Select Committee on European Scrutiny Ninth Report


COM(00) 384

Draft Directive of the European Parliament and of the Council on access to, and interconnection of, electronic communications networks and associated facilities.

Legal base: Article 95 EC; co-decision; qualified majority voting
Department: Trade and Industry
Basis of consideration: SEM and Minister's letter of 19 March 2001
Previous Committee Report: HC 23-xxix (1999-2000), paragraph 13 (15 November 2000)
To be discussed in Council: 4-5 April 2001
Committee's assessment: Politically important
Committee's decision: Cleared


  7.1  This proposal is one of seven that will form the new regulatory framework for electronic communications networks and services. They were anticipated in the Commission Communication on the results of the public consultation on the 1999 Communications Review which we considered on 24 May and 19 July[29] and which was debated in European Standing Committee C on 16 February 2000.[30]

  7.2  This proposal sets out a harmonised regulatory framework for access to, and interconnection of, electronic communications networks in the European Community. The proposal would carry forward the existing obligations on interconnection under the Interconnection Directive 97/33/EC, on access under the Voice Telephony Directive 98/10/EC and on conditional access under the TV Standards Directive 95/47/EC. The intention is to exclude the regulation of broadcast content from the scope of the proposal.

Scrutiny and the timetable

  7.3  We considered the proposal on 15 November 2000 but did not clear it as it was still subject to negotiation. We supported the Government's wish for the proposal to include an explicit requirement for operators with significant market power to offer interconnection. We regarded this as a key point and asked the Minister to bring us up to date before the 22 December Telecoms Council, at which it was expected that a Common Position would be sought. However, it became clear before that date that more work on the proposal was needed. The Swedish Presidency now aims to reach political agreement on the proposal at the 4-5 April Telecoms and Transport Council and a Common Position on it at the 27-28 June Telecoms and Transport Council. The European Parliament had its First Reading on the proposal on 1 March.

  7.4  The Minister has submitted Supplementary Explanatory Memoranda on two other proposals of the seven which are expected to form the new regulatory framework. We report on them elsewhere in this Report.[31]

The Supplementary Explanatory Memorandum (SEM)

  7.5  In her SEM of 19 March, the Minister for Small Business and E-Commerce at the Department of Trade and Industry (Ms Patricia Hewitt) says that the Government is satisfied that the results to date in the Council working group have addressed the main concerns she set out in her Explanatory Memorandum of 10 October 2000. She says:

    "—  Member States are agreed that national regulatory authorities (NRAs) will be able to impose obligations on undertakings with significant market power to interconnect networks or network facilities under Article 12;[32]

    "—  Member States are agreed that all operators of public electronic-communications networks should have the right and, when requested by other undertakings, an obligation to negotiate interconnection with each other for the purpose of providing publicly available electronic-communications services in order to ensure the provision and interoperability of services throughout the Community; and

    "—  Member States are agreed that the obligations set out in Articles 9 to 12[33] should be linked solely to a determination of significant market power in accordance with Article 8[34] (with exceptions only to ensure end-to-end connectivity, accessibility for end-users to digital radio and television services or compliance with international commitments). Only obligations relating to price control and cost accounting under Article 13 would be subject to the additional requirement that a potential lack of effective competition would permit the undertaking concerned to sustain prices at an excessively high level or to apply a price squeeze to the detriment of end-users; the Government believes that this is almost certain to be the case anyway for an undertaking with significant market power. Given the scope for NRAs to choose from the full range of powers available to them to address any specific problem, the Government also welcomes the explicit requirement for obligations to be objective, transparent, proportionate, nondiscriminatory and implemented in accordance with the public-consultation provisions in Article 6 of the proposed Framework Directive.

"The Government is also satisfied that negotiations on the issue of conditional access seem likely to result in Member States being permitted to determine the appropriate level of regulation at a national level. While the existing conditional-access regime would be carried forward in line with the Commission's proposals in Article 10, obligations could be amended or withdrawn where they were no longer necessary to ensure access to must-carry programming or to promote competition. Equally, the extension of the conditional-access rule to electronic programme guides and application program guides would be a matter for NRAs, not the Commission."


  7.6  We thank the Minister for bringing us up to date on this proposal. The majority of concerns it raised have been satisfactorily dealt with and we note her expectation that the negotiations on conditional access will also produce a satisfactory result.

  7.7  We now clear the document.

29  (21189) 8330/00; see HC 23-xix (1999-2000), paragraph 7 (24 May 2000) and HC 23-xxv (1999-2000), paragraph 8 (19 July 2000). Back

30  Official Report, European Standing Committee C, 16 February 2000. Back

31  See paragraphs 5 and 8. Back

32  Article 12 covers Obligations of access to, and use of, specific network facilities. Back

33  Articles 9 to 11 cover obligations of transparency, non-discrimination and accounting separation, respectively. Back

34  Article 8 covers Imposition, amendment or withdrawal of obligationsBack

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