Select Committee on European Scrutiny Twenty-Third Report


COM(02) 78

Commission Opinion pursuant to Article 251(2), third subparagraph, point (c), of the EC Treaty, on the European Parliament's amendments to the Council's common position regarding the Draft Directive on a common regulatory framework for electronic communications networks and services.

Legal base:Article 95 EC; co-decision; qualified majority voting
Department:Trade and Industry
Basis of consideration: EM of 19 March 2002
Previous Committee Report: None; but see (21562) 10962/00): HC 28-x (2000-01), paragraph 10 (28 March 2001)
Discussed in Council: 6-7 December 2001 Transport and Telecommunications Council
Committee's assessment:Politically important
Committee's decision:Cleared, but further information requested

  15.1  This Directive, known as "the Framework Directive", is one of seven legislative proposals that arose from the European Commission's 1999 review of the regulatory framework for telecommunications. It sets out the 'horizontal' provisions[28] for the new regulatory framework, including the roles of National Regulatory Authorities (NRAs) and the procedures to be followed to ensure the consistent application of the new framework throughout the Community. We cleared the draft on 28 March 2001 before the Council reached a Common Position on it[29].

  15.2  The Minister for E-Commerce and Competitiveness (Mr Douglas Alexander) says that the Council and European Parliament started negotiations on the key elements in the package in the autumn of 2000. These culminated in a Second Reading agreement that was reached shortly before Christmas 2001. On 7 February, the Minister informed us of the outcome of the negotiations. No texts were available at that time but the Minister said that when they had been finalised, Explanatory Memoranda would be submitted on them "as normal". We considered this letter on 13 February[30]. He now tells us that the Directive was adopted on 14 February 2002.

The Commission document

  15.3  The Commission's Opinion lists the amendments to the Common Position that were agreed as part of the final deal, and confirms that the Commission finds all of these acceptable in full. The Minister summarises the main changes agreed to the Common Position version of the Framework Directive as:

  • the introduction of a new Commission power to require NRAs to withdraw draft decisions on defining relevant markets and the designation of operators with significant market power where these would affect trade between Member States and adversely affect the Single Market or be incompatible with Community law; also other amendments designed to reinforce the consistent implementation of the new framework across the Community;

  • a requirement on Member States to encourage the use of inter-operable standards by digital television platform operators, with a review by the Commission in 2004 to assess the need for mandatory standards;

  • the extension of the right of appeal against NRA decisions to appeals on the merits of the case; and

  • addition of the national market for international mobile phone roaming in the list of markets which the Commission must include in its first Recommendation on Relevant Markets, thereby ensuring that NRAs monitor this area for any distortion of competition.

The Government's view

  15.4  The Minister says that the Government fully supported the agreement reached on the Directive in December, and believes that the final version of the package represents a very good outcome for the UK:

    "The amendments agreed on the Commission's powers to intervene in some NRA decisions, one of the key issues in negotiations, establish a sensible balance between MEPs' concerns about the danger of inconsistent regulatory action and Member States' fears that a general Commission right of veto would undermine NRAs' ability to take quick and decisive action where necessary. The new text ensures that the Commission can intervene in the areas where a consistent approach by regulators is going to be most important, without giving the Commission the blanket oversight powers originally sought by the Parliament. Similarly, on digital TV interoperability, the second key issue in negotiations, the final wording promotes a voluntary, industry-led approach in the first instance while avoiding the immediate introduction of a single mandatory common standard which would have imposed high costs on the UK industry and disrupted uptake of digital TV.

    "The extension of appeal rights to include matters of fact as well as procedure was not a major concession for the UK, where existing appeal procedures in the telecoms sector come close in practice to allowing full appeal on the merits, and the new wording has been generally welcomed by UK operators. Finally, putting an explicit requirement on NRAs to investigate international roaming markets for competitive distortion recognises public concerns about mobile roaming charges; this is the kind of market intended for monitoring under the new regulatory structure and the amendment will ensure that the situation will be explored sooner rather than later".


  15.5  We cleared the draft of this Directive before the Council agreed a Common Position on it in March 2001. In December, a Second Reading agreement was reached between the Council and the European Parliament. The Minister wrote on 7 February to inform us of developments on this and other proposals in the new telecoms regulatory package. No texts were available at that time but the Minister said that, when they had been finalised, Explanatory Memoranda would be submitted on them "as normal". In fact, the revised text was adopted a week later (on 14 February) and we have only now received a detailed description of the revisions.

  15.6  The Minister sets out the changes from the earlier text clearly in his Explanatory Memorandum and says that the Government fully supported the deal. He also says that his Department, the Department for Culture, Media and Sport, Oftel and the Radiocommunications Agency liaised closely with industry and consumer representatives throughout the Communications Review and the course of the negotiations. We have no particular problem with the revised text but we regard this as an example of a failure of effective scrutiny after a Common Position has been agreed. Given the extent to which the Common Position text had been revised, it is clear to us that we should have received an Explanatory Memorandum, if necessary on an unofficial text of the Presidency proposal, before this was finalised and adopted.

  15.7  Other measures which, according to the Minister, formed part of the same Second Reading agreement, are also included in this Report. They are the proposed Access, Authorisation and Universal Service Directives.[31] The comments we make here apply equally to those Directives.

  15.8  In the Report on the scrutiny system in the Commons which we plan to publish in the context of our inquiry into Democracy and Accountability in the EU and the Role of National Parliaments, we will examine scrutiny problems relating to the co-decision process following the adoption by the Council of a Common Position.

  15.9  However, in this case there should have been no reason for doubt, as the Commission's amended texts, following the European Parliament's Second Reading, have always been subject to scrutiny and a scrutiny reserve should have been placed on them. The fact that there was a Second Reading Agreement on the texts in no way removes that obligation and the Minister appears to have recognised this when he undertook, in his letter of 7 February 2002, to submit Explanatory Memoranda on the new texts when they had been finalised.

  15.10  We therefore now ask the Minister to appear before us to explain the circumstances in which these important proposals were adopted without further parliamentary scrutiny after substantial changes had been made to the texts which we scrutinised earlier.

  15.11  We clear the document, since it has already been adopted.

28   i.e. extending to the new regulatory framework as a whole. Back

29  (21562 )10962/01; see HC 28-x (2000-01), paragraph 10 (28 March 2001). Back

30  (23027) 14838/01; see HC 152-xix (2001-02), paragraph 8 (13 February 2002). Back

31  The amendments to the Radio Spectrum Decision were minor and we do not report on that proposal, which we clear in paragraph 22 below. Back

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