CELEX: 51988PC0825
Language: en
Date: 1989-01-09
Title: Proposal for a COUNCIL DIRECTIVE on the establishment of the internal market for telecommunications services through the implementation of Open Network Provision (ONP) (presented by the Commission)

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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                               COM(88 ) 825 final - SYN 187
                                               Brussels , 9 January 1989
                                Proposai for a
                              COUNCIL DIRECTIVE
   on the establishment of the internal market for telecommunications
  services through the implementation of Open Network Provision ( ONP )
                       ( presented by the Commission )
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                                                                           2
                                   CONTENTS
A.  SUMMA RY
B.  EXPLANATORY MEMORANDUM
    I)   Introduction
    II ) The general context : the implementation of the common market for
         telecommunications services up to 1992
    III) The approach adopted
    IV)  Major elements of the proposed Directives
    V)   Conclusions
ANNEX :
PROPOSAL FOR A COUNCIL DIRECTIVE ON THE ESTABLISHMENT OF THE
INTERNAL MARKET FOR TELECOMMUNICATIONS SERVICES THROUGH THE
IMPLEMENTATION OF OPEN NETWORK PROVISION (O N P)
 ---pagebreak---                                                                                             3
   A    SUMMARY
  The establish...cm of an open Community-wide market for telecommunications services up
  to 1992 was defined as a major policy goal in the Green Paper on the Development of the
  Common Market for Telecommunications Services and Equipment (COM(87)290) and
  further specified in the action plan announced on the basis of the broad consensus achieved
 in COM(88)48 ("Implementing the Green Paper on the Development of the Common
 Market for Telecommunications Services and Equipment / State of Discussions and
 Proposals by the Commission").
The progressive establishment of harmonized conditions for open access to, and the open
use of, the public telecommunications network infrastructure and public
telecommunications services ( Open Network Provision - O N P) has been generally
recognized as central to the achievement of an effective Community telecommunications
market, together with the rapid adaptation of the sector of telecommunications services to
the requirements and obligations of the Treaty. The Council in its Resolution on the
development of the Common Market for Telecommunications Services and Equipment up
to 19921 of 30 June 1988 identified the "rapid definition, by Council Directives, of technical
conditions, usage conditions and tariff principles for Open Network Provision" as of crucial
importance for "creating progressively an open common market for telecommunications
services, particularly for value-added services". This was confirmed by the opinion of the
European Parliament, the opinion of the Economic and Social Committee and the broad
range of comments received from all parties concerned.
In the meantime, definition work has substantially progressed. The Commission now
considers it appropriate to establish a framework for the progressive process of
harmonization. This is the purpose of the draft Directive herewith presented.
Based on the procedures established by this framework Directive, specific Directives will
then be submitted by the Commission to the Council progressively for each specific area
concerned .
1
      88/ C257/ 01 .
 ---pagebreak---                                                                                         4
The Commission considers that the stable framework thus created will contribute
substantially to the orderly and progressive establishment of harmonized conditions for
open provision of public networks and services in the Community, as required for the
development of a competitive Community-wide telecommunications market up to 1992.
The progress of internal harmonization «- ill also contribute to the development of the
Community’s position in bilateral and multilateral relations.
 ---pagebreak---                                                                                            5
B     EXPLANATORY MEMORANDUM
I)    INTRODUCTION
The establishment of harmonized conditions for open access to, and the open use of, the
public telecommunications network infrastructure and public telecommunications services
( Open Network Provision - O N P) in the Community has been identified as essential for
the achievement of a common market for telecommunications services up to 1902, in which
the free provision of services provided via telecommunications networks is ensured.
The Green Paper on the Development of the Common Market for Telecommunications
Services and Equipment (COM(87)290) defined the development of the conditions for
Open Network Provision (ONP) as a progressive and participatory process :
"Clear definition by Community Directive of general requirements imposed by
Telecommunications Administrations on providers of competitive services for use of the
network, including definitions regarding network infrastructure provision .
"This must include clear interconnect and access obligations by Telecommunications
Administrations for trans-frontier service providers in order to prevent Treaty
infringements.
"Consensus must be achieved on [harmonized] standards, frequencies, and tariff principles,
in order to agree on the general conditions imposed for service provision on the
competitive sector. Details of this Directive on Open Network Provision (ONP) should be
prepared in consultation with the Member States, the Telecommunications
Administrations and the other parties concerned, in the framework of the Senior Officials
Group on Telecommunications (SOG-T).
"The Council, in its Resolution on the development of the Common Market for
Telecommunications Services and Equipment up to 19922 of 30 June 1988, adopting the
major Green Paper objectives, stated as an overall policy goal :
"creating progressively an open, common market for telecommunications services,
particularly for value-added services. Due account must be taken of the competition rules
of the Treaty. Rapid definition, by Council Directives, of technical conditions, usage
conditions and tariff principles for Open Network Provision , starting with harmonized
conditions for the use of leased lines, is of crucial importance and closely linked with the
creation of an open common market for non-reserved telecommunications services".
The European Parliament, in its Resolution on Posts and Telecommunications3, supporting
the main positions of the Green Paper, emphasized the key role of harmonized
Community-wide conditions of access and use of the public telecommunications networks
and services provided by the Telecommunications Administrations and asked the
Commission to propose a Directive concerning the free access of private providers to the
telecommunications networks in the Community .
      see footnote 1 .
3
      Resolution of 14.12.1988 .
 ---pagebreak---                                                                                                 6
The importance of Open Network Provision was further emphasized by the opinion of the
Economic and Social Committee on the Green Paper4, as it was by the wide range of
comments received during the broad consultation process following the publication of the
Green Paper, which involved user organizations; telecommunications, data processing and
sendees industries; the trade unions and the organizations representing consumers’ °
interests in this field.
The Commission specified its proposals for the working out of Open Network Provision
further in its plan for priority actions to follow up the Green Paper, published in Feb* :v
 1988 ("Implementing the Green Paper on the Development of the Common Market for
Telecommunications Services and Equipment / State of Discussions and Proposals by fho
Commission" - COM(88)48).
In order to ensure rapid progress with the development of ONP, the Senior Officiais Group
on Telecommunications (SOG-T) assigned the task of making proposals for the definition
and development of principles for ONP to its sub-group for Analysis and Forecasting
(GAP).
The first resultant GAP report was adopted by SOG-T on 13 April 1988. It established a
Reference Framework for Open Network Provision5.
Currently, work on the first specific area of investigation - access to leased lines - is
underway.
The Commission reported on the current progress of work on the definition of Open
Network Provision in its Communication of 5 December 1988 : "Telecommunications :
Progress on the definition of Open Network Provision (ONP) - short status report"
(COM(88)718).
It stated that substantial progress on the definition of Open Network Provision had been
made and considered it now "timely to set up a firm political and legal base for a
continuous, progressive process to establish harmonized Open Network Provision
conditions in the European Community, to dedicate the necessary resources to this process,
and to ensure user and industry participation".
"To this end, the Commission envisages a (Council) Framework Directive (Article 100 A),
defining the progressive process of harmonization, based on the Reference Framework for
Open Network Provision proposed in the GAP report6 adopted by the Senior Officials
Group on Telecommunications."
This draft Directive is herewith presented.
      OJC 336 , 31 . 12.1937 , p . 46 end
      CJC 175 , 4.7.1988 , p . 36 .
      Report by the "Analysis end Forecasting Group" ( GAP ) on Open Network Provision (ONP ) in the
      Community, Brussels , 20 January 1988 .
6
      see footnote 5 .
 ---pagebreak---                                                                                             7
II )  THE GENERAL CONTEXT: THE IMPLE M ENTATION OF THE COMM ON
      MARKET FOR TELECOMMUNICATIONS SERVICES UP TO 1992
As the discussions on the Green Paper have shown, a consistent approach to the issue of
the implementation of the common market for telecommunications services must take due
account of the requirement to ensure public service for all on the one hand, while
abolishing undue restrictions on the other.
Document COM(88)48 summarized the general reactions resulting from the consultation
on the Green Paper as follows :
"a broad consensus on the liberalization of value-added services, the high value end of the
overall spectrum of telecommunications services.
"the acceptance of the continuation of exclusive provision for network infrastructure. This
has met acceptance in most comments while receiving some criticism from both sides.
"the degree of competition in services other than value-added services. There is broad
general support for accepting exclusive provision of voice telephony, as long as it is defined
as switched voice telephony intended for the general public and as long as this is subject to
review.
"A number of comments hold that either special authorization schemes or exclusive
provision for other services, in particular telex and switched data communications intended
for general public use, are required. Special authorization schemes have been suggested as
a possible option for movement towards market opening in this area.
"Generally, comments hold that a broad provision of efficient Europe-wide and world-wide
communications to the public must be ensured ."
The Council, in its Resolution of 30 June, stated :
" Whereas the creation of an open common market in telecommunications services and
equipment is compatible with continued exclusive provision or special rights of
Telecommunications Administrations as regards the supply and the operation of the
network infrastructure and the provision of a limited number of basic services where such
exclusive provision is deemed essential, at this stage, for safeguarding the public service
role;
"Whereas the arguments in favour of continued exclusive provision or special rights, where
they exist, must be weighed carefully against the obligations of the Telecommunications
Administrations which will be retained but also against the restrictions which this may
impose on those connected to the network concerning present and future application for
their own use, shared use or provision to third parties; whereas this should take account of
the fact that the development of trade must not be affected to such an extent as would run
counter to the interests of the Community".
In reviewing its approach to the issue, the Commission has been guided by two basic
considerations :
      On the one hand, its duty of surveillance and its obligation to end restrictions which
      constitute infringements of the Treaty ;
 ---pagebreak---                                                                                             8
      On the other hand, the need to create the conditions for an open Community-wide
      market, by progressive harmonization.
In this context, it seems useful to recall the respective roles of Article 100A and the duties
of the Commission under Article 90 (3) of the Treaty.
On the one hand, Article 100A aims "at the approximation of the provisions laid down by
law, regulation, or administrative action in Member States which have as their object the
establishment and functioning of the internal market". The latter comprises, according to
Article 8A, referred to in Article 100A, "an area without internal frontiers in which the free
movement of goods, persons, services, and capital is ensured in accordance with the
provisions of this Treaty".
Article 100A has therefore a function of harmonization, in order to abolish barriers
resulting from a divergence of national legislation or regulations.
On the other hand, the Treaty, and in particular Article 90, entrusts to the Commission a
specific obligation of surveillance and a duty to act with regard to Member States
concerning their obligations under Article 90 ( 1 ) "not to enact nor maintain in force any
measure contrary to the rules contained in the Treaty", with regard to "public undertakings
and undertakings which Member States grant special or exclusive rights".
In the field of telecommunications services, this concerns in particular restrictions on the
freedom to provide services within the Community (Article 59), as well as compliance with
the Treaty’s competition rules applying to undertakings (Articles 85 and 86).
The Commission therefore considers that Article 100A and Article 90 are complementary
and cannot be substituted for each other. Accordingly, the Commission considers a two¬
pronged approach appropriate, emphasizing the complementarity' of progressive
harmonization (Open Network Provision - ONP) via Council Directives (Article 100A) and
action under the Commission’s obligation of surveillance and duty to act with regard to
compiuincc with Treaty rules (Article 90(3)) via a Commission Directive.
 Open Network Provision aims at providing the framework for harmonization facilitating
 the progressive implementation of a common market for telecommunications services.
 Correspondingly, the proposed draft Framework Directive is based on Article 100a of the
Treaty. It will be complemented by a Commission Directive on competition in the markets
 for telecommunications sep/ices, which the Commission intends to issue shortly under its
 mandate under Article 90(3) of the Treaty, to adjust the exercise of exclusive or special
 rights in this area to the requirements and obligations of the Treaty.
 The proposed Directive takes into account recent developments in international aspects of
 telecommunications policy. The progress of internal harmonization will also contribute to
 the development of the Community’s position in bilateral and multilateral relations. The
 Community and the Member States are discussing questions of mutual access to
 telecommunications services in the framework of the ITU, the GATT and the OECD.
 ---pagebreak---                                                                                              9
III ) THE APPROACH ADOPTED
The primary goal of the proposed Directive is the establishment of a structural (i.e.
procedural and organizational) framework for the development of harmonized conditions
for Open Network Provision.
The overall approach chosen is based on the report and the Reference Framework
established by SOG-T’s subgroup GAP7 and adopted by SOG-T in April 1988. The work
included a series of hearings with the participation of all interested parties, in particular
user organizations, service providers and industry.
COM(88)718 on progress on the definition of Open Network Provision
(O N P) summarizes the main results of the report as follows :
      harmonized ONP conditions should follow a number of basic guide-lines : conditions
      must be based on objective criteria ; conditions must be transparent and published in
      an appropriate manner ; conditions must not discriminate between nationals of
      Member States ; conditions must guarantee equality of access ;
      the development and implementation of ONP conditions should be progressive. The
      emphasis should be on the development of harmonized offerings specifically suited for
      value-added service providers but available to all users ;
      the importance of the development of open network standards is emphasized, in the
      framework of the overall Community approach to European standardization ."
The reference framework defines the following three main areas for the development of
harmonized ONP conditions :
      definition of harmonized technical interfaces and service features
      It is proposed that existing technical interfaces should be used wherever possible.
      Where new technical standards are required for ONP offerings, the European
      Telecommunications Standards Institute ( ETSI) should be requested to develop them ,
      in accordance with evolving European standards taking account, as appropriate, of
      international standardization.
      definition of harmonized usage conditions
      Common usage conditions which should apply for ONP offerings are indicated in the
      report. These refer to a number of parameters including : provision time ; contractual
      period ; quality of service ; conditions for shared use, third party use, resale of
      capacity and network inter-connection, as compatible with Community Treaty rules.
      definition of harmonized tariff principles
      The report indicates a number of guide-lines on tariff principles. In particular it
      proposes that tariffs for ONP offerings should be cost-oriented, be properly published,
      and apply to all users on a non-discriminatory basis."
7
      sec footnote 5 .
 ---pagebreak---                                                                                      10
Building on these recommendations, the enclosed draft Directive aims to provide the
guiding principles and the structural framework within which ONP will gradually develop.
Consequently, "Open Network Provision" is the end-product of the regulatory procedure
which is instituted by the proposed Directive rather than its immediate result.
 ---pagebreak---                                                                                           11
IV) MAJOR ELEMENTS OF THE PROPOSED DIRECTIVE
The regulatory and legislative means by which the proposed Directive aims to achieve
harmonized open access to and use of the public telecommunications network
infrastructure and public telecommunications services are substantive rules concerning the
"basic principles" and "essential requirements" with which the ONP conditions must comply;
procedural rules according to which Council Directives will be prepared on the basis of
Commission proposals; and organizational rules.
Art. 1-2 concern the scope of application of ONP conditions.
Art. 3 concerns the basic principles with which ONP conditions must comply and the
essential requirements upon which they must be based .
Arts. 4-6 provide for the definition of ONP conditions in various stages.
Art. 7 foresees a progressive process for the mutual recognition of declaration and/or
licensing ("authorization") procedures in the Community.
Art. 8 foresees a general review process for 1992 concerning the implementation of Open
Network Provision .
Art. 9 establishes the Senior Officials Group (SOG-T) as an advisory committee to assist in
the implementation of the Directive.
Art. 10 and 11 concern the bringing into force of the Directive.
Major elements of the draft Directive are reviewed below:
Scope of application
Harmonized ONP conditions must be implemented by the Member States "for open access
to, and open use of, the public network infrastructure and public services" (Art. 1 ).
The scope of application of ONP conditions is defined , in the proposed Directive, with
regard to "telecommunications organizations" and with regard to certain
telecommunications areas. "Telecommunications organizations" means the administrations
or private operating agencies recognized in the Community, providing public
telecommunications networks and/or public telecommunications services (Art. 2(1 )).
The Directive states that "ONP conditions will apply to those public telecommunications
networks and public telecommunications services for which the telecommunications
organizations are in law or in fact the sole or main providers either singly or jointly".
For specific areas, where there are other providers of comparable importance, those other
providers may be included under "telecommunications organizations" on decision by the
Council, acting on proposal by the Commission .
These provisions are intended to ensure, on the one hand the main objective of ONP, i.e.
harmonized open access to the basic public network infrastructure and basic public services
provided by the Telecommunications Administrations, and to provide, on the other hand,
for harmonized open access to basic public services also in areas where other providers
may be of comparable importance.
 ---pagebreak---                                                                                                 12
Criteria for O N P
The substantive criteria for ONP are defined in the proposed Directive,
      in terms of basic principles with which ONP conditions must comply (Art. 3 ( 1)), and
      in terms of certain essential requirements upon which ONP conditions must be based
     (Art. 3 (2)).
According to Art. 3(3) ONP conditions may additionally be derived from the exercise of
exclusive or special rights granted by Member States, as far as these "are compatible with
Community law".
The essential difference between the "basic principles" and the "essential requirements" is
their regulatory thrust: Whereas the "basic principles" are oriented towards harmonized
liberalization of telecommunications service provision, the "essential requirements"
delineate the conditions which may be imposed.
Art. 3 (2) of the proposed Directive provides that ONP conditions "must be based on
essential requirements" and enumerates these requirements which are of a non-economic
nature and, for reasons of general public interest,
"can be considered of such importance as to necessitate compliance as a matter of legal
obligation for gaining access to, and using public telecommunications networks and
services".
The basic principles (objectivity; transparency; non-discrimination; equality of access) have
also been emphasized by the GAP report cited above8.
As regards the essential requirements listed in Art. 3 (2) (security of network operation;
maintenance of network integrity; in justified cases, inter-operability of services and
protection of data; as well as the essential requirements in general applicable to the
connection of terminal equipment to the network9), the Green Paper' 0 has set out the key
role of these requirements.
The Council has, in its Resolution of 30 June 1988 11 , emphasized network integrity as "one
of the essential elements for a common market in telecommunications services" "working
on the principal of full interconnectivity between all public networks concerned in the
Community", underlined the need for "appropriate measures in standardization" to
promote the creation of Europe-wide services, and stated the need "to protect personal
 data".
       see footnote 5 .
       see Council Directive on the initial stage of the mutual recognition of type approval for
       telecommunications terminal equipment , 86/361 /EEC of 24 July 1988 .
       Green Paper ( C0M(87 ) 290 ).
       Council Resolution on the development of the Coromon Market for Telecommunications Services and
       Equipment 14) to 1992 , 30 June 1988 , 88/C257/01 .
 ---pagebreak---                                                                                          13
As regards inter-operability "in justified cases", "within the framework of Community law",
the Green Paper has emphasized the need for "requirements regarding standards for the
network infrastructure and services provided by the Telecommunications Administrations
or service providers of comparable importance, in order to maintain or create Community¬
wide inter-operability. These requirements must build in particular on Directives
83 / 189/ EEC and 86/361 / EEC, Decision 87/ 95 / EEC and Recommendation 86 / 659 / EEC"
Further, with Recommendation 81 /679/ EEC concerning the ratification of the Council of
Europe convention for the protection of individuals with regard to automatic processing of
personal data, the Commission has expressed the importance which it accords to this area.
Procédural rules
Arts. 4-6 contain, in essence, a nine-step procedure involving
      the Commission,
      the Council,
      the Senior Officials Group on Telecommunications (SOG-T) and its sub-group GAP
      (Group for Analysis and Forecasting), and
      various standardization organisations, in particular the European
      Télécommunications Standards Institute ( ETSI ), and CEN/CENELEC.
Step 1 : Definition of areas which ONP conditions shall concern
The first step in the definition of ONP conditions is the definition of areas for which
detailed ONP conditions are to be drawn up. These areas ( i.e. access to network resources,
access to basic switched services) will be defined by the Council on a proposal from the
Commission in an Annex to the proposed Directive.
Step 2 : Definition of priority areas
The second step toward the definition of ONP conditions is the definition of priority areas
for which ONP conditions will be drawn up . These priority areas are defined on the basis
of the areas designated by the Council.
Initially, the priority areas will be defined in an Annex to the proposed Directive. Later on ,
updates of this list will be drawn up by the Commission after consultation with the Senior
Officials Group on Telecommunications (SOG-T).
There is a need to keep the procedure for defining "priority areas" flexible and to allow for
consultation with technical experts. This need is better served by the proposed two-step
procedure than by a procedure which would entrust the Council with both the designation
of "specific areas" and the determination of "priorities".
Step 3 : Analysis and reports on priority areas
On the basis of the priority decision the Commission requests SOG-T to prepare detailed
analytical reports according to defined time schedules on the priority areas chosen .
 ---pagebreak---                                                                                          7 1
                                                                                        * -r
This corresponds to the proven procedure currently followed, with the major role beina
played by SOG-Ts sub-group GAP. In COM(88) 701 ("Progress on the definition of Open
Network Provision - short status report"), the Commission considered this procedure as
satisfactory. However, it urged more user and industry participation in the national
delegations to GAP and extensive use of hearings of user organizations, industry and the
other parties concerned.
Step 4: The Commission invites public comment on the reports (see below)
Step 5: The Commission then requests the standardization organizations to draw no
European standards as a basis for harmonized technical interfaces and/or service features,
where required
According to the recent evolution of the European standardization system the main role is
foreseen as falling to ETSI, created according to the proposals in the Green Paper, in co¬
operation with CEN/CENELEC as appropriate.
This procedure is in accordance with the Commission’s policy of delegating the elaboration
of common, Community-wide standards to standardization bodies rather than embarking
on lengthy law-making procedures.
Step 6: Publication of reference to European Standards, taking account, as appropriate, of
international standardization, drawn up as a basis for harmonized technical interfaces
and/or service features for QNP
Step 7: The Commission submits proposals for each priority area, based on the elements
listed in the ONP reference framework, as applicable to the area concerned (Art. 6)
This concludes the preparatory phase. At this procedural junction, the transformation of
ONP conditions into Community law begins.
Consequently, the Commission synthesizes at this stage the information and proposals
received from the various actors during the preceding phases of the decision-making
process, i.e. :
      the detailed analysis of ONP conditions prepared by SOG-T / GAP,
      the public comments received from the parties concerned during the public comment
      phase,
      the European standards prepared by the respective standardization organizations as a
      basis for technical interfaces and/or service features, where required, and
      scrutiny with regard to compatibility with Community law.
Step 8: The Council adopts the Directive on ONP conditions for the area in question
Step 9: Member States implement the Directive on ONP conditions for the area in
question
 ---pagebreak---                                                                                           15
Public comment
The Commission considers it essential that the process of working out ONP conditions
should allow for the full input by all parties concerned, in particular user organizations,
industry, trade unions and organizations representing consumer interests.
Art. 5 foresees therefore that the Commission shall invite public comment by the "parties
concerned" on the reports established in consultation with SOG-T, in particular by GAP.
Progressive mutual recognition of licensing procedures
A major aim of the progressive harmonization process implied by the progressive
implementation of Open Network Provision must be the mutual recognition of declaration
(registration) and/or licensing (authorization) procedures, where those procedures arc
required in Member States for the provision of telecommunications services via public
telecommunications networks, as far as compatible with Community-law.
Mutual recognition must imply for the service provider that ultimately a single
registration/license obtained in any Member State will entitle him or her to provide
services throughout the Community, without having to undertake any additional
procedures.
The Commission considers that the time-scale for achieving this goal will depend on the
progress of harmonization of conditions through the establishment of ONP.
Art. 7 foresees that the Council, on proposal by the Commission , shall adopt measures
towards this end. These proposals should take account of the difference in
tele ommunications network and services development in the Community, which may exist
in the area concerned .
External aspects
The Council, in its Resolution of 30 June 1988 12, emphasized the importance of "fully
taking into account the external aspects of Community measures on telecommunications".
The progressive establishment of Open Network Provision in the Community corresponds
to world-wide trends in telecommunications markets, such as the development of Open
Network Architecture (ONA) in the United States.
The Community attaches major importance to the continued growth of cross-border
telecommunications services, to the contribution of telecommunications services provided
by companies, firms, or persons established in a Member States of the Community to the
growth of the Community market, and to the increased participation of community service
providers in third country markets. It will therefore be necessary, as detailed Directives are
elaborated, to ensure that these objectives are taken into account with a view to reaching a
situation where the realization of the more open Community market for
telecommunications services will, where appropriate, be accompanied by reciprocal market
opening eslewhere. This can be achieved either in the framework of multilateral
negotiations, in particular in the GATT, or through bilateral negotiations.
12
     see footnote 11 .
 ---pagebreak---                                                                                               16
Additional aspects
The draft Directive does not address communications via satellite which need special
consideration, nor does it address the problems of^mass media, meaning broadcasting and
television, for which the Commission has submitted proposals to Council.
Finally, the draft Directive is using a basic set of definitions sei out in Art. 2. It is the
progressive working out of the ONP conditions which will lead, by itself, to more detailed
definitions; in particular, the progressive harmonized definition of network termmado:i
points and network usage conditions will lead to a progressive indirect delineation of the
central concept of public network infrastructure.
 ---pagebreak---                                                                                      17
V)    CONCLUSIONS
The progressive establishment of harmonized conditions for open access to, and open use
of, the public telecommunications network infrastructure and public telecommunications
services is central to the achievement of an effective Community market for
telecommunications services, as emphasized by the Council in its Resolution of 30 June
1988.
The attached draft Directive will establish a stable framework for this process.
The Council is therefore requested to adopt the attached proposal for a Directive.
 ---pagebreak---                                          18
 PROPOSAL FOR A COUNCIL DIRECTIVE ON THE
ESTABLISHMENT OF THE INTERNAL MARKET FOR
      TELECOMMUNICATIONS SERVICES
     THROUGH THE IMPLEMENTATION OF
     OPEN NETWORK PROVISION (O N P)
 ---pagebreak---                                                                                             19
    THE COUNCIL OF THE EUROPEAN COMMUNITIES,
   Having regard to the Treaty establishing the European Economic Community, and in
   particular Articles 100a thereof ;
  Having regard to the proposal from the Commission ;
 In co-operation with the European Parliament 13 ;
 Having regard to the opinion of the Economic and Social Committee 14 ;
 1.    Whereas Article 8a of the Treaty stipulates that the internal market shall comprise an
       area without internal frontiers in which the free movement of services is ensured, in
       accordance with the other provisions of the Treaty ;
2.    Whereas the Commission has submitted a Green Paper on the Development of the
      Common Market for Telecommunications Services and Equipment (COM(87)290),
      dated 30th June 1987, and a Communication on the Implementation of the Green
      Paper up to 1992 (COM(88)48), dated 9th February 1988 ;
3.     Whereas the Council has adopted on 30th June 1988 a Resolution on the development
       of the common market for telecommunications services and equipment up to 199215 ;
 13
       j c ...
 H
        j c   ...
 15
        ( 88/ C/ 257/ 01 )
 ---pagebreak---                                                                                          20
4.  Whereas the Commission has issued a Directive on competition in the markets in
    telecommunications services16 ;
5. Whereas, given the obstacles resulting from diverging laws, regulations, or
   administrative actions in the Member States, the full establishment of a Community¬
   wide market in telecommunications services can only be achieved by the rapid
   introduction of harmonized principles and conditions for Open Network Provision, in
   order to avoid a series of contentious cases and lengthy conflict, in particular for trans¬
   frontier provision of services ;
6. Whereas, since situations differ, and technical and administrative constraints exist in
   the Member States, progress towards this objective should be made in stages ;
7. Whereas the conditions of Open Network Provision must be consistent with certain
   principles and should not restrict access to networks and services except for reasons of
   general public interest, hereinafter referred to as ‘essential requirements’ ;
8. Whereas the definition and interpretation of such principles and essential
   requirements must take full account of the fact that any restrictions of the right to
   provide services within and between Member States must be objectively justified, must
   follow the principle of proportionality and must not be excessive in relation to the aim
   pursued ;
9. Whereas the working out in detail of harmonized conditions of Open Network
   Provision must be a progressive process and should be prepared in consultation with
   the Member States, the Telecommunications Administrations and the other parties
   concerned, and in particular with the assistance of the Senior Officials Group on
   Telecommunications (SOG-T) ;
 ---pagebreak---                                                                                           21
10. Whereas the definition of harmonized conditions for Open Network Provision must
      be a process open to all parties concerned and therefore sufficient time should be
      given for public comment ;
1 1 . Whereas the Community-wide definition of harmonized technical interfaces and
      access conditions must be based on the definition of common technical specifications
      based on international standards and specifications ;
12.   Whereas work in this area must take full account, inter alia, of the framework
      provided by Council Directive 83/ 189/EEC laying down a procedure for the provision
      of information in the field of technical standards and regulations, Council Directive
      86/361/EEC on the initial stage of the mutual recognition of type approval for
      telecommunications terminal equipment and Council Decision 87/95/EEC on
      standardization in the field of information technology and telecommunications ;
13 . Whereas the formal adoption of the statutes of the European Telecommunications
      Standards Institute ( ETSI ) on 12 February 1988, and of the associated internal rules,
      has created a new mechanism for producing European telecommunications
      standards ;
14 . Whereas the general guide-lines agreed with the Joint European Standards Institution
      CEN-CENELEC henceforth make it possible to entrust specialized technical
      harmonization work to this body ;
15 . Whereas the Community-wide definition and implementation of clear harmonized
      network termination points establishing the physical interface between the network
      infrastructure and use; s’ and other service providers’ equipment will be an essential
      element of the overall concept of Open Network Provision ;
16. Whereas Commission Directive 88 /301 / EEC on competition in the markets in
 ---pagebreak---                                                                                       22
     telecommunications terminal equipment17 requires Member States to ensure that
     users who so request shall be given access to public network termination points within
     a reasonable time period ;
17. Whereas the principal aim of the establishment of an internal market in
     telecommunications services must be the freedom to provide services in the whole of
     the Community once authorized or legally provided in a Member State ;
18. Whereas this will require the mutual recognition of licensing procedures for services
     provision where such authorization may be required ;
19. Whereas such mutual recognition of licensing procedures required must depend on
     progress on the harmonization of the conditions for service provision, by the
     progressive implementation of Open Network Provision ;
20. Whereas in its Resolution of 30th June on the development of the common market for
     telecommunications services and equipment up to 1992 the Council considered the
     taking fully into account of the external aspects of Community measures on
     telecommunications to be a major policy goal ;
21 . Whereas in accordance with the Council Decision of 28 November 1988, the Member
     States have accompanied their signature of the Final Acts of the World
     Administrative Telegraph and Telephone Conference (WATTC-88) by a joint
      declaration stating that they will apply the International Telecommunications
      Regulations in accordance with their obligations under the EEC Treaty ;
22. Whereas the Community attaches major importance to the continued growth of cross-
17
      OJ L 131 / 73
 ---pagebreak---                                                                                          23
     border telecommunications services, to the contribution of telecommunications
     services provided by companies, firms or natural persons established in a Member
     State of the Community to the growth of the Community market, and to the increased
     participation of Community service providers in third country markets ; whereas it will
     therefore be necessary, as detailed Directives are elaborated , to ensure that these
     objectives are taken into account with a view to reaching a situation where the
     realization of the more open Community market for telecommunications services will ,
     where appropriate, be accompanied by reciprocal market opening elsewhere ;
     Whereas this can be achieved either in the framework of multilateral negotiations, in
     particular in the GATT, or through bilateral negotiations ;
23 . Whereas this Directive should not address the problems of mass media, meaning
     broadcasting and distribution of television programmes via telecommunications
     means, in particular cable television networks, which need special consideration ;
24 . Whereas this Directive should not address communication via satellite for which,
     according to the Council Resolution of 30th June 1988, a common position should be
     worked out ;
25. Whereas the establishment of harmonized technical conditions, usage conditions and
     tariff principles under Open Network Provision according to this Directive addresses
     with priority public telecommunications networks and public telecommunications
     services for which Telecommunications Administrations are in law or in fact the sole
     or main providers ;
 ---pagebreak---                                                                                    24
26. Whereas the effects on the working of the internal market of any remaining conditions
    for access to telecommunications services which have not been harmonized should be
    reviewed by the Council and the Commission during 1992, taking account of
    technological development ;
 ---pagebreak---                                                                                        25
HAS ADOPTED THIS DIRECTIVE :
                                           Article 1
This Directive provides for the harmonization of conditions for open access to, and open
use of, the public telecommunications network infrastructure and public
telecommunications services.
These conditions will apply in particular also for the provision of services via these
telecommunications means within and between Member States, including in particular the
provision of services by companies, firms or natural persons established in a Member State
of the Community other than that of the company, firm or natural person for whom the
services are intended, in order to establish a common market for telecommunications
services.
                                           Article 2
For the purposes of this Directive :
1.   Telecommunications organizations’ means the administrations or private operating
     agencies recognized in the Community, providing public telecommunications networks
     and/or public telecommunications services.
     The bodies listed in Annex 1 fulfil these criteria .
2.   ‘Public network’ means a public telecommunications infrastructure which provides for
     the transmission of services between and including defined termination points, be it by
     wire, radio link, or any other electromagnetic or optical means.
 ---pagebreak---                                                                                           26
3. ‘Public network termination point’ means the physical connection and technical access
   specifications required to gain access to, and to communicate efficiently via, a public
   network.
4. ‘Open Network Provision Conditions’ means the conditions harmonized according to
   the provisions set forth in this Directive which may be imposed on users and/or
   providers of services for access to and use of the public network and/or public
   telecommunications services (hereinafter referred to as ‘ONP conditions’).
   ONP can include in particular harmonized conditions with regard to :
             technical interfaces, including the definition and implementation of public
             network termination points, where required ;
              usage conditions, including access to frequencies where required ;
              tariff principles.
    ONP conditions will apply to the areas defined according to Article 4. ONP
   conditions will apply to access or use of those public telecommunications networks and
    public telecommunications services for which the telecommunications organizations
    defined under 1 . are in law or in fact the sole or main providers either singly or jointly.
    For specific areas, where other service providers are of comparable importance, the
    Council, acting by a qualified majority on a proposal from the Commission, shall
    supplement as necessary the bodies listed under 1.
 ---pagebreak---                                                                                       27
5. ‘Essential requirements’ means requirements of a non-economic nature which, for
   reasons of general public interest, can be considered of such importance as to
   necessitate compliance as a matter of legal obligation for gaining access to, and using
   public telecommunications networks and services, within the framewework of
   Community law.
6. ‘Technical specifications’, ‘standards’ and ‘terminal equipment’ are given the same
   meaning as in Article 2 of Directive 86/361/EEC on the initial stage of the mutual
   recognition of type approval for telecommunications terminal equipment.
                                         Article 3
1. ONP conditions must comply with a number of basic principles. These principles are
   that :
             conditions must be based on objective criteria ;
             conditions must be transparent, and published in an appropriate manner ;
             conditions must guarantee equality of access, and must be non-
             discriminatory, in accordance with Community law.
2. ONP conditions must be based on essential requirements, within the framework of
   Community law. These essential requirements are :
             security of network operations ;
             maintenance of network integrity ;
 ---pagebreak---                                                                                       28
             interoperability of services, in justified cases ;
             protection of data, in justified cases ;
             the essential requirements in general applicable to the connection of terminal
             equipment to the network.
3.  ONP conditions must not allow for any additional restrictions on the use of the public
    network and/or public services except those which may be derived from the exercise
    of exclusive or special rights granted by Member States, and are compatible with
    Community law.
4.  The Council, acting by a qualified majority on a proposal from the Commission shall
    supplement as necessary the lists drawn up under 1. and 2..
                                            Article 4
 1. ONP conditions shall be defined in stages, in accordance with the procedure set out
    hereafter.
 2.  ONP conditions shall concern the areas listed in Annex 2.
     The Council, acting by a qualified majority on a proposal from the Commission, shall
     supplement as necessary this list.
 ---pagebreak---                                                                                            29
3. The priority areas for which ONP conditions shall be drawn up initially are listed in
   Annex 3 .
   The Commission shall draw up each year, after consulting the Committee referred in
   Article 9, an updated list of priority areas.
4. For the priority areas chosen, the Commission shall :
   ( 1)      carry out detailed analysis, in consultation with the Committee referred to in
             Article 9, according to defined time schedules, and establish reports on the
             results of this analysis ;
   (2)       request, on the basis of the reports on this analysis, taking into consideration
             the comments received during the public comment period according to
             Article 5.1 , and with due regard to the general programme of standardization
             in the information technology sector, the European Telecommunications
             Standards Institute (ETSI) to draw up European standards, taking account,
             as appropriate, of international standardization as a basis for harmonized
             technical interfaces and/or service features where required, within specified
             time limits; in so doing, it shall co-ordinate, in particular, with the Joint
             European Standards Institution CEN-CENELEC ;
   (3 )     draw up ONP conditions in accordance with the elements listed in the ONP
             reference framework in Annex 4, based on the general principles and
             requirements set out in Article 3.
 ---pagebreak---                                                                                        30
                                           Article 5
1.   The Commission shall invite, by publication in the Official Journal of the European
     Communities, public comment by all parties concerned on the reports established
     according to Article 4.4(1). The period for public comment will be no less than three
     months from the date of publication.
2.   Reference to European standards drawn up as a basis for harmonized technical
     interfaces and/or service features for ONP according to Article 4.4(2) shall be
     published in the Official Journal of the European Communities.
                                           Article 6
Following the completion of the procedures set forth in Articles 4 and 5, and acting by a
qualified majority on the proposal from the Commission, the Council shall adopt detailed
Directives for the establishment of ONP conditions for each area which shall include :
              a time schedule for the implementation of harmonized technical interfaces
              and/or service features where required, including the implementation of
              harmonized public network termination points, as appropriate ;
              details of harmonized usage conditions ;
              details of harmonized tariff principles ;
     and any other aspects of relevance.
 ---pagebreak---                                                                                         31
                                             Artide 7
1.    Depending on the progress of harmonization of conditions through the establishment
     of ONP according to the procedures set out under Articles 4 , 5, and 6, the Council
     acting by qualified majority on a proposal from the Commission shall adopt measures
     specifying the conditions under which the mutual recognition of declaration and/or
     licensing procedures for the provision of services via public networks shall be ensured
     where such declaration or license is required by Member States.
     The measures shall eliminate any requirement for additional declaration or licensing
     in other Member States, once a service is legally produced in a Member State.
2.   Towards this end, the Council acting by a qualified majority on a proposal by the
     Commission shall adopt measures for harmonising declaration and /or licensing
     procedures, where required.
3.   In accordance with Article 8c of the Treaty, these proposals may take into account, to
     the extent required up to the end of 1992, the effort that certain economies showing
     differences in development of these services, will have to sustain during the
     establishment of the harmonized conditions and declaration and/or licensing schemes
     referred to under 1 . and 2 ..
                                          Article 8
During 1992, the Council, on the basis of a report by the Commission , shall review the
effect on the working of the internal market of any remaining conditions for access to
telecommunications services which have not been harmonized , taking account of
technological development and in accordance with the general procedure foreseen under
Article 100b of the Treaty.
 ---pagebreak---                                                                                       32
                                         Artide 9
1. The Commission shall be assisted by a committee of an advisory nature composed of
   the representatives of the Member States and chaired by the representative of the
   Commission. This committee shall be the Senior Officials Group on
   Telecommunications (SOG-T).
2. The representative of the Commission shall submit to the committee a draft of the
   measures to be taken . The committee shall deliver its opinion on the draft, within a
   time limit which the chairman may lay down according to the urgency of the matter, if
   necessary by taking a vote.
3. The opinion shall be recorded in the minutes; in addition, each Member State shall
   have the right to ask to have its position recorded in the minutes.
4. The Commission shall take the utmost account of the opinion delivered by the
   committee. It shall inform the committee of the manner in which its opinion has been
   taken into account .
                                         Article 10
1. Member States shall bring into force the laws regulations and administrative
   provisions necessary in order to comply with this Directive by 1 .at the latest.
   They shall forthwith inform the Commission thereof.
2.  Member States shall ensure that the texts of the provisions of national law which they
    adopt in the field governed by this Directive are communicated to the Commission.
 ---pagebreak---                                        Article 1 1
This Directive is addressed to the Member States.
                                               Done at Brussels,
 ---pagebreak---                                                 ANNEX 1
                 BODIES FULFILLING THE CRITERIA OF ARTICLE 2.1
Belgium
Régie des Télégraphes et des Téléphones /
Regie van Telegrafie en Telefonie
Denmark
Kobenhavns Telefon Aktieselskab
Jydsk Telefon
Fyns Kommunale Telefonselskab
Post-og Telegrafvaesnet
Statens Teletjeneste
Federal Republic of Germany
Deutsche Bundespost
France
Direction Générale des Télécommunications (France Télécom)
and Transpac
Greece
Ote / Hellenic Télécommunications Organization
Ireland
Telecom Eireann
ftaly
Amministrazione delle Poste e delle Telecomunicazioni
Azienda di Stato per i Servizi Telefonici
Società Italiana per l’Esercizio Telefonico SpA
Italcable
Telespazio SpA
 ---pagebreak--- Luxembourg
Administration des Postes et des Télécommunications
The Netherlands
Post, Telegraaf en Telefoon
Portugal
Correios e Telecommunicacoes de Portugal
Telefones de Lisboa e Porto
Companhia Portuguesa Radio Marconi
Spain
Compania Telefonica Nacional de Espana
United Kingdom
British Telecommunications pic
Mercury Communications Ltd
City of Kingston-Upon-Hull
 ---pagebreak---                                                                                        36
                                                ANNEX 2
                  AREAS FOR WHICH OPEN NETWORK CONDITIONS
             ARE TO BE DRAWN UP IN ACCORDANCE WITH ARTICLE 42
ONP conditions shall be drawn up progressively for the following areas :
Access to network resources :
    leased lines ;
    new types of access to the local network infrastructure, such as access, under certain
    conditions, to the circuits connecting subscriber premisses to the public network
    exchange, without disruption to the basic service for which this connection may be
    provided (e.g. telephony, telex) ;
    ISDN (Integrated Services Digital Network) network resources ;
    broadband network resources, according to progress on definition and technological
    development.
Access to basic switched services intended for general public use :
    voice telephony service ;
     telex service ;
     circuit switched public data services ;
     packet switched public data services ;
 ---pagebreak---                                                                               37
ISDN (Integrated Services Digital Network) services, as applicable ;
mobile services, as applicable ;
broadband services, as applicable and according to progress on definition and
technological development.
 ---pagebreak---                                               ANNEX 3
                         PRIORITY AREAS FOR WHICH ONP
                 CONDITIONS SHALL BE DRAWN UP INITIALLY IN
                          ACCORDANCE WITH ARTICLE 43
Access to :
    - leased lines ;
       packet switched public data services ;
       ISDN network resources and services, as applicable.
 ---pagebreak---                                                                                         39
                                                 ANNEX 4
              REFERENCE FRAMEWORK FOR THE ELABORATION OF
             ONP CONDITIONS IN ACCORDANCE WITH ARTICLE 4.4(3 )
The elaboration of ONP conditions should proceed according to the following reference
framework :
1   Definition of harmonized technical interfaces and service features
    For ONP conditions the following scheme should be taken into account for the
    definition of technical interfaces at appropriate termination points :
    - For existing services, existing interfaces should be adopted. Enhancement of such
       interfaces may be considered for additional capabilities ;
    - For entirely new services existing interfaces should also be adopted, as far as
       applicable. When existing interfaces are not suitable, enhancements, or new
       interfaces, will have to be specified ;
    - For services and networks that are yet to be introduced, but for which the
       standardization programme has already commenced, ONP requirements should be
       taken into account when specifying new interfaces.
    ONP requirements must be, wherever possible, in line with the on-going work on
    CCITT and CEPT recommendations.
    Work in this area shall take full account of the framework given by Council Directive
    83 / 189/EEC laying down a procedure for the provision of information in the field of
    technical standards and regulations, Council Directive 86/36 1 / EEC on the initial
    stage of the mutual recognition of type approval for telecommunications terminal
    equipment and Council Decision 87/95/EEC on standardization in the field of
    information technology and telecommunications.
    Work shall include the full definition of network termination points where required
    and not covered under appropriate procedures elsewhere.
 ---pagebreak---                                                                                        40
   ONP offerings shall in general present increased versatility compared with existing
   offerings. Correspondingly, additional features should be identified where required.
   Under ONP such additional features may be classified as :
   - inclusive if they are provided in association with a specific interface and included in
      the standard offering ;
   - optional if they can be requested as an option with regard to a specific ONP
      offering, subject to an additional tariff.
   Work shall include the elaboration of proposals for time schedules for introduction of
   interfaces and service features, taking account of the environment of
   telecommunications networks and services in the Community.
2. Definition of harmonized usage conditions
   Usage conditions shall identify conditions of access and of supply, as far as required.
   They may include in particular the following attributes as applicable :
   - maximum provision time (delivery period) ;
    - minimum contractual period ;
    - quality of service, including, as applicable :
             . availability
             . mean time to repair
             . transmission quality
    - maintenance and fault reporting, including, as applicable :
              . access to network maintenance facilities
              . access to network diagnostic facilities
              . access to network fault reporting facilities
 ---pagebreak---                                                                                             41
   - conditions for resale of capacity ;
   - conditions for shared use ;
   - conditions for third party use ;
   - conditions for interconnection with public and private networks ;
   Usage conditions may include conditions regarding access to frequencies, as
   applicable, and measures concerning protection of personal data and confidentiality of
   transactions, where required.
3. Definition of harmonized tariff principles
   Fair and open access of users and competitive service providers to network resources
   and services requires a clear definition of tariff principles. Tariff principles must be
   guided by the general principles applying to ONP :
             tariffs must be based on objective criteria and must not impose directly or
             indirectly unfair purchases or selling prices. They must be, in particular, cost-
             oriented ;
             tariffs must be transparent and must be properly published . With regard to
             service elements, tariffs must be sufficiently unbundled, in order to avoid
             obligations and charges for users, which have no connection with the subject
             of the uses sought. In particular, specific network or service features should
             be charged independently of the charge for transmission via the network
             (bearer capability) .
             tariffs must be non-discriminatory and guarantee equality of treatment .
   Specific charges for access to network resources or services must be justified on the
   basis of objective criteria, based on, inter alia, fair sharing in the global cost of the
   resources used .
 ---pagebreak---                                                                                     42
4. Common principies
   The definition of harmonized usase conditions and tariff principles under 2. and 3 . will
   take due account of the applicable competition rules of the Treaty.