Thailand Law Journal 2009 Spring Issue 1 Volume 12

1980’s could be the first phase of market reform; the industry began to change with the regulatory reform and privatization in order to introduce market competition in some Member States. The EU telecommunications regulations have been seen as parts of the economic integration initiated by the Treaty of Rome and Treaty of Maastricht.²³ It then has been developed through the program of “internal market”²⁴ which is a basis of the EU common regulatory framework for the telecommunications sector.

In order to open up the market, the EU telecommunications saw major considerations of incumbent monopolists and various sector-specific rules. Since the publication of the Telecommunications Green Paper in 1987, the European Commission then introduced two main mechanisms: liberalization and harmonization, in finding for a competitive market. Then “Liberalization Directives”²⁶ and “Harmonizing Directives”²⁵ were adopted to resolve the problems. A series of liberalization was imposed including Terminal equipments (1988), Value added services (1990), Switched data services (1993), Satellite communications (1994), Cable television networks (1995), Mobile communications (1996), and Voice and infrastructure (1998)²⁷, with deferments, however, for certain lesser-developed Member States.²⁸

A series of Harmonizing Directives complemented the liberalization mechanism. The 1990 Framework Directive²⁹ (so called “ONP Directive”) established the principle of “Open Network Provision”³⁰, which identifies the need for a series of Harmonization Directives and Recommendations. Alongside this detailed sector-specific legislation, general European competition law also applies to the telecommunications industry. A concept of Open Network Provision established the need of access to public networks and services according to defined principles of “objectivity”, “transparency” and “non-discrimination”.

In 1995, the Commission's Green Paper on liberalization of infrastructure part II, pointed out the need to adapt the existing ONP Directives to a competitive environment and to develop a further specific Directive on Interconnection. Together with the Licensing Directive³¹ and Data Protection in the Telecommunications Sector Directive,³² these measures make up the so-called “1998 package” of legislation which was established in time for the opening of the EU telecommunications market on January 1, 1998. The Commission had also published Guidelines within the “1998 package” on the application of EC competition law in the telecommunications sector. These guidelines seek to clarify what behavior is likely to be an anticompetitive practice according to the competition rules.³³ This was a primary design for the EU telecommunications transitioning from monopoly to competition.

Due to rapidly developing technologies and convergence, a single, coherent new framework that covers the wider range of “electronic communications”, including broadcasting, has been agreed and applied in 2003. In other words, content services remain outside the scope of the new framework. The new regulatory framework is made up of six specific directives and one decision. With the date of application, the old framework has been repealed with the exception of certain transitional measures, which remain in force until the new institutions, and procedures of the new framework will be ready to replace them. Despite a number of programs in supporting the open competition, there are still a number of provisions addressing the kinds of access and interconnection duties on the powerful operators on which we will subsequently turn to discuss.

The transitioning from sector-specific regulation to general competition has been the dominant policy model of every market including the European Union.³⁴ Although the EU aimed eventually at open its market for full competition, it has adopted a new sector-specific framework to redefine the market definition with a new term of “electronic communications”³⁵ in March 2002, which came into force in July 2003. It should be noted that this is a compromising position during the transitional period. Noticeably, EU Directives have emphasized a necessity of ex ante regulatory obligations³⁶, especially in some circumstances where there is not effective competition, and competition law remedies are not sufficient to address the problem.³⁷ However, the focus of the new framework is to set out those relations and procedures among the EU and Member State’s organizations. Unlike the U.S., the EU approach deals with its own factors focusing mainly on harmonizing the EU single framework and technological neutrality.

The EU’s new regulatory framework has introduced a new system of collaboration among the national regulatory authorities and the Commission. A consistent approach is developed throughout the EU single market with flexibility to deal with national markets and conditions. However, the EU competition rules are not precluded by these sector-specific rules. They are applicable to all undertakings and concerted practices which have as their object or effect the prevention, restriction or distortion of competition within the common market.³⁸ The case of Deutsche Telekom’s margin squeeze³⁹ in 2003 was a ruling example of EU general competition in its telecommunications industries.

23 This is Title XV on “Trans-European networks” of the Treaty establishing the European Community: the important legal basis to European integration in the area of telecommunications.
24 Treaty establishing the European Community, Article 3(1)(c)
25 Commission Directive 90/388/EEC and its amendments (based on Article 86 of the Treaty), repealed later by Commission Directive 2002/77/EC.
26 Directive 90/387/EC, as amended by directive 97/51/EC
27 On 1 January 1998 the market was considered as fully liberalized: competition in public voice telephone services became mandatory across the EU.
28 de Streel, Alexandre., “New EU Regulatory Framework for Electronic Communications”, DG Information Society - Seminario di studio sulla regolamentazione, Capri, 15 Ottobre 2002
29 Directive 90/387/EC, as amended by directive 97/51/EC
30 Directive 90/387/EC, Article 1(3) provided that “Open network provision conditions shall aim at:
-ensuring the availability of a minimum set of services,
- securing access and interconnection to public telecommunications networks and publicly available telecommunications services,
- encouraging the provision of harmonized telecommunications services to the benefit of users, in particular by identifying and promoting by voluntary means harmonized technical interfaces for open and efficient access and interconnection, and associated standards and/or specifications and
- guaranteeing the provision of universal service in telecommunications, taking account of any future evolution, throughout the Community.”
31 Directive 97/13/EC
32 Directive 97/66/EC
33 Treaty establishing European Community, Article 81-82
34 Directive 2002/21/EC, Recital (1)
35 Directive 2002/21/EC, Article 2(c), “electronic communications service” means a service normally provided for remuneration which consists wholly or mainly in the conveyance of signals on electronic communications networks, including telecommunications services and transmission services in networks used for broadcasting, but exclude services providing, or exercising editorial control over, content transmitted using electronic communications networks and services; it does not include information society services, as defined in Article 1 of Directive 98/34/EC, which do not consist wholly or mainly in the conveyance of signals on electronic communications networks;
36 Directive 2002/20/EC, Recital (10), Directive 2002/21/EC, Recital (25)
37 Directive 2002/20/EC, Recital (13), Directive 2002/21/EC, Recital (27)
38 Treaty establishing the European Community, Article 81-89
39 OJL 263 (14 October 2003), Commission Decision of 21 May 2003 relating to a proceeding under Article 82 of the EC Treaty (Case COMP/C-1/37.451, 37.578, 37.579 — Deutsche Telekom AG

This article is published with the kind permission of Piyabutr Bunaramrueang, Professor of Law at the School of Law, University of the Thai Chamber of Commerce. This article was presented at the 2007 ALIN International Academic Conference at Chulalongkorn University. Except where otherwise noted, content on this site is licensed under a Creative Commons Attribution 3.0 License, <http://cc.in.th/wiki/by_f>