2003 EU Regulatory Framework for Electronic Communications

European Union introduced in July 2000, the package of legislative proposals that became the basis for the new EU Regulatory Framework for Electronic Communications. This was just a couple of months after the Turkish Parliament had enacted the Law Numbered 4502 that overhauled the Turkish telecommunications regime. The Law Numbered 4502 was based on the old regulatory framework of the EU. However, before it became applicable a new regulatory framework was proposed. This article is prepared to point out some important elements of the 2003 EU Regulatory Framework. The first major document in the EU with respect to the telecommunications regulations were appeared in 1987 when the Commission issued the Green Paper. There were two main themes in the early stages of the regulation of the European telecommunications sector; liberalization and harmonization. Between 1988,
LW. Tolga Ýþmen
Derman Ortak Avukat Bürosu
when the Terminal Equipment Directive was issued, and 1998, when Full Competition Directive was become enforceable many directives, decisions and notices regulating the telecommunications sector was issued. In 1999 the Commission issued (among other relevant documents) a Communication entitled “Towards a New Framework for Electronic Communications Infrastructure and Associated Services”. This Communication set forth the five principle aims of the proposed regulatory reform: (i) to promote more effective competition, (ii) to react technological and market developments, (iii) to remove unnecessary regulation and simplify associated administrative procedures; (iv) to strengthen the internal market and (v) to protect consumers.
Framework Directive (2002/21/EC), Authorization Directive (2002/20/EC), Access Directive (2002/19/EC), Universal Service Directive (2002/22/EC) and Decision on Radio Spectrum Policy (2002/622/EC) were published in the Official Journal of 24 April 2002. These measures must be transposed into national law by July 24, 2003. The Directive on Privacy and Electronic Communications (2202/58/EC) was published in the Official Journal of July 31, 2002. The provisions of this Directive must be transposed into national law by October 31, 2003. The regulatory framework also includes the Commission Directive 2002/77/EC on competition in the markets for electronic communications networks and services; Commission Guidelines 2002/C 165/03 on market analysis and the assessment of significant market power; Decision 2002/627/EC establishing the European Regulators Group for Electronic Networks and Services; and Commission Recommendation of February 11, 2003 on relevant product and service markets.
The new regulatory framework had introduced serious changes. The new regulatory framework covers all electronic communications networks, including networks used for broadcast services. The new Framework Directive accepts the principle of technological neutrality. Accordingly, there shall be no discrimination between different means of transmission for regulatory purposes.
The new Authorization Directive abolishes individual licensing and accepts the system of general authorizations. After July 24, 2003, individual licenses can only be issued where the allocation of radio frequency or numbering ranges are necessary. This is a major difference with the Turkish system. The Telecommunications Board of Turkey currently grants telecommunications licenses (i.e. individual licenses) to most of the operators although there is no need for radio frequency or numbering rage allocation. The recent decision of the Constitutional Court with respect to Law Numbered 4502 also complicates the situation. The Constitutional Court upheld the Law Numbered 4502 but in doing so evaluate all telecommunications licenses as a form of concession contracts. The impact of this decision should be discussed in another forum.
The Access Directive repeals the Regulation of December 18, 2000 on Unbundled Access to Local Loop. However, the provisions of the Access Directive are not introducing major changes in this field. Pursuant to the new regulatory framework the obligation to negotiate interconnection has been extended to all operators of public communications networks.
Article 4 of the Framework Directive requires the Member States to ensure that effective mechanisms exist to enable to appeal against the decisions of the national regulators authorities (such as the Turkish Telecommunications Board). The same article also stipulates that such body shall have the appropriate expertise to carry out its functions. Danýþtay (the supreme administrative court) has the jurisdiction over the decisions of the Telecommunications Board. However, it is open to discussion whether they have the required expertise or not.
It should also be noted that the “sector-specific” nature of the old framework is brought more into line with general competition law principles by the new regulatory framework. The most significant change towards this direction is the way that the operators with significant market power (“SMP”) are identified and regulated. Pursuant to the old regulatory framework the operators with more than 25% market share in a specific market are presumed to have SMP. The Framework Directive abolished this approach and redefined SMP in line with the general competition law concept of market dominance. An operator shall be deemed to have SMP if, either individually or jointly, enjoys a position equivalent to dominance. Article 14 of the Framework Directive also sets forth that dominance is a position of economic strength affording the relevant operator (or operators in the event of a joint dominance) the power to behave to an appreciable extent independently of competitors, customers and ultimately its consumers. This definition is in line with the definition used by the Commission and the European Court of Justice in the context of general competition law issues. The new regulatory framework, with this new definition of SMP, increases the threshold of having SMP. At the same time, it reduces the importance of operators that have SMP. The national regulatory authorities can only impose any specific regulatory obligations to an operator if the relevant market is not effectively competitive. Therefore, the national regulatory authorities do not have an automatic right to impose obligations to operators that have SMP. Such right may only be applicable if the market is not effectively competitive. However the concept of “effective competition” is extremely subjective and the national regulatory authorities are expected to have serious discretion on this field.
The 2003 EU Regulatory Framework substantially amends the regulation of telecommunications sector in the EU. It repealed 18 regulations and introduced 12 new ones. Turkey based its telecommunications law and regulations on the old regulatory framework. A detailed analysis of the required amendments to the Regulations and Communiqués of the Telecommunications Board should be conducted as soon as possible.