Part II of Telecommunications Infrastructure Green Paper

On 25 January 1995, the Commission adopted Part II of the Green Paper on the Liberalization of Telecommunications Infrastructure and Cable TV Networks. Part I of the Green Paper, adopted on 25 October 1994, set out the general principles and proposed a timetable for liberaliz...

On 25 January 1995, the Commission adopted Part II of the Green Paper on the Liberalization of Telecommunications Infrastructure and Cable TV Networks.

Part I of the Green Paper, adopted on 25 October 1994, set out the general principles and proposed a timetable for liberalization. Part II examines the substantive issues involved in establishing the regulatory framework for full competition in the telecommunications sector.

Infrastructure liberalization, whereby operators will be permitted to apply for licences to build or develop new telecommunications networks, will be one of the key factors in encouraging the development of communications and the information society in the EU.

In particular, it will lower the price of telecommunications, encourage innovation and the exploitation of new technologies, improve the provision of telecommunications services to both industrial and residential consumers, and stimulate the injection of private capital into the sector.

Services conveyed over telecommunications infrastructure in the European Union amounted to approximately ECU 120 billion during 1993.

Part II of the Green Paper deals with the main issues involved in establishing the future regulatory framework. Universal service consists of access to a defined minimum service of specified quality to all users at an affordable price based on the principle of universality, equality and continuity.

Three major issues are raised in the Green Paper, namely:

- Definition and scope of universal service;
- A common approach to costing universal service;
- Financing of universal service in a competitive environment.

EU-wide standards for universal service have already been proposed under the auspices of the application of Open Network Provision (ONP) rules to the voice telephony service. The Green Paper indicates a preference for using universal service funds rather than access charges.

Interconnection and interoperability of infrastructures and services will be a major commercial issue. Interconnection will primarily be a matter for national regulatory authorities within an overall framework. All interconnection agreements are subject to the competition rules.

The Green Paper outlines the scope of an Interconnection Directive, foreseen in the Commission's Action Plan on the Information Society, which will govern access to and interconnection with public infrastructure networks.

Some of the major issues dealt with by the Directive concern:

- The rights and obligations on public telecommunications;
- Infrastructure providers with regard to interconnection requests, including obligations to interconnect and provide standard interconnection offerings;
- Common rules for fair competition;
- Dispute-resolution mechanisms.

The Green Paper recognizes that the licensing of telecommunications infrastructures, networks and services will remain a matter for national regulatory authorities. An overall framework is required which sets the general principles and procedures for granting licences and which strikes an appropriate balance between excessive regulation and reasonable safeguards.

The Green Paper sets the common approach to infrastructure more broadly within the context of the overall approach to the information society. Although it focuses on telecommunications infrastructures, the Green Paper shows that the worlds of telecommunications, broadcasting and computing are moving together. This is because many of the new digital telecommunications services lie between traditional telecommunications and broadcasting.

The Green Paper does not aim to extend telecommunications regulation to other sectors of the economy. Rather, it recognizes that there are different policy objectives which underlie the regulatory approach in the various sectors and that these different objectives will remain even when technologies and markets converge. A clear framework for infrastructure liberalization is therefore complementary to the evolution of Union policy in other related fields, such as intellectual property rights, audiovisual policy and media concentration - all areas which are central to the emerging information society.

In conjunction with Part I of the Infrastructure Green Paper, the Commission has opened a broad consultation on the future regulatory framework for infrastructure liberalization in the European Union. The Commission is inviting comments on all the issues raised and will also organize hearings in Brussels with interested parties early in 1995. The Commission intends to complete its consultations during the French Presidency in the first half of the year, enabling it to come forward, before the end of 1995, with a proposed package of measures for widespread reform of the regulatory environment.