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Regulatory Reform of European Telecommunications: Past Experience and Forward-Looking Perspectives

Published online by Cambridge University Press:  17 February 2009

Günter Knieps
Günter Knieps
Affiliation:
Prof. Dr. Günter Knieps, Albert-Ludwigs-Universität, Freiburg.
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Extract

A cornerstone for the take-off of the development towards competition in European telecommunications markets was the Commission of the European Communities' British Telecom decision in 1982 and its confirmation by the European Court of Justice in 1985. According to this decision, British Telecom should no longer be permitted to forbid the high-speed forwarding of telex messages between foreign countries by competitive agencies in Great Britain. The procedural setting of this case was most unusual because the Italian government and not British Telecom appealed against the Commission's decision. Moreover, the British government intervened, taking sides not with the Italian government, but with the Commission. The important message of the British Telecom case has been that the Commission of the European Communities is able to apply the Treaty of Rome's competition rules in the European telecommunications administration based on the public law of the different member countries.

Type
Research Article
Information
European Business Organization Law Review (EBOR) , Volume 2 , Issue 3-4 , September 2001 , pp. 641 - 655
Copyright
Copyright © T.M.C. Asser Press and the Authors 2001

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References

1 For a detailed explanation of this case see Schulte-Braucks, , “Das ‘British Telecom’-Urteil: Eckstein für ein europäisches Fernmelderecht?”, 3 Wirtschaft und Wettbewerb (1986) 202–215.Google Scholar

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3 In addition, the Commission pleaded for a liberalization of the procurement policy of the national telecommunications administrations as well as for an introduction of European-wide telecommunications standards.

4 Only the margin of physical networks (mobile radio and low speed satellite communications) were opened for competition.

5 Gesetz zur Neustrukturierung des Post- und Fernmeldewesens und der Deutschen Bundespost (Poststrukturgesetz) of 8 June 1989, Bundesgesetzblatt Teil I (14 June 1989) 1026-1051.

6 For the telecommunications sector, the Deutsche Telekom AG was founded.

7 COM (94) 440 fin.

8 Commission Directive 96/19/EC of 13 March 1996 amending Directive 90/388/EEC with regard to the implementation of full competition in the telecommunications markets, OJ [1996] L 74/13.

9 See for example section 2 (§§ 17-22) of the new German telecommunications law TKG (of 25 July 1996) as well as the Telekommunikations-Universaldienstleistungsverordnung (of 30 January 1997).

10 The literature on price-cap regulation, in contrast, has developed the concept of rate stability in order to restrain monopoly power (as a substitute for rate of return regulation); e.g. Brennan, , “Regulation by ‘Capping’ Prices”, US Department of Justice, Economic Analysis Group D.P. (1988), EAG 88Google Scholar, 11 September. In this context “social contract” transition methods have been outlined, for example, by Haring, / Kwerel, , “Competition Policy in the Post-Equal Access Market”, Office of Plans and Policy of the Federal Communications Commission, O.P.P. Working Paper 22 (February 1987).Google Scholar

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15 For an illustrative survey of these developments the reader is referred to European Commission: ONP COMMITTEE Subject: Revision of the ONP Framework Directive ONPCOM 95-31, Brussels (17 July 1995).

16 Similar ONP policies can also be observed in other network industries, e.g. railroads and airlines (e.g. Knieps, , “Competition, coordination and cooperation – A disaggregated approach to transport regulation”, 3/3Utilities Policy (1993) 201–207).CrossRefGoogle Scholar

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19 “Major commercial investments in long-distance optical fibre infrastructure are underway in Europe, and it is expected that several thousand kilometres of optical fibre will become operational by the early part of 2000, linking all major European cities. This massive investment in alternative infrastructure is expected to create for the first time significant competition for the incumbent operators' leased line offers, in particular on their long-distance and cross-border leased line markets. However, new entrants may not be able to provide complete end-to-end leased lines to meet all their customers' needs, and will often have to rely on the incumbent to provide a short-distance leased circuit to link the customers premises to the new entrant's network (a “leased line part circuit”). This is particularly the case for new entrants wishing to serve Small and Medium Enterprises (SMEs).”, Commission of the European Communities, Commission Recommendation on leased lines interconnection pricing in a liberalised telecommunications market, Brussels, C (1999) 3863, 24.11.1999, at 5.

20 Cf. European Commission, Directorate General XIII ONP COMMITTEE, Subject: The 1999 Review of the Telecommunications Regulatory Framework, ONP COM 98-42, Brussels, 11 September 1998.

21 Proposal for a Directive on a common regulatory framework for electronic communications networks and services (COM (2000) 393).

22 Proposal for a Directive on access to, and interconnection of, electronic communications networks and associated facilities (COM (2000) 384).

23 Proposal for a Directive on the authorisation of electronic communications networks and services (COM (2000) 386).

24 Proposal for a Directive on universal service and users' rights relating to electronic communications networks and services (COM (2000) 392).

25 Proposal for a Directive on the processing of personal data and the protection of privacy in the electronic communications sector (COM (2000) 385).

26 Regulation on unbundled access to the local loop (European Parliament and Council 2000/0185 (COD), 5 December 2000).

27 This does not rule out the fact that directives may have direct effect in Member States, provided that the provisions of the directive are sufficiently precise and unconditional.

28 Stigler, , “Barriers to Entry, Economies of Scale, and Firm Size”, in: Stigler, (ed.), The Organization of Industry (Irwin, Homewood, Ill. 1968) 67–70, at p. 67.Google Scholar

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31 E.g. Laffont, /Tirole, , Competition in Telecommunications (Cambridge, Massachusetts, London, England: MIT Press 2000) ch. 4.Google Scholar

32 E.g. Mandy, ,“Killing the Goose That May Have Laid the Golden Egg: Only the Data Know Whether Sabotage Pays”, 17/2 Journal of Regulatory Economics (2000) 157–172.CrossRefGoogle Scholar

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36 Commission of the European Communities, supra n. 19, p. 1.

37 European Commission, supra n. 18, 2-28.

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40 Cf. Distelkamp, , “Möglichkeiten des Wettbewerbs im Orts- und Anschluβbereich des Telekommunikationsnetzes”, WIK Diskussionsbeitrag No. 196 (Bad Honnef 1999) 94.Google Scholar

41 Regulierungsbehörde für Telekommunikation und Post, Jahresbericht 1999, 24.