Liberalization and Market Regulation in the EU
Andrejs Dombrovskis
Deputy Director
Electronic Communications and Post Department
Workshop on EU telecommunications regulation
Belgrade, 12 – 13 JUNE 2012
topics of the presentation
∆ EU Regulatory Framework
∆ 1998 ONP framework
∆ 2002 NRF framework
∆ 2009 NNRF framework
∆ Role of the European Commission and of the BEREC in market
regulation
∆ Transposition into national legislation
∆ Implementation of national legislation by the NRA
∆ Recent developments in markets and experience in Latvia as
a country that started the implementation later
DEVELOPMENT OF THE COMPETITIVE FRAMEWORK
ONP
UMBRELLA
AGREEMENT
NRFW
2010
2005
2004
SPRK
2001 2003
1994
State owned monopoly
LV
Liberalization ……..
Exclusive rights of
Lattelecom
Break-up
of AT&T
Optim.
?
ONP
BEREC
1984
GREEN BOOK
LIBERALIZAT.
1987
NRFW …..
GREEN BOOK
CONVERGEN.
1997
1998
Step-by-step liberalization
2002
EU
2006
Full liberalization ……………
2009
DEVELOPMENT OF REGULATION UNTILL 1998
Regulatory package of 1998 – culmination of 10 year liberalization programme in Europe
Liberalization of telecommunications was implemented step-by-step !!!
1987 – Green Paper on development of the common market for telecommunications
services and equipment [COM(87) 290 final]
Gradually from exclusivity freed-up were:
1988 – telecommunication terminals
1990 – telecommunication services, except voice telephony (not networks!)
1993 – data trasmission services
1994 – sattellite services and terminals
1995 – cable TV networks
1997 – Green Paper on the convergence of the telecommunications, media and
IT sectors and the implications for regulation [COM(97) 623 final]
1997 – Telecommunication Agreement of World Trade Organization (WTO)
under General Agreement on Trade of Services (GATS)
1998 – full telecommunication market liberalization in „old” EU Member States
OPEN NETWORK PROVISION REGIME
ONP REGULATORY FRAMEWORK
EMPHASIS ON REGULATION OF INTERCONNECTIONS, ACCESS, LEASED
LINES AND UNIVERSAL TELECOMMUNICATIONS SERVICE
Individual licensing & general authorisations regimes
To promote competition it was envisaged:
- to implement carrier selection, carrier pre-selection
- to implement number portability
- to implement comprehensive directory services
- supervision of QoS, tariffs and costs of voice telephony services
- SMP (Significant Market Power) analysis in 4 – fixeed and mobile voice telephony,
interconnection and leased lines service markets
Creation of ONP Committee at EC for co-ordinated implementation of regulation
Requirement to establish independent regulatory authority (NRA)
Regulatory requirements presscribed in ~ 30 directives, recomendations and decisions
In 1987 created unformal community of NRAs – Independent Regulatory Group (IRG)
Also in 1987 market player’s lobby group ECTA was formed (ETNO created in 1992)
SUMMARY: IMPLEMENTATION OF TELECOMMUNICATIONS REGULATORY
REGIMES IN LATVIA
01.05. 2004.
30.11. 2001.
ONP
01.07.2001
SPRK
OPEN NETWORK
PROVISION (ONP)
REGIME
1998
LV
NRFW
2003. gads
NEW REGULATORY
FRAMEWORK (NRFW)
2002
OPTIMIZED
REGULATORY
FRAMEWORK
2009
EU
2011
29
2002 REGULATORY FRAMEWORK
(Streamlined regulation, easier market entry)
EMPHASIS ON MARKET ANALYSIS IN 18 (7) SERVICE MARKETS – assymetric regulation
•Extended regulation scope (broadcasting, CaTV and Internet), concept of electronic
communications networks and electronic communications services
•Simplified market entry (individual licences replaced by general authorisations)
•Applying the principle of technological neutrality
•Simplified processes for granting usage rights for scarce resources
•Concept of secondary trading of radio frequencies
•Ensuring more transparency in NRA work
•Ensure that national legal systems allow for appeals on decisions of NRAs
•Applying competition law in definition and analysis of service markets and applying ex-ante
regulation to dominant market players
•Providing for strong and independent NRAs
•Simplification of whole regulatory package (5 basic Directives)
•To achieve greater harmonisation of regulation Communication Committee (COCOM) Radio
Spectrum Committee (RSCOM), Radio Spectrum Policy Group (RSPG) and European
Regulators Group (ERG) were created
“FULL” SET OF 2002 REGULATORY PACKAGE
DIRECTIVES
• Framework Directive (2002/21/EC), establishing also COCOM
• Access Directive (2002/19/EC)
• Authorisation Directive (2002/20/EC)
• Universal Service Directive (2002/22/EC)
• Privacy Directive (2002/58/EC)
• Competition Directive (2002/77/EC)
REGULATIONS, DECISIONS, RECOMENDATIONS AND GUIDELINES
• Regulation No 2887/2000/EC on unbundled access to the local loop
• Radio Spectrum Decision (676/2002/EC), establishing also RSCOM
• Decision (2002/622/EC) establishing Radio Spectrum Policy Group RSPG
• Decision (2002/627/EC) establishing European Regulators Group ERG
• Recommendation (2003/311/EC) on relavent product and service markets
• Giudelines (2002/C165/03) on market analysis and assessment of SMP
Uncanged previous regulatory documents (Terminal Directive, GSM Directive, etc.)
PROGRESS OF EC PROPOSALS FOR CHANGES IN
REGULATORY FRAMEWORK OF 2002
EC proposals for changing of regulatory framework on 29
June 2006 submitted for public consultation untill
27 October 2006
EC summarised proposals published on 13 November
2007 (included proposal of creation of ECMA - European
Electronic Communications Market Authority)
Agreed proposals approved by European Parliament on
25 November 2009
CHANGES OF 2002 FRAMEWORK IN 2009
Authorization Directive
2002/20/EC
Framework
Directive
2002/21/EC
Access Directive
2002/19/EC
US Directive
2002/22/EC
Privacy Directive
2002/58/EC
Competition Directive
2002/77/EC
Directive 2009/136/EC
amends Directives
2002/22/EC, 2002/58/EC
and Regulation 2006/2004
on co-operation of
consumer protection
bodies
Directive 2009/140/EC
amends Directives
2002/19/EC, 2002/20/EC
and 2002/21/EC
Regulation 1211/2009
sets BEREC
AMENDMENTS WERE REQUIRED TO BE IMPLEMENTED
BY 25 MAY 2011
PROPOSALS OF 2009 FOR REVIEW OF REGULATION
• Number portability in one working day
• Maximal term for customer contracts – 24 months (preferably 12)
• Detailed information in contracts (QoS, compensation for un-qualitative
services, advertising rules, etc.)
• Respect to customer privacy when using Internet
• Network neutrality conditions by informing customers about traffic
management if applied
• Obligation to inform customers on security breaches or attempts to do it
• Access to 112 services and caller location, information on other
emergency numbers
• Functional separation as possible explicit remedy or by operator’s
initiative
• Requirement for more independency of NRA
• Involvement of BEREC to facilitate regulatory consistency
• Indirect “veto” of the EC on decisions on remedies of NRA
OTHER EU REGULATIONS DURING 2007-2011
Rec-n on markets
Rec-n on market analysis
procedures
Ieteikums par tirgiem
Roaming Regulation
Rec-n on interconnection
tariffs
Recomendation on NGA
New version in 2007
2008
2007,
2009
2009
2010
CHANGING REGULATORY FRAMEWORKS
OPEN NETWORK
PROVISION (ONP)
REGIME
Institutions:
ONP COMMITTEE
LICENSING
COMMITTEE, NRAs, IRG
1998
NEW REGULATORY
FRAMEWORK
(NRFW)
Institutions:
COCOM
NRAs, IRG, ERG, RSC,
RSPG
2002
REVISED
REGULATORY
FRAMEWORK
Institutions:
COCOM
NRAs, IRG, BEREC,
RSC, RSPG
2009
Time
BEREC: Body of
Communications
European
Regulators
for
Electronic
Results that matter, on topics that matter
In the medium term BEREC’s main focus will continue to be its contribution to the
realisation of the internal market. It will do so in particular by:
a. Adopting common regulatory approaches and best practices in areas where
differences impede the internal market, and monitoring conformity with those
approaches thereafter.
b. Issuing robust and respected opinions on Article 7 cases.
c. Advising the EU institutions, upon request and on its own initiative, on draft
legislation and regulation.
IRG/BEREC EXSPERT WORKING GROUPS 2012
Framework Implementation (3 projects)
Convergence and Economic Analysis (5 projects)
International Roaming (2 projects)
Next Generation Networks (3 projects)
Net neutrality (3 projects)
End –User (2 projects)
BEREC-RSPG Cooperation (1 project)
Remedies (3 projects)
Benchmarking (3 projects)
Termination Rates (1 project)
Regulatory Accounting (2 projects)
ECPD ACTIONS FOR PROVISION OF REGULATION
SPRK
01.07.2001.
TPD
TTC
17.09.2001.
TQCC
ECPD FUNCTIONS:
authorization, interconnections, resourses, market analysis,
obligations, tariffs, costs, universal service, QoS, complaints,
technical regulation, etc.
ECPD
Liberalization
2001
Telcos Law of
1993
2002
2003
2004
November 2001
Law On
Telecommunications
ONP
2005
2006
May 2004
Electronic
Communications
Law (ECL)
2009 2011
FW
Review
June 2011 ECL
amended
NRFW and optimised RFW
ESSENTIAL BENCHMARKS OF LATVIAN ELCOS SECTOR:
ONP Regime Implemented ?
NFW Transposed ?
ECL: bylaws drafted
NP introduced
ECL accepted by CoM
1st RIOs approved
SP - 2008
Start Liberalization
Telcos Law
Nov 2001
ECL am.
2006 MA
ECL accepted by Parliament
Apr 2004
1st SMP desig.
June 2005
Nov 2002
Jan 2003
Jul 2003
PUC created in July 2001
May 2004
Dec 2004
Dec 2005
CABINET REGULATIONS ACCORDING TO PUC,
ELCOS AND NETWORK SECURITY LAWS
On regulated public
services
National Numbering
Plan
On supporting numbering
DB by SSC ElComs
On annual fee for
numbering use
On supporting caller
location
National Radio Frequency
Plan
On frequency bands with
limited use
On radio frequency
assignment use permits
On internal procedures for
data protection
On data to be provided to
national CERT institution
CABINET REGULATIONS ACCORDING TO
ELECTRONIC COMMUNICATIONS LAW II
On holder of country top
level domain .lv and ENUM
On telecommunications
terminal equipment
On use of Amateur Radio
Equipment
On use of special radio
facilities
On use of equipment for
lawful interception
On procedures for
requesting the data to be
retained
SPRK REGULATIONS ACCORDING TO
ELECTRONIC COMMUNICATIONS LAW I
On registration &
list of services
On requirements of
GA
On information
provided for SPRK
On violation of
requirements of GA
On numbering
usage rights
On frequency
usage rights
On number
portability
On carrier selection
and CPS
On descriptions of
public services
On access to
facilities
On access to
unbundled loops
On minimal set of
leased lines
SPRK REGULATIONS ACCORDING TO
ELECTRONIC COMMUNICATIONS LAW II
On dispute
resolution
On information for
market analysis
On application of
remedies
On consultations
with market
On universal
service
On comprehensive
directories
On detalization of
service bills
On publication of
QoS surveys
On control of
payments
On connection of
private networks
INFRINGEMENT PROCEDURES
Nr
1
Year
2005
Case
Non-conformity with e-Privacy Directive (spam)
2
Number portability (fixed and mobile)
3
Directory Services
4
2005/2006
Failure to carry out market review
5
2006
Non-availability of caller location information for 112
6
Incomplete transformation of notification mechanism
7
2008/2010
Independence of NRA
8
2009/2011
Administrative charges
Digital Agenda: Commission asks Court of Justice to fine five Member
States for missing telecom rules implementation deadline
Member State
Daily penalty
Belgium
The Netherlands
Poland
Portugal
Slovenia
€70 353,36
€105 688,8
€112 190,4
€22 014,72
€13 063,68
What is proposed - a daily penalty payment on each Member State (see table
below) which would be paid as from the date of the Court's ruling until full
transposition of the rules into national law is notified.