E-communications Law Course – Part 1
E-communications Law Course
4. September 2007
Introduction and Overview
Per-Kaare Svendsen
1. Introduction
Ÿ Communications technology and market developments
Ÿ Brief introduction to EU electronic communications regulatory framework (sector specific regulatory framework)
Ÿ Regulatory principles
Ÿ Liberalisation and harmonisation
Ÿ Relationship between competition law and E-Com law
Ÿ Regulatory bodies (NRAs and EU).
Ÿ Universal Service, End User rights, consumer protection and quality of service, numbering and licensing
2. Key terms (quick dictionary)
Ÿ 2003 package: EU legislation adopted in 2002
Ÿ 2G: generic term for second generation of mobile telephone networks (i.e. GSM)
Ÿ 3G: generic term for third generation of mobile telephone networks (i.e. UMTS)
Ÿ 98 package: EU legislation up to 1998
Ÿ 99 Review: EU review of 98 package
Ÿ Access network: connection from the customer to the network
Ÿ ADSL: Asynchronous Digital Subscriber li
Ÿ Competition law= art 81 and 82 of EC Treaty + merger regulation
Ÿ Core network: (backbone network) connections between network elements
Ÿ DSL: Digital Subscriber Line – digital connection over telephone connection to the home
Ÿ 'electronic communications network' means transmission systems and, where applicable, switching or routing equipment and other resources which permit the conveyance of signals between defined termination points by wire, by radio, by optical or by other electromagnetic means; it covers inter alia satellite networks, fixed and mobile terrestrial networks, networks used for radio and television broadcasting, and cable TV networks, irrespective of the type of information conveyed.
Ÿ 'electronic communications service' means services provided for remuneration which consist wholly or mainly in the transmission and routing of signals on electronic communications networks; it covers inter alia telecommunications services and transmission services in networks used for broadcasting. It does not cover services such as the content of broadcasting transmissions, delivered using electronic communications networks and services.
Ÿ Guidelines: EU Commission guidelines on SMP
Ÿ Interconnection: linking together of networks and communication between networks (i.e. subscriber A in network X can call subscriber B in network Y)
Ÿ IP: internet protocol
Ÿ ISDN: Integrated Subscriber Digital Network (narrowband digital access to the home over standard telephone line)
Ÿ ISP: Internet Service Provider
Ÿ NCA: National Competition Authority
Ÿ NRA: National Regulatory Authority
Ÿ Origination: the setting up of a call from subscriber A to subscriber B
Ÿ PBX: Private branch exchange, telephone exchange on customer’s premises
Ÿ POI: Point of interconnection between two operators.
Ÿ PoP: Point of presence, point to which a user connects user equipment to the network
Ÿ Recommendation: EU Recommendation on relevant markets
Ÿ SMP: Significant market power
Ÿ Termination: completion of a call from subscriber A to subscriber B
Ÿ Transit: when a call from subscriber A in network X to subscriber B in network Y passes trough network W
Ÿ VoIP: Voice over Internet Protocol
Ÿ xDSL: generic form of Digital Subscriber Line – digital connection over telephone connection to the home
3. Technology and Markets
Ÿ Content, Network and Services
Ÿ Common technologies
o Transmissions systems
o Switching or routing equipment
o Terminal equipment
o Network Management Systems
o Billing Systems
Ÿ Access Networks and Core Networks
Ÿ Services : Voice telephony (mobile, fixed, VoIP), SMS, Data and Video
Figur 1 Relationship between Content, Network and Services
4. What is e-com law?
Ÿ E-Com law is the regulation of specific issues such as
o Provisioning of telecommunications equipment (i.e. technical issues (type approvals etc)
o Network infrastructure (i.e. frequency administration (scarce resource distribution) and minimum requirement)
o Services (i.e. minimum requirements, consumer issues etc.)
o Sector specific competition law (Ecom Regulation)
§ Creating a level playing field for the old monopolies and the new entrants
Ÿ Specific contract types in the E-communications sector
o mutual dependency
o interconnection & interoperability
o purchase of equipment
o service agreements
Ÿ Content regulation fall outside the E-communications law and is generally covered by Media Law, Electronic Commerce, Internet Governance
Ÿ Public Regulation of E-Communications distinguish between
(1) Competition issues = establishing and ensuring sustainability of competitive markets
(2) non-competition public policy issues = provisioning of telecommunications services to the public (i.e. public service approach)
Ÿ These lectures will focus on competition issues but will touch upon other non-competition public policy issues
5. Key issues in the sector specific competition law
Ÿ Significant Market Power (SMP)
o Regulatory tool
o Definition of relevant markets
o Market analysis
o Designation of SMP
Ÿ Remedies where SMP exist (i.e. only for SMP operators)
o Duty to deal
o Non-discrimination
o Transparency
o Separation issues
o Price control
Ÿ Other obligations may be imposed on non-SMP operators (i.e. duty to interconnect and technical standard)
Ÿ Access and Interconnection
o Why is access regulated?
o Different types of Access
6. Background
6.1 Developments
Ÿ From 1987 to 1998: KEYWORD: Liberalisation
Ÿ From 1998 to 2003 KEYWORD: Harmonisation (Review and revise liberalisation)
o Political and economic reasons; distinguish between infrastructure and services. 1998 package was far to complex – need for simplification.
Ÿ The 2003 regulatory package implemented: KEYWORD: revise and simplify
o Overview; Key Aspects; Scope; Main Changes; The Framework Directive
Ÿ 2004-2005 Market Analyses and new regulations in force
Ÿ 2006 – review of 2003 regulatory package
6.2 From 1998 to 2002
o The 1999 Review follow up: Communication on the 1999 Communications Review (10.11.99). Public consultation on 1999 Review Communication (15.2.00). European Commissions Communication on the results of the public consultation
o Document Links:
o http://europa.eu.int/ISPO/infosoc/telecompolicy/review99/com2000-239en.htm
o http://europa.eu.int/information_society/policy/ecomm//todays_framework/index_en.htm
6.3 2003 Regulatory Package
Ÿ Legal instruments replacing the current regulations
Ÿ European Council and Parliament adopted a package of five directives + one regulation
Ÿ Date of application: 25 July 2003
Ÿ Regulation of unbundled access to the local loop adopted 12.07.2000
6.4 From 2003 to 2010
Ÿ The 2006 Review : Communication on market review (08.02.06). 2006 Review Communication: 28.06.2006 [1] Draft Commission Recommendation relevant markets [2] Public consultation (report to be published in 2007).
Ÿ The “2009 Package”
o 2007: expect draft legislative proposals.
o Revised version of the Recommendation on relevant markets
o The revised framework is expected to be implemented in Member States around 2009 - 2010.
6.5 The five policy aims
Ÿ Promote more effective competition;
Ÿ React to technological and market developments;
Ÿ Remove unnecessary regulation and simplify associated administrative procedures;
Ÿ Strengthen the internal market; and
Ÿ Protect consumers
Ÿ NB: Forebearance (no more regulation than necessary)
6.6 Why revise framework?
Ÿ eEuropa aim: create better Information Society framework
Ÿ Strengthening trade within Europe and competitive advantages against USA/Asia
Ÿ Regulatory frameworks focus shifts from:
Ÿ Deregulation (abolish monopolies) to
Ÿ Regulation of a competitive playing field create and stimulate competition = ”creating a level playing field”.
Ÿ Expansion of the EU – accession of new member states
Ÿ Results of Convergence: arbitrary and complex regulation
7. Background: Four focus areas
Ÿ Spectrum management
o effective market-oriented strategy for spectrum management in Europe’s internal market,
Ÿ Less is more:
o regulating less, but more effectively, by phasing out ex-ante regulation on at least 6 of the 18 sectoral markets regulated today,
Ÿ Faster market review procedure
o streamlining the market review procedure, to make it faster, less burdensome and better focused on real bottlenecks, and
Ÿ Single market: harmonisation
o consolidating the single market, by ensuring that EU rules and remedies are applied consistently across all EU Member States.
8. The regulatory framework (EU)
Ÿ Legal texts + associated measures apply in 25 EU Member States.
Ÿ The goals are to:
o encourage competition in the e-communications markets,
o improve the functioning of the internal market; and
o guarantee basic user interests that would not be guaranteed by market forces.
Ÿ The framework provides a set of rules that are simple, aimed at deregulation, technology neutral; and sufficiently flexible to deal with fast changing markets in the electronic communications sector.
Ÿ Overview of 2003 Package
Directive / ReferenceFramework / Directive 2002/21/EC on a common regulatory framework Sets out the main principles, objectives and procedures for an EU regulatory policy regarding the provision of electronic communications services and networks.
Access and interconnection / Directive on Access and Interconnection (2002/19/EC) stipulates procedures and principles for imposing pro-competitive obligations regarding access to and interconnection of networks on operators with SMP.
Authorisation / Directive on Authorisation of electronic communications networks and services (2002/20/EC) introduces a system of general authorisation, instead of individual or class licences, to facilitate entry in the market and reduce administrative burdens on operators.
Universal service / Directive on Universal Service and Users’ Rights (2002/22/EC) requiring a minimum level of availability and affordability of basic electronic communications services and guaranteeing a set of basic rights for users and consumers of electronic communications services.
Data protection / Directive on Personal Data and (name: Directive on piracy and electronic communications) (2002/58/EC) sets out rules for the protection of privacy and of personal data processed in relation to communications over public communication networks.
Radio spectrum / Decision on a Regulatory Framework for radio spectrum policy in the European Community (OJ L 108/1) establishes principles and procedures for the development and implementation of an internal and external EU radio spectrum policy.
Competition / Directive on Competition in the markets for electronic communication services (2002/77/EC) consolidating the legal measures based on Article 86 of the Treaty that have liberalised the telecommunications sector over the years.
Ÿ
9. The Framework Directive (1)
Ÿ Aims & objectives: promote an open and competitive market for communications networks, services and associated facilities; to contribute to the development of the internal market; ensuring in particular that there is no undue variation in the treatment of undertakings within the EU; benefit the European citizen; regulatory obligations should be the minimum necessary to achieve the objectives; and regulation should be technology neutral
Ÿ Describes formal procedures and main principles for applying asymmetric regulation
Ÿ Ex-ante regulation shall only be applied in certain circumstances : i.e. on operators with SMP (art. 8). Ex-ante regulation means that prohibitions for future action are determined for specific operators (i.e. those with SMP) as opposed to ex-post which is retrospective determination if for instance an operator did abuse its dominant position)
Ÿ Transition to competition law : principles from competition law used to define Significant Market Power (SMP) (FD Art. 14)
Ÿ Private regulation: The receiving party must ensure the same level of confidentiality
Ÿ In practical terms: Ex ante regulation will be applied to former monopolists and/or those who control essential facilities (recital 20)
Ÿ Art 14 in the FD defines the methodology for defining SMP and the Guidelines clarify this further
o ”New emerging markets where the market leader de facto is likely to have a substantial market share should not be subject to inappropriate obligations” (FD recital 21)
Ÿ Increased use of soft law – guidelines and recommendations (review once a year)
Ÿ Aim to harmonise the national regulators (NRA) practise to achieve a pan-European common regulatory framework
Ÿ Independent NRAs (Art. 3) The NRA’s tasks are stipulated in (Art. 7 – 12)
Ÿ Objectives and Regulatory Principles (Art. 7)
Ÿ Management of radio frequencies (Art. 8)
Ÿ Numbering, naming and addressing (Art. 9)
Ÿ Rights of Way (Art. 10)
Ÿ Co-location and facility sharing (Art. 11)
Ÿ Accounting separation and financial reports (Art. 12)
Ÿ Right to Appeal (Art. 4)
Ÿ Information (Art. 5)
Ÿ Consultancy and transparency (Art. 6 and 7)
Ÿ General provisions (Art. 13 – 23)
9.1 Access- and Interconnection Directive
Ÿ Regulates the procedures and criteria for interconnection and access to electronic communications networks
Ÿ Defines methodology for NRA when defining access obligations
Ÿ Limitations on the obligations applicable to SMP operators
Ÿ Regulatory intervention shall be ”Specific, appropriate and temporary”
Ÿ More in session 3 and 4
9.2 Authorisation Directive (1)
9.2.1 General authorisation
Ÿ All electronic communications services and networks would be provided under general authorisation.
Ÿ Licences would no longer be required
Ÿ Specific rights of use would be granted, separately from authorisations, for the assignment of radio frequencies and numbers.
Ÿ An undertaking could start to operate a network and provide services upon notification
9.2.2 Provision regarding the granting of rights to use radio frequencies and numbers
Ÿ Rights to use radio frequencies (six weeks to six months for competitive bids)
Ÿ Rights to use numbers (two weeks).
Ÿ SMP and USO obligations
9.2.3 Rights of way and rights of interconnection
Ÿ Issue Document for undertakings authorised to apply for rights of way and/or negotiate interconnection
Ÿ within one week of being requested by the undertaking
Ÿ or where appropriate as an automatic reply to a notification.
9.2.4 Conditions attached to general authorisations cover (i.a.)
Ÿ administrative charges covering costs, proportionate to turnover, published and adjusted yearly if excessive;
Ÿ protection of personal data and privacy;
Ÿ enabling legal interception by competent authorities for data protection purposes;
Ÿ mandatory transmission of services within the public broadcasting remit, in conformity with the proposed Directive on Universal Service;
Ÿ protection of minors in accordance with the Television Without Frontiers Directive
Ÿ usage fees to be non-discriminatory, transparent, objectively justified and proportionate;
Ÿ transfer of rights and conditions to conform with the proposed Framework Directive;
Ÿ (for use of radio frequencies) avoidance of harmful interference;
Ÿ number portability requirements in conformity with the proposed directive on universal service.