Summary of the EU Framework Directive

 

Background of Directive

In 1999, the European Commission initiated a major review of existing EU telecommunications law that resulted in the adoption in 2002 of a new regulatory framework for electronic communications.   The new regulatory framework has applied since July 2003 (with the exception of data protection which was adopted in July 2002 and has applied from the end of October 2003).[1]

The goals of the new regulatory framework are to encourage competition in electronic communications markets; to improve the functioning of the internal European market; and to protect basic user interests that would not be guaranteed by market forces.[2]  The rules of the new framework are designed to be simple, aimed at deregulation, technology-neutral, and sufficiently flexible to remain relevant in the dynamic markets of the electronic communications sector.[3]

The regulatory framework that existed in the EU prior to the implementation of the 2002 regulatory framework was aimed primarily at managing the transition from monopoly to competition, and was therefore focused on the creation of a competitive market and the rights of new entrants.  Rapidly changing technologies, convergence, and the challenges of the newly liberalised markets have created a need for a single, coherent regulatory framework that covers the whole range of electronic communications. 

 

The new regulatory framework is designed to respond to the dynamic and largely unpredictable communications markets that are characterized by a significant increase in the number of market players.  In light of increasing convergence between services, networks and technologies, the regulatory framework has evolved from a traditional telecommunications-oriented framework to a more flexible framework that regulates all electronic communications infrastructure and associated services in a consistent manner.[4]  Thus, the Directive adopts a notion of electronic communications that is broader than that of telecommunications alone.  In addition to telecommunications networks and services, the Directive applies to, among other things, broadcasting networks. Content services, however, remain outside the scope of the new framework.[5]

 

The main instruments of the new EU regulatory framework for the electronic communications sector include:

 

  1. the Framework Directive, which sets out the main principles, objectives and procedures for an EU regulatory policy regarding the provision of electronic communications services and networks;
  2.  the Access Directive, which stipulates procedures and principles for imposing pro-competitive obligations regarding access to and interconnection of networks on operators with significant market power;
  3.  the Authorization Directive, which introduces a system of general authorisation, instead of individual or class licences, to facilitate entry in the market and reduce administrative burdens on operators;
  4.  the Universal Service Directive, which requires 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;
  5.  the Privacy and Electronic Communications Directive, which sets out rules for the protection of privacy and of personal data processed in relation to communications over public communication networks;
  6. the Radio Spectrum Decision, which establishes principles and procedures for the development and implementation of an internal and external EU radio spectrum policy; and
  7. the Commission Competition Directive, which consolidates the legal measures based on Article 86 of the Treaty that have liberalised the telecommunications sector over the years.

 

Summary of Framework Directive

 

The objective of this Directive is to establish a harmonised framework for the regulation of electronic communications networks and services. It lays the foundation in the form of horizontal provisions serving the other measures: the scope and general principles, basic definitions, general provisions on the national regulatory authorities, the new concept of significant market power, and rules for granting certain indispensable resources such as radio frequencies, numbers or rights of way.

 

In response to the convergence of technologies and the need for horizontal regulation of all infrastructure, the new framework is no longer limited to telecommunications networks and services but covers all electronic communications networks and services. This includes, for example, fixed and mobile telecommunications networks, cable or satellite television networks and electricity networks, where they are used for electronic communications services. On the other hand, the content of services delivered over electronic communications networks, such as broadcasting content or financial services, are excluded, as is telecommunications terminal equipment.

 

The Directive defines a series of terms relating to electronic communications, including:

 

"electronic communications networks" means transmission systems which permit the conveyance of signals by wire, by radio, by optical or by other electromagnetic means, including satellite networks, fixed and mobile terrestrial networks, networks used for radio and television broadcasting and cable television networks;

 

"electronic communications service" means a service, normally provided for remuneration, which consists in the conveyance of signals on electronic communications networks. Services providing, or exercising editorial control over, content transmitted using electronic communications networks and services are excluded;

 

"associated facilities" means the facilities associated with an electronic communications network or service which enable the provision of this service via that network or service. This includes conditional access systems - any technical measure whereby access to a protected radio or television service is made conditional upon subscription or other form of prior authorisation - and electronic programme guides.

 

NATIONAL REGULATORY AUTHORITIES

 

Independence. Member States must guarantee the independence of national regulatory authorities by ensuring that they are legally distinct from and functionally independent of all organisations providing electronic communications networks, equipment or services.

 

Right of appeal. At the national level, effective mechanisms must allow any user or undertaking providing electronic communications networks or services the right of appeal to an independent appeal body in the event of any disputes with a national regulatory authority.

 

Impartiality and transparency. Member States must ensure that national regulatory authorities exercise their powers impartially and transparently. They must also ensure that the national regulatory authorities make arrangements for consultation of the interested parties if they intend to take measures which could have a significant impact on the market.

 

OBLIGATIONS AND TASKS OF NATIONAL REGULATORY AUTHORITIES

 

General tasks

To promote competition in the provision of electronic communications networks and services, the first tasks of the national regulatory authorities are:

 

  • ensuring that users derive maximum benefit in terms of choice, price and quality;
  • encouraging investment in infrastructure and promoting innovation; and
  • encouraging efficient use and management of radio frequencies and numbering resources.

 

The national regulatory authorities must also contribute to development of the internal market by, inter alia:

 

  • encouraging the establishment and development of trans-European networks and the interoperability of pan-European services;
  • ensuring that there is no discrimination in the treatment of undertakings providing electronic communications networks and services; and
  • cooperating with each other and with the European Commission to ensure the development of consistent regulatory practice and consistent application of the new regulatory framework for the telecommunications sector.

 

The final task of the national regulatory authorities is to promote the interests of the citizens of Europe by, inter alia:

 

  • ensuring that all citizens have access to a universal service, as specified in Directive 2002/22/EC ("universal service");
  • ensuring the availability of simple and inexpensive dispute resolution procedures; and
  • contributing to ensuring a high level of protection of personal data and privacy ("Directive on Privacy and Electronic Communications").

 

Management of radio frequencies

The national regulatory authorities manage the radio frequencies for electronic communication services. Such radio frequencies must be allocated and assigned on the basis of objective, transparent, non-discriminatory and proportionate criteria. Beyond that, any undertaking intending to transfer rights to use radio frequencies must notify the national regulatory authority responsible for spectrum assignment. National regulatory authorities must ensure that competition is not distorted as a result of any such transaction.

 

Numbering, naming and addressing

Member States must ensure that national regulatory authorities control the assignment of all national numbering resources and the management of the national numbering plans. Adequate numbers must be provided for all electronic communications services. To this end, the national regulatory authorities must establish objective, transparent and non-discriminatory procedures for assigning national numbering resources.

 

Rights of way

The purpose of granting rights of way is to allow an undertaking to install facilities on, over or under public or private properties. When a competent authority considers an application for the granting of rights of way it must act on the basis of transparent procedures, applied without discrimination and without delay.

 

Co-location and facility sharing

In certain cases where access to facilities is restricted because of the need to protect the environment, public health or public security, Member States may impose the sharing of facilities or property on an undertaking operating an electronic communications network.

 

REGULATORY CONTROLS ON UNDERTAKINGS WITH SIGNIFICANT MARKET POWER

An undertaking is considered to have significant market power if it is in a position to behave independently of competitors, customers and, ultimately, consumers.

 

Market definition procedure

After public consultation and consultation with the national regulatory authorities the European Commission is required to adopt a recommendation on relevant product and service markets in the electronic communications sector. The purpose of this recommendation is to identify markets displaying characteristics which may justify the imposition of the regulatory obligations set out in the specific Directives. At the latest on the date of entry into force of the Directive, the Commission will also publish guidelines for market analysis and the assessment of significant market power in accordance with the principles of competition law.

 

Market analysis procedure

As soon as possible after the adoption of the recommendation the national regulatory authorities must carry out an analysis of the relevant markets, taking the utmost account of the guidelines published by the Commission. Where a national regulatory authority concludes that a market is not effectively competitive, it must identify the undertakings with significant market power and impose appropriate specific regulatory obligations on them.

 

GENERAL PROVISIONS

 

Interoperability of digital television services

In order to promote the free flow of information, media pluralism and cultural diversity, providers of digital interactive television services are encouraged to use an open application program interface (API). Similarly, providers of enhanced digital television equipment are encouraged to comply with an open API in accordance with the minimum requirements of the relevant standards or specifications. “API" means the software interfaces between applications and the resources in the enhanced digital television equipment for digital television and radio services.

 

Dispute resolution

Disputes between undertakings providing electronic communications networks or services in the same Member State are resolved by the national regulatory authority, which is required to issue a binding decision within four months. In the event of a cross-border dispute between parties in different Member States, any party may refer the dispute to the national regulatory authorities concerned, which must coordinate their efforts in order to settle it.

 

Review and transposition

Not later than three years after the date of application, the European Commission will report to the European Parliament and to the Council on the functioning of the Directive. Member States must adopt and publish the laws, regulations and administrative provisions necessary to comply with this Directive not later than 24 July 2003.

 

 



 

[1] European Union Information Society, online:  http://europa.eu.int/information_society/topics/ecomm/all_about/history/text_en.htm.

[2] European Union Information Society, on-line: http://europa.eu.int/information_society/topics/ecomm/all_about/todays_framework/overview/index_en.htm.

[3]European Union Information Society, on-line: http://europa.eu.int/information_society/topics/ecomm/all_about/todays_framework/overview/index_en.htm.

[4]European Union Information Society, on-line:  http://europa.eu.int/information_society/topics/ecomm/all_about/history/text_en.htm.

[5] European Union Information Society, on-line:  http://europa.eu.int/information_society/topics/ecomm/all_about/history/text_en.htm.

 

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