directive by alicejenny


									The new European regulatory framework for
electronic communications and perspectives

              27th january
    Part One:
    existing framework

    • Background to market opening
    • Telecommunications regulation
    • Main provisions of the existing framework

      Background to market opening
    • The European liberalisation process: market opening
      in 15 countries
       – 1987 : telecommunications green paper
       – 1988 : liberalisation of terminal equipment
       – 1990 : liberalisation of most services
       – 1 January 1998: complete liberalisation

    • The act of 26 July 1996, which liberalises
      infrastructures and the public telephone service, lays
      down three principles:
       – Anyone is free to engage in telecommunications activities
       – A public telecommunications service must be provided
       – The regulation function is independent of the operation

     Telecommunications regulation

    • Set up on 5 January 1997, ART is a collegial
                                               institution (5
      members who may neither be dismissed nor re-

    • ART is an independent administrative authority and a
      state institution

    • In association with the minister in charge of
      telecommunications, ART is responsible for regulating the
      sector. To this end, it must foster:
       – Fair competition for the benefit of consumers
       – Provision and financing of all elements of public service
       – Employment, competitiveness and innovation
       – Recognition of the interests of the French regions

    Main provisions of the existing
    framework (1)
    • Certain activities require individual authorisation
        –   Creation and operation of a public network
        –   Provision of a public telephone service
        –   Provision of services using radio frequencies
        –   Creation of an independent network

    • ART allocates numbering and frequency resources and manages
       the national numbering plan

    • Interconnection and network access constitute the core of the
       regulatory system
        –   Operators conclude interconnection agreements with each other
        –   ART designates the SMP operators (more than 25% market share) on four markets defined
            by law
        –   SMP operators are subject to stricter access and interconnection obligations:
              •   As an SMP operator on the retail fixed telephony and leased line markets, France Telecom must publish
                  an interconnection catalogue approved by ART
              •   As SMP operators on the national interconnection market, Orange and SFR must apply cost-based
                  pricing for their interconnection tariffs.
        –   Specific provisions for access to the local loop

    Main provisions of the existing
    framework (2)

    • The law provides for the provision of a public service whose
       main component is the universal telecommunications service
            • Universal service includes the provision of a quality telephone service to everyone
              at an affordable price, a universal directory, public payphones, technical provisions
              for the disabled and social tariffs
            • France Télécom is the operator responsible for providing the universal service
            • The cost of the universal service is estimated by ART and its financing is shared
              between the operators

    • Certain retail tariffs are subject to approval by the minister of
       telecommunications, further to a public opinion issued by ART
            • Universal service tariffs
            • Tariffs of services for which there are no competitors on the market

    • ART has powers of ex-post regulation
            • Settlement of disputes
            • Penalties

    Part two:
    the new framework

    • Presentation of the directives
    • "Framework" directive
    • "Authorisation" directive
    • "Access" directive
    • "Universal Service" directive
    • "Personal data" directive
    • "Competition" directive
    • "Radio Spectrum" decision

    Presentation of the directives (1)
    • Background
         • 10 November 1999: publication of the European Commission communication
           entitled "Towards a new framework for electronic communications infrastructure
           and associated services - The 1999 Communications Review" and organisation of a
           public consultation on this document.
         • 12 July 2000: publication of five proposed directives of the European Commission
           ("Framework" "Authorisation", "Access", "Universal Service" "Personal Data"

    • Adopted texts

         • Four directives adopted on 7 March 2002 ("Framework" Directive, "Authorisation"
           Directive, "Access and Interconnection" directive, "Universal Service" directive) to
           be transposed by 24 July 2003
         • A decision concerning frequencies adopted on 7 March 2002 ("Radio Spectrum"
         •    The "Personal Data" directive of 12 July 2002 to be transposed by 31 October
         • The "Competition" directive of 16 September 2002 to be transposed by 24 July
         • The European regulation of 18 December 2000 relative to unbundling of access to
           the local loop, originally included in the review. It was adopted more quickly than
           the other texts.

    Presentation of the directives (2)

    • Adopted texts (cont'd)
          • Commission Guidelines of 11 July 2002 on market analysis and the assessment of
            significant market power, under the Community regulatory framework for
            electronic communication networks and services
          • Recommendation of 11 February 2003 relative to relevant product and service
            markets within the electronic communications sector liable to ex ante regulation
            under the "Framework' directive

    • Objectives of the new framework
          • Take account of growing competition
          • Take account of technological convergence

    • Important consequences for regulation
          • Confirmation of the principle of sectoral regulation
          • Creation of a harmonised framework for networks, independent of content carried
          • Transition to a regime of general authorisations
          • Consideration of the wide range of competitive situations on the different markets
            (definition of relevant markets and operators "with significant market power")
          • Reinforcement of the Commission's harmonising role

     "Framework" directive
     • General provisions
            •   Introduction of the notion of "electronic communications" (art 2)
            •   Definition of the general objectives of regulation (art 8)

     • Reinforcement of cooperation between NRAs and the
            •   Framework for information exchange (art 5)
            •   Creation of the European Regulators' Group (decision of 29 July 2002)
            •   Creation of the Communications Committee (COCOM)

     • Market analysis procedures
            •   Market power is redefined (art 14)
            •   The NRAs define the relevant markets, analyse them and impose necessary obligations upon SMP
                operators, in collaboration with the competition authorities (art 15 and 16)
            •   Operators are required to communicate all necessary information to the NRAs (art 5)
            •   Procedure for making draft measures accessible to the Commission and to NRAs in other Member
                States (art 7.3)
            •   Commission's right of veto over certain measures (art 7.4)

     • Consultation mechanism (art 6)
            •   When an NRA intends to take measures having a significant impact on the relevant market, it must
                consult the interested parties

     • Power of NRAs to settle disputes (art 20 and 21)
     • Miscellaneous provisions
            •   Obligations of separate accounts and structural separation for certain undertakings
            •   Rights of way and encouragement of facility sharing
            •   Harmonisation measures for managmenent of scarce resources
10          •   Harmonisation measures relating to standardisation
     "Authorisation" directive

     • Establishment of a general authorisation regime for electronic
       communication activities (art 3)

     • Regime of rights of use for radio frequencies and numbers (art 5)
     • Member States may introduce secondary trading in frequencies
       (art 5)

     • Rights of inspection and powers of sanction of the NRAs (art 10)
     • Charges and fees (art 12 and 13)
     • Transitional provisions for existing authorisations (art 17)

     "Access" directive
     • Definitions of access and interconnection (art 2)
            •   Access means the making available of facilities and/or services to another undertaking for the purpose
                of providing electronic communications services
            •   Interconnection is a specific type of access implemented between public network operators

     • General rights and obligations (art 4)
            •   Right to negotiate access and interconnection
            •   Obligation for network operators to negotiate interconnection

     • With regard to access and interconnection, NRAs are empowered
       to intervene at their own initiative or at the request of the
       parties involved
     • In the light of the market analyses performed, NRAs are
       empowered to impose, amend or withdraw obligations on SMP
       operators (art 8)
     • List of obligations that NRAs are empowered to impose on SMP
       operators (art 9 to 13)
     • Existing obligations are maintained (art 7)
     • Provisions specific to local loop unbundling (art 12)
     • Provisions relating to conditional access systems (art 6)
     "Universal Service" directive
     • Universal service
              •   Definition of universal service (art 3 to 10)
              •   Procedures for the provision of universal service (art 8)
              •   Financing of universal service (art 12 and 13)
              •   Monitoring of universal service retail tariffs (art 9)

     • Obligations specific to certain SMP operators
              •   Monitoring of retail services, tariffs in particular, when there is no effective competition on the
                  market and when access and interconnection obligations are not sufficient (art 17)
              •   For SMP operators on the retail leased-line market, obligation to provide a minimum set of leased
                  lines and obligations relating to conditions of provision (transparency, non-discrimination, cost
                  orientation) (art 18)
              •   SMP operators on the market for connection to the fixed telephone service are required to propose
                  a carrier selection and preselection offer (art 19)

     • Provisions relating to end-user interests and rights (art 20 to
              •   Contracts, price transparency, service quality, interoperability, operator assistance and directory
                  enquiry services, numbering

     • Number portability (art 30)
              •   Portability of geographical and non-geographical fixed numbers
              •   Mobile number portability

     • Procedures for settling disputes between operators and

     • "Must carry" obligations
      Part three :
      Access and interconnection in the
      new framework
     • To define obligations to operators concerning
       wholesale markets and retail markets, the NRA
       must conduct an analysys:

        – To identify the relevant market;
        – To determine which operators are SMP;
        – To determine the remedies to be applied in order to adress
          the competition issues. The remedies must be justified,
          proportionate and respect the general objectives that the
          Commission has defined in the framework directive:
           • Ensure an effective competition;
           • Ensure that the competition is not hindered or altered;
           • Encourage efficient investments.

     Part three :
     Access and interconnection in the
     new framework

     • The Commission has pre-identified the 18 markets that
       NRA has to include in its analysys. The NRA can identify
       other markets.

     • The 18 markets include the following wholesale

        – Interconnection:
            • Departure, transit and termination services on public fixed networks;
            • Departure and termination on mobile networks;
            • Interconnection of leased lines
        – Access
            • Access to public fixed network (unbundling of the local loop)
            • Access to mobile networks
        – Trunk leased lines

     Part three :
     Access and interconnection in the
     new framework

     • The NRA must determine operators which can
       have dominance in the market. It can be single or
       collective dominance.

     • This must be established with an approach
       coherent with the general competition law (more
       complex than the 25% law).

     • A « dominant » player can act regardless of
       competitors and consumers, that means has a
       position of increasing its profit if not regulated.

     Part three :
     Access and interconnection in the
     new framework

     • Remedies are identified following the analysys of a
       wholesale or a retail markets.

     • Intervention on wholesale markets must be preferred
       to those on retail markets.

     • List of remedies:
        – Transparency (RIO, transmission of contracts to the regulator);
        – Non discrimination;
        – Accounting separation;
        – Access obligation;
        – Price control and cost orientation.


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