Explanatory Memorandum to COM(2000)392 - Universal service and users' rights relating to electronic communications networks and services - Main contents
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| dossier | COM(2000)392 - Universal service and users' rights relating to electronic communications networks and services. |
|---|---|
| source | COM(2000)392  |
| date | 12-07-2000 |
The proposed Directive brings forward and consolidates existing texts in telecommunications regulation, updating where necessary in response to technological and market developments.
The first chapter sets out the scope and aims of the Directive. The second chapter focuses on traditional universal service obligations, and includes provisions for designation of operators by Member States for the provision of universal service, as well as new provisions on costing and recovery of costs by designated operators. This chapter also proposes a procedure and criteria for future re-examination of the scope of universal service obligations.
The third chapter relates to users and consumers rights but includes an important article on retail price regulation. The chapter addresses consumer contracts, the quality of services, the transparency of information available to the public and guarantees access by all users to emergency services and directory enquiry services. It also confirms the international access code of 00 and deals with completion of calls originating with the new 3883 European regional code. New provisions on interoperability for digital television equipment have been included in this chapter while another new provision ensures proportionate compensation to network operators that bear must carry obligations in relation to public service broadcasting.
The fourth chapter carries forward the existing provisions for the supply of leased line services, but provides for a progressive elimination of these provisions, in cooperation with the Commission, as the market for these services become competitive in each Member State. A provision on other mandatory services is also included.
The fifth chapter, relating to procedures, provides for consultation by national regulatory authorities with user and consumer groups before a national regulatory authority adopts measures.
II. Aims of the proposed Directive:
- to adapt and modernise existing measures on universal service so as to define the scope of this service, the rights of users and the measures for compensating providers of the service without distorting competition;
- to create a process for reviewing the scope of universal service obligations;
- to lay down specific users and consumers rights where necessary;
- to carry forward current measures on and ensure the availability of leased lines in the EU until competition in these services develops;
- to allow NRAs to take measures on behalf of users and consumers;
- to underpin industry's efforts to ensure interoperability of consumer digital television equipment.
Contents
Chapter I, covering Articles 1 and 2, sets out the scope and overall aims of the Directive as well as the definitions of terms used.
Chapter II of the Directive deals with universal service obligations. The current regulatory framework requires national regulatory authorities to place obligations on designated network operators to ensure that a defined minimum set of services of specified quality are available to all, independently of their geographical location, at an affordable price. To ensure the provision of these services to all, in some cases at prices which do not compensate the net costs of the organisation concerned (and which constitute an excessive burden), the proposed Directive will continue to allow compensation mechanisms. New provisions clarify that the scope includes access to data communications such as Internet via the public telephone network from a fixed location, while addressing affordability and the control of expenditure. Measures for disabled users and those with special needs are re-enforced while clarifying that measures can be implemented, including specific tariff schemes, for those on low incomes or with special needs. Monitoring quality of service by designated operators is re-enforced. The framework also includes a specific process for reviewing the scope of universal service obligations with a view to changing or re-defining the scope.
At the same time, the Directive provides for a more efficient means of designating operators with universal service obligations, for calculating any net costs and for any necessary compensation of undertakings. Member States are required to find the most efficient means of guaranteeing universal service obligations, including giving all undertakings an opportunity to fulfil obligations, and using allocation mechanisms for part or all of universal service obligations by tendering or auction methods where appropriate.
With respect to compensation, cost sharing via a fund remains as well as the possibility of recovery from general government budgets, whilst recovery via supplements to interconnection fees is no longer permitted. In order to promote efficiency and reduce market distortions to a minimum, any cost recovery via a fund must be levied as widely as is possible, whilst respecting the principle of proportionality. Due consideration must be given to use VAT mechanisms to generate fund contributions. Transparency measures are also strengthened.
Articles 3 to 8 deal with the guaranteed scope of universal service obligations. Article 3 guarantees the services that comprise the scope of universal service obligations and requires Member States to implement such obligations in line with the public interest whilst minimising departures from normal commercial conditions and avoiding distortions to competition. Article 4 guarantees access to the public telephone network at a fixed location and the use of public telephone services, including use of the public telephone network for accessing fax services and Internet services. Article 5 guarantees provision of public telephone service directories and directory enquiry services. Article 6 guarantees provision of public pay telephones. Article 7 contains specific measures for disabled users and users with special social needs. Article 8 ensures that Member States have powers to designate one or more operators to guarantee part or all of the universal service obligations in all or part of the national territory.
Articles 9 and 10 deal with specific affordability provisions. Article 9 requires Member States to monitor the terms on which the public telephone service is being provided and gives powers to Member States to require that designated operators offer special terms and conditions to assist users on low incomes or with special needs. It also allows Member States to provide entitlements direct to specific consumers. Article 10 provides for certain measures designed to enable consumers to monitor and control their expenditure. Member States are obliged to ensure that designated operators provide a specific level of bill itemisation to consumers (beyond the general provision for itemised bills to be provided to users), provide selective call-barring facilities, pre-payment systems, off-set of connection fees and measures to deal with non-payment of bills. The required provisions are listed in Annex I, which describes in detail the facilities which this may refer to, which may be modified by regulatory procedure.
Article 11 deals with the publication of quality of service information and the setting of performance targets with respect to the universal services provided by designated operators. These requirements are in addition to the powers of national regulatory authorities to collect quality of service information and publish it with respect to all undertakings providing public communications services.
Articles 12, 13 and 14 deal with the implementation of the scope of universal service obligations, including where necessary the assessment of the net costs of obligations and their recovery, in order to avoid distorting competition between undertakings with designated obligations and those without. Article 12 (in conjunction with Articles 3 and 8) sets the framework for national regulatory authorities to assign universal service obligations and where necessary assess the net cost of any burden. The details of obligations on national regulatory authorities with respect to costing are given in Annex IV. This Annex provides basic guidelines for calculating the net cost of universal service obligations for the purpose of establishing any recovery mechanisms. Article 13 sets the framework for national regulatory authorities to compensate the net cost incurred by an undertaking fulfilling its universal service obligations. Compensation is limited to provision from general government budgets or via a sharing mechanism based on a Fund, with a requirement in the latter case to spread contributions as widely and efficiently as possible so as to minimise market distortions. Article 14 requires transparent arrangements and publication of information with respect to costing of universal service obligations and with respect to contributions by undertakings. Article 15 requires the Commission periodically to review the scope of universal service obligations with a view to changing or re-defining it in accordance with the procedure in Article 251 of the Treaty. Annex V gives details on the process for conducting any review.
Chapter III of the Directive relates to users and consumers interests and rights. Due to different levels of competition that have developed in communications services in the EU, market players tend to regard each national territory as a distinct environment in which to develop their business. It is clear nonetheless that competition will continue to develop throughout the EU such that, in future, the situation in the current EU Member States will likely be far more homogenous than is the case at present, but EU enlargement is likely to re-produce a wide range of national differences.
For these reasons, an appropriate balance must be struck between relying as much as possible on market mechanisms and competition to achieve a high level of choice and quality, and ensuring regulatory intervention to uphold a minimum set of users' and consumers' rights throughout the Community.
Article 16 requires national regulatory authorities to provide for retail tariff regulation of any organisation with significant market power to prevent such an organisation from setting its tariffs or terms and conditions in such a way as to disadvantage some or all consumers or to prevent other operators or service providers from effectively competing against it. National regulatory authorities will refrain from such intervention where they are satisfied that there is effective competition.
For consumer protection issues relating to the quality of communications services, the model adopted follows an approach with built-in safeguards, relating to NRA reserve powers, if market players do not use their commercial freedom in an effective way to satisfy users' and consumers' demands. Article 17 of the Directive proposes that the ex ante requirements for conclusion of contracts will relate to the operator, or operators, through which the user has a direct connection to the public telephone network. No ex ante requirements will apply to concluding contracts between other service providers and consumers, but any such contracts must contain equivalent information to that laid down ex ante. Operators must commit to a specified quality of service and users will have recourse to corrective mechanisms, such as complaint procedures, NRA imposed reporting requirements, and other transparency measures.
Article 18 implements the commitment to ensuring a high level of transparency and information in communications services. Without requiring per call tariff information, this Article requires Member States to make sure that all applicable information on standard tariffs, terms and conditions, of all providers of communications service, is available to the public. NRAs will have powers to impose specific measures, including per call tariff information, in accordance with the policy objectives of the overall legislative package, including consumer interests. The facility of advice of duration and charge, which allows a user to be informed about the price of a call immediately afterwards, is a valuable facility for consumers, in particular for mobile networks, but the market is already responding to customer demand in this area, and regulatory intervention is not considered appropriate at this stage. Article 19 proposes that powers be vested in the national regulatory authority to require, where necessary and after wide consultation, publication of comparable, adequate and up-to-date information on quality of services. Where there are complaints or where the national regulatory authority determines that the information publicly available does not meet adequate standards of comparability and timeliness, it may require individual undertakings to remedy the deficiencies.
Article 20 is a consumer protection measure designed to ensure that all equipment sold in the EU for reception of digital television is technically compatible with the relevant European standard. Annex VI addresses the technical characteristics of equipment to which these requirements apply. Article 21 ensures that all users have the right to operator assisted calls and to an entry in directories. In addition, all undertakings assigning telephone numbers are obliged to provide relevant information to a single directory in a fair and non-discriminatory manner. Article 22 maintains the existing requirement of a single European emergency call number ('112') to be available free of charge, adding the provision for caller location information to be made available to emergency authorities for such calls. Article 23 continues the existing requirement of a single international access code ('00') and introduces the obligation on operators to handle calls using the new European regional code of 3883.
Article 24 extends the obligation of providing additional facilities (tone dialling, CLI, and itemised billing) to all public access operators (and not just SMP or designated universal service operators). To minimise regulation, NRAs will have reserve powers not to apply such provisions in cases where it is not deemed necessary. Article 25 extends the obligation of number portability to mobile operators and carries forward existing obligations for carrier selection and pre-selection to be made available to users by SMP operators. The provision of number portability is not mandatory between fixed and mobile operators, but such change can be proposed under a review procedure.
Article 26 addresses the situation where Member States impose certain must-carry obligations on networks established for the distribution of radio or television broadcasts to the public. The Article recognises that Member States should be able to lay down proportionate obligations on undertakings under their jurisdiction, in the interest of legitimate public policy considerations, but requires that such obligations should only be imposed where they necessary to meet clearly defined general interest objectives and should be proportionate, transparent and limited in time.
Chapter IV deals with leased lines and other mandatory services. There is a general consensus on the desirability of retaining the existing rules, in Directive 92/44/EC as amended by Directive 97/51/EEC, on the requirement for leased line services to be available in all Member States, with the possibility for national regulatory authorities to withdraw some or all of these provisions when competition is found to be effective in the national market for these services. Article 27 allows for the continuation of the current provisions on leased lines and includes a sunset clause to remove these provisions once national regulatory authorities have determined that there is effective competition.
Article 28 allows Member States to make compulsory on their territory the provision of certain services outside the scope of universal service obligations as long as no compensation mechanism involving specific undertakings are imposed.
In the proposed Framework Directive, the Commission proposes to create a High-Level Communications Group which would be responsible for, among other things, intensive cooperation with consumer bodies and would examine problems brought to its attention by Member States, NRAs, market players, and users. The High-Level Communications Group (HLCG) would propose solutions where appropriate. The provisions of Chapter V make use of the Framework Directive's procedures for HLCG involvement in cooperation between consumers and NRAs.
Covering Articles 29 through 37, Chapter V contains the procedural provisions relating, among other things, to consultation required between the national regulatory authorities and users, consumers, service providers and network operators on issues concerned with the scope, affordability and quality of services, as well as procedures on dispute resolution. The provisions of the Directive reinforce the current provisions in respect of ease of use and accessibility in a national forum, notably in respect of billing and conditions of service.
Measures for technical adaptation of Annexes are provided in Article 31 while monitoring of the functioning of the Directive and a report to the European Parliament and the Council are foreseen in Article 32. Article 33 provides for the regulatory procedure needed in respect of the provisions of Articles 11, 17 and 19. Articles 34 and 35 relate to transposition and entry into force.