EU Law on Competition for Electronic Communication Networks and Services
Communications is one of the most regulated areas by any government. Taking this fact into consideration and knowing this could hinder the expansion of e-commerce among the Member States, the European Union (“EU”) implemented Commission Directive 2002/77/EC on September 16, 2002 (“E-communication Directive”). The E-communication Directive promotes for the liberalization of communication sectors within the Member States and purports to achieve open electronic communication networks and services, with no restrictions, in the EU. This article summarizes the most relevant issues of this EU Directive and provides some short history on its implementation obstables.
Under the E-communication Directive, “Electronic communications and “Electronic communication networks’ include all networks and services which convey signals by wire, radio, fiber networks, optical, and any other electromagnetic means. These definitions include the broadcasting of radio and television programs like cable television and satellite networks. Thus, Internet services, including Internet radio are covered by this Directive.
Countries cannot Establish Differential Treatment
Under the E-communication Directive, Member States are prohibited from granting or maintaining exclusive or special rights for the provision of electronic communication networks or publicly available ‘electronic communication services’ (those available to the public in general). Indeed, the regulations order Member States to take appropriate measures to ensure free competition of e-communication networks and services. Member States were to comply with this precept before July 24, 2003. In other words, the EU currently enjoys no discriminatory rules on electronic communication networks and services. An Internet company in France may offer its services in Germany or any other EU Member state without discriminatory treatment.
The E-communication Directive, however, left Member States the option of providing differential treatment in certain cases and through a ‘reasoned opinion’ according to Article 3(1) of Directive 2002/20/EC. Yet, companies offering electronic communication networks or services and experiencing differential treatment in any EU country must have the opportunity to challenge this before an independent body or before a court of law or tribunal. Some countries like Greece, Sweden and Liechtenstein used this ‘reasoned opinion’ letter to justify their failure domestically implement this directive.
Use of Frequencies
The E-communication Directive prohibits Members States from granting exclusive or special rights for the use of radio frequencies for the provisions of electronic communication services. Likewise, Member States must assign radio frequencies for electronic communication services based on objective, transparent, non-discriminatory and proportionate criteria only. This would be very relevant for Internet public radio in the EU states.
Domestic Directory Services
Member State had to abolish domestic directory services on their territories. This includes published directories and directory enquiry services. This is a measure tending to provide equal access to all EU companies offering e-communication networks or services throughout Europe.
Satellite Services
Member States were required to abolish any regulatory prohibition or restriction on the offer of space segment capacity to any satellite earth station network operator. The E-communication Directive orders Member States to abolish any incompatibility between this requirement and any requirement imposed upon a Member State by any international satellite organization to which that country may be signatory.
Voice Telephony Services
According to this E-communication Directive, the term ‘publicly available telephone services’ is synonymous with the term ‘public voice telephony services’ referred to in Article 1 of Directive 1999/64/EC. Directive 1999/64/EC requires Member States to ensure that no telecommunication organization operates its cable TV network using the same name of a legal entity that also offers public telecommunications network when that organization is controlled by the state or receives benefits or special rights from the state, dominates the common market of public telecommunications or public voice telephony services, or operates a cable TV network with special rights in any specific geographic area.
The EU law on liberalization of electronic communication networks and services was not timely adopted by the Member States. Some countries experienced difficulties in bringing domestic communication laws up to the EU standard set by this liberalization rule. For instance, Liechtenstein and Greece failed to implement this directive on time. For this reason, the EFTA Surveillance Authority filed a declaratory judgment action against Liechtenstein before EFTA Court in 2006. Liechtenstein failed to promptly implement domestic legislation adopting Commission Directive 2002/77/EC and other related provisions and issued a ‘reasoned opinion’ stating the motives for this failure. Yet, the EFTA court declared that Liechtenstein filed to implement this community directive and ordered this country to bear the litigation costs.
Similarly, the Commission issued a memo to the government of Greece requesting prompt implementation of the E-communications Directive on October 2006. Greece had compromised to comply with this update on February 2006 but it failed to do so despite a ruling from the European Court of Justice. Similarly Sweden was requested to end broadcasting services monopoly on March 2005. The European Commission requested Sweden to promptly implement Directive 2002/77/EC and particularly abolish the state-owned company Teracom AB.
Reviewing the EU countries’ history regarding implementation of Directive 2002/77/EC helps e-communication network and service providers to recognize those countries that somehow may be more reluctant open markets for communication networks and services.