Select Committee on European Scrutiny Thirty-Eighth Report





Draft Commission Directive on competition in the markets for electronic communications services.

Legal base:

Article 86 EC



Trade and Industry

Basis of consideration:

Minister's letter of 27 August 2002

Previous Committee Report:

HC 23-xxix (1999-2000), paragraph 21 (15 November 2000)

To be discussed in Council:

Not applicable

Committee's assessment:

Politically important

Committee's decision:





    1. This Commission Directive was one of seven proposals for legislation which form the new regulatory framework for electronic communications networks and services that will come into force 25 July 2003.[40] The other six directives, which have already been adopted, are:

    • Directive on a common regulatory framework for electronic communications networks and services;

    • Directive on the authorisation of electronic communications networks and services;

    • Directive on access to, and interconnection of, electronic communications networks and associated facilities;

    • Directive on universal service and users' rights relating to electronic communications networks and services;

    • Directive on the processing of personal data and the protection of privacy in the electronic communications sector; and

    • Council Decision on a regulatory framework for radio spectrum policy in the European Community.

    1. The Competition Directive consolidates all the specifically competition-oriented provisions of the existing regime. It prevents Member States from re-introducing any special or exclusive rights to provide electronic communications networks or services. For example, it prevents special rights being granted to privatised ex-State monopolies like British Telecom or France Telecom in respect of their commercial activities. The Directive also prevents governments from placing restrictions on the number of operators in the market except where resources (e.g. radio spectrum) may be limited or where there are practical considerations (e.g. planning restrictions on infrastructure provision).
    2. The provisions of the Competition Directive are all contained within the various directives which make up the rest of the package. However, the Commission preferred to consolidate them in a single instrument, possibly with a view to helping with enforcement.
    3. Although the original text of the Commission Directive was published in Autumn 2000, progress was delayed until the other six pieces of draft legislation had been formally adopted. When the previous Committee considered the draft Directive, it decided to leave the document uncleared, pending further information. The Commission produced an amended text of the draft Directive on May 2002.
    4. The Government's view

    5. The Minister for E-Commerce and Competitiveness, Department of Trade and Industry (Mr Stephen Timms) tells us that the Government strongly supports the aims of the Directive and believes that when implemented alongside the other measures of the telecoms package it will lead to a fully liberalised single market in communications networks and services. The Minister also says:
    6. "The UK argued in its initial comments in favour of redrafting and simplification of the Directive, replacing the separate provisions on, for example, rights of use for radio frequencies and rights of way with a single, technology neutral, provision barring the granting of special and exclusive rights for the provision of electronic communications networks or services. We proposed that if the more detailed provisions were retained, their wording should be carefully aligned to that of the other communications review measures in order to avoid inconsistency.

      "The current draft issued by the Commission in May takes account of some but not all of the points we raised. Separate detailed provisions on numbering, rights of way, the independence of national regulatory authorities and accounting separation have been dropped, but the Commission has retained separate articles on radio frequencies, directory services, vertically integrated public undertakings, satellite organisations and cable TV networks. They argue that this is justified because of the effects of an Article 86 Directive, on associated states, as there can be no derogations from competition law rules.

      "The UK responded to the consultation on this second draft by repeating its wishes for consistency of wording with the other communications review measures. This is however only a matter of drafting detail and not a matter of substance."


    7. As a measure that consolidates and simplifies EU legislation in a technically difficult area, the Directive is to be welcomed.
    8. As a Commission Directive, the measure is adopted without going before the Council. The Directive was finally adopted on 16 September following consultations by the Commission.
    9. We are content to clear the document.


40  The Local Loop Unbundling (LLU) Regulation is already in force. Back

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Prepared 11 November 2002