Article contents
The Metamorphoses of Universal Service in the European Telecommunications and Energy Sector: A Trans-Sectoral Perspective
Published online by Cambridge University Press: 06 March 2019
Extract
Universal service has a pivotal role in market liberalization and competition on both sides of the Atlantic. It is central to the European thinking on markets and public service and is an inevitable element of market liberalization and sectoral competition rules. The universal service aims at preserving the public service in a competitive environment. The paper analyzes this cornerstone of the European thinking from a comparative and trans-sectoral perspective, demonstrating that the concept of universal services should be fundamentally re-conceptualized in EU electronic communications and energy regulation.
- Type
- Articles
- Information
- Copyright
- Copyright © 2013 by German Law Journal GbR
References
1 Eur. Comm'n, Universal Service in E-communications: Report on the Outcome of the Public Consultation and the Third Periodic Review of the Scope in Accordance with Article 15 of Directive 2002/22/EC, at 4–5, COM (2011) 795 final (Nov. 23, 2011).Google Scholar
2 See id. at 3.Google Scholar
3 Parsons, Steve B. & Bixby, James, Universal Service in the United States: A Focus on Mobile Communications, 62 Fed. Comm. L.J. 119, 133–34 (2010); Charles Wolf, Markets or Governments: Choosing Between Imperfect Alternatives (2d ed. 1988); Ronald H. Coase, The Problem of Social Cost, 3 J.L. & Econ. 1, 34 (1960).Google Scholar
4 Of course, the state may intervene also in cases where it is not supposed to.Google Scholar
5 Cf. Nenova, Mira B., The New Concept of Universal Service in a Digital Networked Communications Environment, (2007) 3 J.L. & Pol'y Info. Soc'y 117, 131–32 (2010) available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1120282 and http://dx.doi.org/10.2139/ssrn.1120282 (last visited July 23, 2013) (The major justifications of “public intervention in the economy [are], in particular[,] market failures and redistributive considerations.”).Google Scholar
6 Fed. Commc'ns Comm'n, Connecting America: the National Broadband Plan 21 (2010) available at http://www.broadband.gov/download-plan/ (last visited July 23, 2013) (“The desire for equal opportunity has long guided our efforts to make access to technologies universal, from electricity to telephony, from television to radio.”).Google Scholar
7 Eur. Comm'n, Green Paper on Services of General Interest, ¶ 5, COM (2003) 270 final (May 21, 2003), available at http://eur-lex.europa.eu/LexUriServ/site/en/com/2003/com2003_0270en01.pdf (last visited July 23, 2013) (“[T]o guarantee access for everyone, whatever the economic, social or geographical situation, to a service of a specified quality at an affordable price.”).Google Scholar
8 Cf. Nenova, supra note 5, at 131–32 (Universal service contributes to the achievement of the following objectives: “(i) internalization of network externalities; (ii) redistribution between users (of different locations and/or income groups); and (iii) the realization of some public goods (such as an all-encompassing communications network).”).Google Scholar
9 For a detailed analysis see Parsons & Bixby, supra note 3, at 133–41.Google Scholar
10 See, e.g., John T. Wenders, The Economics of Telecommunications: Theory and Policy 29 (1987); Lester D. Taylor, Telecommunications Demand in Theory and Practice 9 (1994); Ingo Vogelsang & Bridger M. Mitchell, Telecommunications Competition: The Last Ten Miles 51 (1997); Harald Gruber, The Economics of Mobile Telecommunications 191 (2005); Parsons & Bixby, supra note 3, at 134–35.Google Scholar
11 See Alan McKenna, A Human Right to Participate in the Information Society (2011).Google Scholar
12 See Case C-320/91, Paul Corbeau, 1993 E.C.R. I-2563, ¶¶ 17–18.Google Scholar
13 See Council Directive 2002/22, Annex V, 2002 O.J. (L108) 51, 74 (EC); 47 U.S.C. § 254(b) (2012).Google Scholar
14 See Wolf Sauter, Services of General Economic Interest and Universal Service in EU Law, 33 Eur. L. Rev. 167, 179–80 (2008), available at http://arno.uvt.nl/show.cgi?fid=93577 (last visited July 23, 2013).Google Scholar
15 Eur. Comm'n, Communication on the Second Periodic Review of the Scope of Universal Service in Electronic Communications Networks and Services in Accordance with Article 15 of Directive 2002/22/EC, at 6–7, COM (2008) 572 final (Sept. 25, 2008), available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2008:0572:FIN:EN:PDF (last visited July 23, 2013).Google Scholar
16 See Christopher H. Sterling, Phyllis W. Bernt & Martin B.H. Weiss, Shaping American Telecommunications: A History of Technology, Policy, and Economics 197 (2006); Milton L. Mueller, Universal Service: Competition, Interconnection, and Monopoly in the Making of the American Telephone System 101 (1997); Gamham, Universal Service, in Telecom Reform: Principles, Policies and Regulatory Practices 200 (William H. Melody ed., 1997) (Universal service was “mobilised as an attempted defence of the telephone monopoly.”).Google Scholar
17 Helmuth Cremer, Farid Gasmi, André Grimaud & Jean-Jacques Laffont, The Economics of Universal Service: Practice 1 (1998), available at http://info.worldbank.org/etools/docs/library/64601/practice.pdf (last visited July 23, 2013); Nenova, supra note 5, at 121.Google Scholar
18 Young, Mark, The Future of Universal Service. Does it Have One?, 13 Int'l J.L. & Info. Tech. 188, 189 (2005); Mueller, supra note 16, at 4; Parsons and Bixby, supra note 3, at 123–24.Google Scholar
19 See Fabrizio Cugia di Sant'Orsola, Universal Service Obligation: Oh Dear, I Shall Be Late! Said the White Rabbit, 4 Convergence 31, 34 (2008).Google Scholar
20 See, e.g., U.S. Postal Serv., Universal Service and the Postal Monopoly: A Brief History (2008), available at http://about.usps.com/who-we-are/postal-history/universal-service-postal-monopoly-history.pdf (last visited July 23, 2013); U.S. Postal Serv., Report On Universal Postal Service and The Postal Monopoly (2008), available at http://about.usps.com/universal-postal-service/usps-uso-report.pdf (last visited July 23, 2013).Google Scholar
21 Sterling, Bernt & Weiss, supra note 16, at 197.Google Scholar
22 Valentiny, Pál, Az univerzális szolgáltatás és a közszolgáltatások értelmezéséről az Európai Unióban, 47 Közgazdasági Szemle 341, 350 (2000), available at http://epa.oszk.hu/00000/00017/00059/pdf/valentiny.pdf (last visited July 23, 2013).Google Scholar
23 Sterling, Bernt & Weiss, supra note 16, at 198; Fed.-State Joint Bd. on Universal Serv., 97 FCC Rcd. 157, ¶ 12 (1997), available at http://www.e-ratecentral.com/FCC/fcc_97-157.pdf (last visited July 23, 2013).Google Scholar
24 See Abernathy, Kathleen Q., Preserving Universal Service in the Age of IP, 3 J. Telecomm. & High Tech. L. 409, 410–11 (2005).Google Scholar
25 Young, supra note 18, at 191–92. As to the social considerations see Harmeet Sawhney, Universal Service: Prosaic Motives and Great Ideals, 38 J. Broad. & Elec. Media 375, 380 (1994); Brian Regan, Ushering Universal Service Reform: Politically Feasible Legislative Principles, 16 CommLaw Conspectus 471 (2008).Google Scholar
26 See Marshall, Thomas H., Citizenship and Social Class (1950); Paschal Preston & Roderick Flynn, Rethinking Universal Service: Citizenship, Consumption Norms, and the Telephone, 16 Info. Soc'y 91, 95 (2006). For a criticism on the theoretical foundations of universal service see Mueller, supra note 16.Google Scholar
27 Eur. Comm'n, supra note 7, ¶ 50.Google Scholar
28 See Nenova, supra note 5, at 131, 134–36.Google Scholar
29 Mainly but not exclusively: Universal service also embraces directory enquiry services and directories (Article 5), public pay telephones (Article 6) and special measures for disabled users (Article 7).Google Scholar
30 Council Directive 2002/22, supra note 13, art. 3(1), at 59.Google Scholar
31 Eur. Comm'n, supra note 1, at 3. See Council Directive 2002/22, supra note 13, ¶ 8, at 52.Google Scholar
32 Org. for Econ. Co-op. & Dev., Rethinking Universal Service for a Next Generation Network Environment 5 (2005), available at http://www.oecd.org/dataoecd/59/48/36503873.pdf (last visited July 23, 2013).Google Scholar
33 Cf. Nenova, supra note 5, at 137 (“[C]ommunications should be thought of not only as ‘transmission systems', but also in terms of their special role as channels carrying and disseminating information and content.”).Google Scholar
34 See Eur. Comm'n, supra note 1, at 7–9.Google Scholar
35 Eur. Comm'n, Report Regarding the Outcome of the Review of the Scope of Universal Service in Accordance with Article 15(2) of Directive 2002/22/EC, ¶ 4, COM (2006) 163 final (July 4, 2006), available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52006DC0163:EN:HTML (last visited July 23, 2013).Google Scholar
36 Id. ¶ 3.3.Google Scholar
37 Id. Google Scholar
38 Eur. Comm'n, supra note 15, at 9; Eur. Comm'n, supra note 1, at 7.Google Scholar
39 Eur. Comm'n, supra note 1, at 4.Google Scholar
40 Eur. Comm'n, supra note 15, at 12.Google Scholar
41 Eur. Comm'n, supra note 1, at 4–5.Google Scholar
42 Id. at 3.Google Scholar
43 Fed.-State Joint Bd. on Universal Serv., 97 FCC Rcd. 157, §§ VII-XI (1997). For a description of the operation of the above mechanisms, see Regan, supra note 25, at 471–502.Google Scholar
44 See Frieden, Rob, Killing with Kindness: Fatal Flaws in the $6.5 Billion Universal Service Funding Mission and What Should be Done to Narrow the Digital Divide, 24 Cardozo Arts & Ent. L.J. 447 (2006).Google Scholar
45 Fed. Commc'ns Comm'n, Trends in Telephone Service 19–5 (2010), available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-301823A1.pdf (last visited July 23, 2013) (showing that in 2007, this was 6.955 billion USD, in 2006 7.106 billion USD).Google Scholar
46 Fed. Commc'ns Comm'n, Proposed Third Quarter 2013 Universal Service Contribution Factor 1 (2013), available at http://transition.fcc.gov/Daily_Releases/Daily_Business/2013/db0612/DA-13-1361A1.pdf (last visited July 23, 2013).Google Scholar
47 Fed. Commc'ns Comm'n, Proposed first Quarter 2001 Universal Service Contribution Factor 3 (2000), available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-00-2764A1.pdf (last visited July 23, 2013); Fed. Commc'ns Comm'n, Proposed first Quarter 2006 Universal Service Contribution Factor 1 (2005), available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-05-3203A1.pdf (last visited July 23, 2013). On the funding of universal service in the U.S., see Allen S. Hammond IV, Universal Service: Problems, Solutions, and Responsive Policies, 57 Fed. Comm. L.J. 187, 187–200 (2005).Google Scholar
48 47 U.S.C. § 254(c)(1) (2012).Google Scholar
49 Id. Google Scholar
50 The above enumeration does not follow the structure established by the FCC but presents the elements of universal service in a scheme more familiar to Europeans. This implies some necessary simplification.Google Scholar
51 Fed.-State Joint Bd. on Universal Serv., 97 FCC Rcd. 157, ¶ 22 (1997).Google Scholar
52 Id. ¶¶ 26–27, 46–48; Alenco Commc'ns, Inc. v. FCC, 201 F.3d 608 (5th Cir. 2000).Google Scholar
53 Sterling, Bernt & Weiss, supra note 16, 272.Google Scholar
54 Fed.-State Joint Bd. on Universal Serv., 97 FCC Rcd. 157, ¶ 83 (1997).Google Scholar
55 Id. Google Scholar
56 Fed.-State Joint Bd. on Universal Serv., 03 FCC Rcd. 170, ¶¶ 9–11 (2003), available at http://www.universalservice.org/_res/documents/about/pdf/fcc-orders/2003-fcc-orders/FCC-03-170.pdf (last visited July 23, 2013). For an analysis of universal service from the perspective of mobile communications, see Parsons & Bixby, supra note 3.Google Scholar
57 High-Cost Universal Serv. Support, 07J FCC Rcd. 4, ¶ 4 (2007), available at http://www.acuta.org/wcm/acuta/legreg/l158.pdf (last visited July 23, 2013).Google Scholar
58 Id. ¶¶ 11–23Google Scholar
59 High-Cost Universal Serv. Support, 08 FCC Rcd. 262, ¶ 13 (2008), available at http://www.fcc.gov/fcc08262/FCC-08-262A1.pdf (last visited July 23, 2013).Google Scholar
60 Lifeline & Link Up Reform & Modernization, 11 FCC Rcd. 32 (2011), available at http://www.universalservice.org/_res/documents/about/pdf/fcc-orders/2011-fcc-orders/FCC-11-32.pdf (last visited July 23, 2013).Google Scholar
61 47 U.S.C. § 1305(k)(2) (2012).Google Scholar
62 Fed. Commc'ns Comm'n, supra note 6, at 21.Google Scholar
63 Connect America Fund, 11 FCC Rcd. 13, ¶ 18 (2011), available at http://www.universalservice.org/_res/documents/about/pdf/fcc-orders/2011-fcc-orders/FCC-11-13.pdf (last visited July 23, 2013).Google Scholar
64 Connect America Fund, 11 FCC Rcd. 161, ¶¶ 43–73 (2011), available at http://transition.fcc.gov/Daily_Releases/Daily_Business/2012/db0206/FCC-11-161A1.pdf (last visited July 23, 2013).Google Scholar
65 Id. ¶ 17.Google Scholar
66 Werbach, Kevin, Connections: Beyond Universal Service in the Digital Age, 7 J. Telecomm. & High Tech. L. 67, 71–72 (2009).Google Scholar
67 Council Directive 2009/72, 2009 O.J. (L211) 55 (EC).Google Scholar
68 Council Directive 2003/54, 2003 O.J. (L176) 37 (EC).Google Scholar
69 The right to be connected is not restricted to household customers; distribution companies are obliged to connect all customers to the network. According to Article 2(7), the term “customer” includes both wholesale and final customers. Council Directive 2009/72, supra note 67, art. 2(7), at 63.Google Scholar
70 See Council Directive 2009/72, supra note 67, art. 3(3), at 64.Google Scholar
71 Id. The general deadline for implementation of Directive 2009/72 was March 3, 2011. It replaced Directive 2003/54, which defined the scope of electricity universal service in Article 3(3) in the same way. Cf. Cremer, Gasmi, Grimaud & Laffont, supra note 17, at 7. On the scope of universal service in EU electricity law see Thomas von Danwitz, Regulation and Liberalization of the European Electricity Market—A German View, 27 Energy L.J. 423, 438–39 (2006); EURELECTRIC, Report on Public Service Obligations 12–13 (2004), available at http://www.google.hu/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&ved=0CEAQFjAD&url=http%3A%2F%2Fwww.eurelectric.org%2FDownload%2FDownload.aspx%3FDocumentID%3D14841&ei=P1QaUNDRENHgtQbZ5IGYBg&usg=AFQjCNEC4yM8VhSA9UW7p1DHFRnGJhaaxw (last visited July 23, 2013).Google Scholar
72 See Cameron, Peter D., Completing the Internal Market in Energy: An Introduction to the New Legislation, in Legal Aspects of EU Energy Regulation 25, ¶ 2.48 (Peter D. Cameron ed., 2005).Google Scholar
73 Eur. Regulators Grp. For Elec. & Gas, Status Review of End-User Price Regulation as of 1 January 2010 14–15 (2010), available at http://www.energy-regulators.eu/portal/page/portal/EER_HOME/EER_PUBLICATIONS/CEER_PAPERS/Customers/Tab1/E10-CEM-34-03_price%20regulation_8-Sept-2010.pdf (last visited July 23, 2013). For the definition of ‘end-user regulated price’ as used in the Status Review, see id. at 11.Google Scholar
74 Int'l Energy Agency, Energy Policies of IEA Countries: Poland 2011 Review 14 (2011); President of the Energy Regulatory Office in Poland, National Report to the European Commission 10–11, 40, 103–05 (2011), available at www.ure.gov.pl/download/2/245/National_Report_2011.pdf (last visited July 23, 2013).Google Scholar
75 See Int'l Energy Agency, Energy Policies of IEA Countries: France 2009 Review 111, 114–17 (2010).Google Scholar
76 Code de l'énergie [C. Éner.] art. L121-1 (Fr.) (“[L]e service public de l'électricité assure les missions de développement équilibré de l'approvisionnement en électricité, de développement et d'exploitation des réseaux publics de transport et de distribution d'électricité ainsi que de fourniture d'électricité, dans les conditions définies à la présente section.”).Google Scholar
77 Code de l'énergie [C. Éner.] art. L121-5 (Fr.) (“La mission de fourniture d'électricité consiste à assurer, en favorisant la maîtrise de la demande, la fourniture d'électricité, sur l'ensemble du territoire, aux clients bénéficiaires des tarifs réglementés de vente dans les conditions prévues aux articles L. 337–4 à L. 337–9. L'électricité est fournie par le raccordement aux réseaux publics ou, le cas échéant, par la mise en æuvre des installations de production d'électricité de proximité mentionnées à l'article L. 222.4-33 du code général des collectivités territoriales.”).Google Scholar
78 Code de l'énergie [C. Énergy] arts. L121-6, L121-8 (Fr.).Google Scholar
79 Int'l Energy Agency, Energy Policies of IEA Countries: Spain 2009 Review 115 (2009).Google Scholar
80 Id. at 117; Comisión Nacional de Energía, Spanish Energy Regulator's Annual Report to the European Commission 8–9 (2010), available at http://www.energy-regulators.eu/portal/page/portal/EER_HOME/EER_PUBLICATIONS/NATIONAL_REPORTS/National%20Reporting%202010/NR_En/E10_NR_Spain-EN.pdf (last visited July 23, 2013); Comisión Nacional de Energía, Spanish Energy Regulator's Annual Report to the European Commission 48–49, 120–22 (2011), available at http://www.energy-regulators.eu/portal/page/portal/EER_HOME/EER_PUBLICATIONS/NATIONAL_REPORTS/National%20Reporting%202011/NR_En/C11_NR_Spain-EN.pdf (last visited July 23, 2013).Google Scholar
81 Entidade Reguladora Dos Serviços Energéticos, Annual Report to the European Commission 19 (2011) (Pt.), available at http://www.erse.pt/pt/uniaoeuropeia/Documents/Annual_Report_EC_2011.pdf (last visited July 23, 2013).Google Scholar
82 273/2007. (X.19.) Korm. rendelet a villamos energiáról szóló 2007. évi LXXXVI. törvény egyes rendelkezéseinek végrehajtásáról (Government Decree No. 273/2007 (X.19.) on the Implementation of Act No. LXXXVI of 2007 on Electric Energy) (Hung.).Google Scholar
83 Id. Google Scholar
84 Úrad pre reguláciu sietových odvetví, National Report Regulatory Office for Network Industries Slovak Republic 33–34 (2010), available at http://www.energy-regulators.eu/portal/page/portal/EER_HOME/EER_PUBLICATIONS/NATIONAL_REPORTS/National%20Reporting%202010/NR_En/E10_NR_Slovakia-EN.pdf (last visited July 23, 2013).Google Scholar
85 Int'l Energy Agency, Energy Policies of IEA Countries: Italy 2009 Review 84 (2010); Autorità per l'energia elettrica e il gas, Annual Report on the State of Services and Regulatory Activities: 2. Structure, Prices and Quality in the Electricity Sector 73, available at http://www.autorita.energia.it/allegati/relaz_ann/10/volI_%20cap2_en.pdf (last visited July 23, 2013).Google Scholar
86 Autorità per l'energia elettrica e il gas, supra note 85, at 79.Google Scholar
87 See Dutch Electricity Act of 1998 § 95b(3). This price control is applicable to the supply to small consumers, that is, “customers with a connection to a grid with a total maximum transmission value of less than 3·80 A.” See Id. § 95a(1).Google Scholar
88 Int'l Energy Agency, Energy Policies of IEA Countries: The Netherlands 2008 Review 102 (2009).Google Scholar
89 Council Directive 2009/73, 2009 O.J. (L211) 94 (EC).Google Scholar
90 See Council Directive 2003/55, art. 3(3), 2003 O.J. (L176) 57, 62 (EC).Google Scholar
91 See Cremer, Gasmi, Grimaud & Laffont, supra note 17, at 7.Google Scholar
92 Council Directive 2009/73, supra note 89, art. 3(2), at 103.Google Scholar
93 Id. art. 3(3), at 103.Google Scholar
94 Case C-265/08, Federutility and Others v. Autorità per l'energia elettrica e il gas, 2010 ECR I-03377.Google Scholar
95 Id. ¶¶ 17–24.Google Scholar
96 Id. ¶¶ 26–32.Google Scholar
97 Id. ¶ 33. For a detailed analysis of the requirement of proportionality, see id. ¶¶ 35–47.Google Scholar
98 Id. ¶ 33.Google Scholar
99 See Pietro Cavasola & Matteo Ciminelli, Italy, in Gas Regulation in 32 Jurisdictions Worldwide 111, 114 (Florence Ninane, Alexandre Ancel & Liliana Eskenazi eds., 2012).Google Scholar
100 2008. évi XL. törvény a földgázellátásról (Act XL of 2008 on Natural Gas Supply) §§ 32–40 (Hung.).Google Scholar
101 Id. § 34(1).Google Scholar
102 Int'l Energy Agency, supra note 79, at 64, 70; Comisión Nacional de Energía, Spanish Energy Regulator's Annual Report to the European Commission 12–13 (2010); Comisión Nacional de Energía, Spanish Energy Regulator's Annual Report to the European Commission 124–26 (2011).Google Scholar
103 Unfortunately, this fundamental regulatory difference is, in certain instances, not adequately taken into account, creating the deceptive impression that Federutility is directly applicable to the electricity sector. See, e.g., Energy Cmty. Secretariat, Regulated Energy Prices in the Energy Community—-State of Play and Recommendations for Reform 5–6 (2012), available at http://www.energy-community.org/pls/portal/docs/1568177.PDF (last visited July 23, 2013).Google Scholar
104 See Council Directive 2002/22, supra note 13, Annex V, at 74; 47 U.S.C. § 254(b).Google Scholar
105 For further discussion of the debate in Germany regarding whether broadband should be included in the scope of universal service, see Ludwig Gramlich, Next Generation Universal Service in the Field of Electronic Communications? Some Lessons from the Debate on Countrywide Broadband Service in Germany, 3 Masaryk U. J.L. & Tech. 345 (2009).Google Scholar
106 Contra Nenova, supra note 5, at 142–44 (arguing that “besides the newly formulated tasks of universal service in terms of access to networks and innovation, … in the longer-term evolution of the Information Society, the idea of universal access will need to be extended to include content.“).Google Scholar
107 E.g., for France, see Code de l'énergie [C. Énergy] arts. L121-6, L121-8. For Spain, see Int'l Energy Agency, supra note 79, at 117; Comisión Nacional de Energía, Spanish Energy Regulator's Annual Report to the European Commission 8–9 (2010); Comisión Nacional de Energía, Spanish Energy Regulator's Annual Report to the European Commission 48–49, 120–22 (2011).Google Scholar
108 E.g., for Hungary, see 273/2007. (X.19.) Korm. rendelet a villamos energiáról szóló 2007. évi LXXXVI. törvény egyes rendelkezéseinek végrehajtásáról (Government Decree No. 273/2007 (X.19.) on the Implementation of Act No. LXXXVI of 2007 on Electric Energy).Google Scholar
109 See EURELECTRIC, Reference ‘Retail Market Model': Bringing the Benefits of Competitive Electricity Markets to the Customer 10–11 (2007), available at http://www.eurelectric.org/Download/Download.aspx?DocumentID=22565 (last visited July 23, 2013); Eur. Comm'n, Prospects for the Internal Gas and Electricity Market, at 6, COM (2006) 841 final (January 10, 2007), 6; Energy Cmty. Secretariat, supra note 103, at 7–9.Google Scholar
- 2
- Cited by