               2. Charges for interconnection shall follow
the principles of transparency and cost                   the principles of transparency and cost
orientation. The burden of proof that charges             orientation. The burden of proof that charges
are derived from actual costs including a                 are derived from actual costs including a
reasonable rate of return shall lie with the              reasonable rate of return shall lie with the
organization providing interconnection to its             organization providing interconnection to its
facilities. National regulatory authorities may           facilities. National regulatory authorities may
request an organization to provide full                   request an organization to provide full
justification for its interconnection charges, and,       justification for its interconnection charges, and
where appropriate shall require charges to be             where appropriate shall require charges to be
adjusted. This paragraph shall also apply to               adjusted. This paragraph shall also apply to
organizations set out in Part 3 of Annex I                 organizations set out in Part 3 of Annex I
which have significant market power.                      which have been notified by national regulatory
                                                           authorities as having significant market power
                                                           on the national market for interconnection.
                                                  14
 ---pagebreak---                    Common Position text                                        Amended text
                                       Article 7(5), first subparagraph
                                        (based on EP Amendment 17)
  5. National regulatory authorities shall ensure          5. The Commission shall, acting in accordance
  that the cost accounting systems used by the             with the procedure laid down in Article 15. draw
  organizations concerned are suitable for                 up guidelines on cost accounting systems and
  implementation of the requirements of this               accounting       separation      in    relation   to
  Article, and are documented to a sufficient level        interconnection. National regulatory authorities
  of detail, as indicated in Annex V.                      shall ensure that the cost accounting systems
                                                           used by the organizations concerned are suitable
                                                           for implementation of the requirements of this
                                                           Article, and are documented to a sufficient level
                                                           of detail, as indicated in Annex V.
                                                  Article 9(1)
                                        (based on EP Amendment 21)
1. National regulatory authorities shall encourage          1. National regulatory authorities shall encourage
and secure adequate interconnection in the                 and secure adequate interconnection in the
interests of all users, exercising their responsibility    interests of all users, exercising their responsibility
in a way that provides maximum economic                    in a way that provides maximum economic
efficiency and gives the maximum benefit to end-           efficiency and gives the maximum benefit to end-
users. In particular, national regulatory authorities      users. In particular, national regulatory authorities
shall take into account;                                    shall 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 harmonised European
                                                            telecommunication home market, thus coordinate
                                                            their policies, guidelines and actions with their
                                                            counterparts in other Member States and with the
                                                            Commission and provide them help and assistance
                                                            when necessary;
 - 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 services,        interoperability of national networks and services,
 as well as access to such networks and services;           as well as access to such networks and 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 and develop universal                - the need to maintain and develop universal
 service.                                                    service.
                                                     15-
 ---pagebreak---                Common Position text                                     Amended text
                                              Article 11
                                    (based on EP Amendment 22)
Where an organization providing public                Where an organization providing public
telecommunications networks and/or publicly           telecommunications networks and/or publicly
available telecommunications services has the         available telecommunications services has the
right under national legislation to install           right under national legislation to install
facilities on, over or under public or private        facilities on, over or under public or private
land, or may take advantage of a procedure for        land, or may take advantage of a procedure for
the expropriation or use of property, national        the expropriation or use of property, national
regulatory authorities shall encourage the            regulatory authorities shall encourage the
sharing of such facilities and/or property with       sharing of such facilities and/or property with
other           organizations          providing      other           organizations          providing
telecommunications networks and publicly              telecommunications networks and publicly
available services.                                   available services, in particular where essential
                                                      requirements deprive other organisations of
                                                      access to viable alternatives.
Agreements for collocation or facility sharing        Agreements for collocation or facility sharing
shall normally be a matter for commercial and         shall normally be a matter for commercial and
technical agreement between the parties               technical agreement between the parties
concerned. The national regulatory authority          concerned. The national regulatory authority
may intervene to resolve disputes, as provided        may intervene to resolve disputes, as provided
for in Article 9.                                     for in Article 9.
In particular. Member States may impose               Member States may impose facility and/or
facility and/or property sharing arrangements         property sharing arrangements (including
(including physical collocation) only after an        physical collocation) only after an appropriate
appropriate period of public consultation             period of public consultation during which all
during which all interested parties must be           interested parties must be given an opportunity
given an opportunity to express their views.          to express their views. Such arrangements may
Such arrangements may include rules for               include rules for apportioning the costs of
apportioning the costs of facility and/or             facility and/or property sharing.
property sharing.
                                           Article 12 par. 2
                                    (based on EP Amendment 23)
2. In order to ensure full interoperability of        2. In order to ensure full interoperability of
Europe-wide networks and services, Member             Europe-wide networks and services, Member
 States shall take all necessary steps to ensure       States and the Community shall ensure the
the coordination of their national positions in        coordination of their positions in international
 international organizations and fora where            organizations and fora where numbering
 numbering decisions are taken, taking into            decisions are taken, taking into account
 account possible future developments in               possible future developments in numbering in
 numbering in Europe.                                  Europe.
                                              -16-
 ---pagebreak---                Common Position text                                          Amended text
                                                 Article 12(3)
                                      (based on EP Amendment 24)
3. Member States shall ensure that national               3. Member States shall ensure that national
telecommunications numbering plans are                    telecommunications numbering plans are
controlled by the national regulatory authority,          controlled by the national regulatory authority,
in order to guarantee independence from                   in order to guarantee independence from
organizations providing telecommunications                organizations providing telecommunications
networks or telecommunications services. In               networks or telecommunications services and
order to ensure effective competition, national           facilitate number portability. In order to ensure
regulatory authorities shall ensure that the              effective competition, national regulatory
procedures for allocating individual numbers              authorities shall ensure that the procedures for
and/or numbering ranges are transparent,                  allocating individual numbers and/or numbering
equitable and timely and the allocation is                ranges are transparent, equitable and timely and
carried out in an objective, transparent and              the allocation is carried out in an objective,
non-discriminatory       manner.            National      transparent and non-discriminatory manner.
regulatory authorities may lay down conditions            National regulatory authorities may lay down
for the use of certain prefixes or certain short          conditions for the use of certain prefixes or
codes, in particular where these are used for             certain short codes, in particular where these
services of general public interest (e.g.                 are used for services of general public interest
freephone services, kiosk billed services,                (e.g. freephone services, kiosk billed services,
directory services, emergency services), or to            directory services, emergency services), or to
ensure equal access.                                      ensure equal access.
                                                 Article 12(5)
                                      (based on EP Amendment 25)
5.      National regulatory authorities shall             5.        National regulatory authorities shall
encourage the earliest possible introduction of           encourage the earliest possible introduction of
the number portability facility whereby                   the number portability facility whereby
end-users who so request can retain their                 end-users who so request can retain, against a
number(s) on the fixed public telephone                   reasonable fee approved by the national
network at a specific location independent of             regulatory authority, their number(s) on the
the organization providing service, and shall             fixed public telephone network at a specific
ensure that this facility is available at least in all    location independent of the organization
major centres of population before 1 January              providing service, and shall ensure that this
2003.                                                     facility is available at least in all major centres
                                                          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 can be rerouted to the user against a
                                                           reasonable fee approved by the national
                                                           regulatory authority, or that during a
                                                           reasonable period callers are given an
                                                           indication of the new number, without charging
                                                           the user or the callers for this service.
                                                    17
 ---pagebreak---                 Common Position text                                        Amended text
                                                 Article 17
                                      (based on EP Amendment 27)
   Conciliation procedure for disputes between                Dispute resolution at Communitv-level
  organizations operating under authorizations
                    provided by
             different Member States
1. Without prejudice to:                                 1. Without prejudice to:
(a)      any action that the Commission or any           (a)      any action that the Commission or any
Member State may take pursuant to the Treaty;            Member State may take pursuant to the Treaty;
(b)      the rights of the party invoking the            (b)      the rights of the party invoking the
procedure in paragraphs 2 and 3, of the                  procedure in paragraphs 2 and 3, of the
organizations concerned or of any other party            organizations concerned or of any other party
under applicable national law;                           under applicable national law;
the procedure set out in paragraphs 2, 3 and 4           the procedure set out in paragraphs 2, 3 and 4
shall be available in the event of an                    shall be available in the event of an
interconnection dispute between organizations            interconnection dispute between organizations
operating under authorizations granted by                operating under authorizations granted by
different Member States, where such dispute              different Member States, where such dispute
does not fall within the responsibility of a single      does not fall within the responsibility of a single
national regulatory authority exercising its             national regulatory authority exercising its
power in accordance with Article 9.                      power in accordance with Article 9.
2.    Any party may refer the dispute to the             2.    Any party may refer the dispute to the
national regulatory authorities concerned. The           national regulatory authorities concerned. The
national regulatory authorities shall coordinate         national regulatory authorities shall coordinate
their efforts in order to bring about a resolution       their efforts in order to bring about a resolution
of the dispute, in accordance with the                   of the dispute, in accordance with the
principles set out in Article 9(1).                      principles set out in Article 9(1) and shall
                                                         inform the Commission.
3.      If the national regulatory authorities           3.      If the national regulatory authorities
concerned do not agree between themselves on             concerned do not agree between themselves on
a solution within six months of referral, the-           a solution within six months of referral, the
procedure provided for in paragraph 4 may be             procedure provided for in paragraph 4 may be
invoked by one of them by way of a                       invoked by any of the parties or national
notification to the Commission, with copies to           regulatory authorities concerned by way of a
all the parties and national regulatory                  notification to the Commission, with copies to
authorities concerned. The solution shall have           all the parties and national regulatory
binding effect only if all parties are agreed.           authorities concerned. The solution shall have
                                                         binding effect only if all parties are agreed.
                                                  18
 ---pagebreak---                Common Position text                                   Amended text
4. Following a notification to the Commission       4. Following a notification to the Commission
based on paragraph 3, the Commission shall          based on paragraph 3, the Commission shall
refer the matter to the chairman of the ONP         convene as soon as possible a working group
Committee.                                          including at least two members of the ONP
                                                    Committee and one representative of each of
The chairman of the ONP Committee shall             the national regulatory authorities concerned
convene as soon as possible a working group         and the chairman of the ONP Committee or
including at least two members of the ONP           another official of the Commission appointed
Committee and one representative of each of         by him. The working group shall normally
the national regulatory authorities concerned       meet within 10 days of the meeting being
and the chairman of the ONP Committee or            convened. The chairman may decide, upon
another official of the Commission appointed        proposal of any of the members of the working
by him. The working group shall normally            group, to invite a maximum of two other
meet within 10 days of the meeting being            persons as experts to advise it.
convened. The chairman may decide, upon
proposal of any of the members of the working
group, to invite a maximum of two other
persons as experts to advise it.
The working group shall give the party              The working group shall give the party
invoking the procedure, the national regulatory     invoking the procedure, the national regulatory
authorities of the Member States and the            authorities of the Member States and the
organizations involved the opportunity to           organizations involved the opportunity to
present their opinions in oral or written form.     present their opinions in oral or written form.
The working group shall endeavour to reach          The working group shall endeavour to reach
agreement between the parties involved. The         agreement between the parties involved or
chairman shall inform the ONP Committee of          otherwise define its position within three
the results of this procedure.                      months. This position shall form the basis of a
                                                     solution to be implemented at a national level
                                                    without delay. If an agreed position is not
                                                    reached, or if an agreed position is not
                                                     implemented within a reasonable period of time
                                                     which shall not, except in justified cases,
                                                     exceed two months, the appropriate solution
                                                     shall be adopted by the Commission in
                                                     accordance with the procedure laid down in
                                                     Article 16. This solution shall 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.
                                                -19
 ---pagebreak---                 Common Position text                                       Amended text
                                             Article 20(1)
                                    (based on EP Amendment 29)
1. Deferment of the obligations under Articles         1.      Member States with less developed
3(1), 3(2), 4(1), 4(2), 9(1) and 9(3) insofar as      networks which are granted an additional
those        obligations     concern       direct     period of up to five years in which to
interconnection between the mobile networks           implement all or some of the obligations under
of that Member State and the fixed or mobile          Directive       96/19/EC      may      request     a
networks of other Member States, and under            corresponding deferment of some or all the
Article 5, shall be granted to those Member           requirements of Articles 3(1), 3(2), 4(1), 4(2),
States identified in the Council Resolutions of       9(1) and 9(3) insofar as those obligations
22 July 1993 and 22 December 1994 which               concern direct interconnection between the
benefit from an additional transition period for      mobile networks of that Member State and the
the liberalization of telecommunications              fixed or mobile networks of other Member
services for as long as and to the extent that         States, and under Article 5. to the extent
they avail themselves of such transition              justified by any special or exclusive rights for
periods. Member States shall inform the               telecommunications services and infrastructure
Commission of their intention to make use of          allowed under Community law.
them.
                                             Article 20(2)
                                    (based on EP Amendment 30)
2. Deferment of the obligations under Article          2. Deferment of the obligations under Article
 12(5) may be requested where the Member               12(5) may be requested where the Member
 State concerned can prove that they would             State concerned can prove that they would
impose an excessive burden on certain                  impose an excessive burden on certain
organizations or classes of organization. The          organizations or classes of organization. The
Member State shall inform the Commission of            Member State shall inform the Commission of
the reasons for requesting a deferment, the date       the reasons for requesting a deferment, the date
by which the requirements can be met, and the          by which the requirements can be met, and the
 measures envisaged in order to meet this              measures envisaged in order to meet this
 deadline. The Commission shall consider the           deadline. The Commission shall consider the
 request taking into account the particular            request taking into account the particular
 situation in that Member State and the need to        situation in that Member State and the need to
 ensure a coherent regulatory environment at a         ensure a coherent regulatory environment at a
 Community level, and shall inform the Member          Community level, and also the existing
 State whether it deems that the particular            possibilities of otherwise meeting the requirements,
 situation in that Member State justifies a            and shall inform the Member State whether it
 deferment and, if so, until which date such           deems that the particular situation in that
 deferment is justified.                               Member State justifies a deferment and, if so,
                                                       until which date such deferment is justified.
                                               -20
 ---pagebreak---                Common Position text                                    Amended text
                                            Article 22(2)
                                   (based on EP Amendment 31)
2. The Commission shall examine and report           2. The Commission shall examine and report
periodically to the European Parliament and to       periodically to the European Parliament and to
the Council on the functioning of this               the Council on the functioning of this
Directive, on the first occasion not later than      Directive, on the first occasion not later than
31 December 1999. For this purpose, the              31 December 1999. For this purpose, the
Commission may request information from the          Commission may request information from the
Member States.                                       Member States.
The report shall examine what provisions of          The report shall examine what provisions of
this Directive should be adapted in the light of     this Directive should be adapted in the light of
the developments in the market, the evolution        the developments in the market, the evolution
of technology and the changes in user demand,        of technology and the changes in user demand,
in particular:                                       in particular:
  (a)   for the provisions under Article 5;            (a)   for the provisions under Article 5;
  (b) to confirm the timetable laid down in            (b) to confirm or advance the timetable laid
   Article 12(5).                                       down in Article 12(5).
                                                     The Commission shall also investigate in the
                                                     report the possibility of setting up swiftly a
                                                     European regulatory authority to carry out
                                                     those tasks carried out by the Commission or
                                                     the national regulatory authorities according to
                                                     this Directive, which can better be undertaken
                                                     at Community level.
                                               21
 ---pagebreak---  ---pagebreak---                                                                   ISSN 0254-1475
                                                           COM(96) 535 final
                                             DOCUMENTS
 EN                                                             15 16 08      06
                                    Catalogue number : CB-CO-96-543-EN-C
                                                             ISBN 92-78-10675-5
Office for Official Publications of the European Communities
L-2985 Luxembourg
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