EC Electronic Communications and Competition Law by Mira Burri

EC Electronic Communicationsand

Competition Law

Inaugural dissertation for the attainment of the title Doctor iuris of the Facultyof Law of the University of Berne. The Faculty accepted the present work as adissertation on 7 September 2006 by motion of the two reviewers, Prof. Dr.Thomas Cottier and Prof. Dr. Christoph Beat Graber, without taking a positionon the concepts formulated therein.

EC Electronic Communicationsand

Competition Law

Mira Burri Nenova

I N T E R N A T I O N A L L A W & P O L I C Y

CAMERONMAY

Copyright Cameron May

Published 2007 by Cameron May Ltd17 Queen Annes Gate, London SW1H 9BUTel: +44 (0)20 7799 3636 Fax: +44 (0)20 7222 8517email: [email protected]: http://www.cameronmay.com

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ISBN 10: 1 905017 48 0ISBN 13: 978 1 905017 48 5

Printed in the United Kingdom TJ International

TABLE OF CONTENTS

Abbreviations and Acronyms

Table of Cases

Table of Legislation

Prologue

Introduction

PART 1: ELECTRONIC COMMUNICATIONS AS A DISTINCT ANDUNIQUE OBJECT OF REGULATION

Chapter 1: The Object of Regulation

1. Introduction2. Brief Historical Remarks3. The Metamorphosis of (Tele)communications4. Intrinsic Characteristics of the Communications Sector

4.1 Network Industries4.1.1 Positive Network Effects4.1.2 Economic Implications of Positive Network Effects4.1.3 Negative Network Effects4.1.4 Communications as a Network Industry4.1.5 Communications as a Specific Network Industry4.2 Dynamism4.3 Convergence4.4 Sensitive to Regulation, Sensitive to Societys

Reactions4.5 Special Significance and Role4.6 Communications as Part of the New Economy

5. Chapter 1: Conclusion

Chapter 2: The Goals and Objectives of CommunicationsRegulation

1. Introduction2. Economic Objectives

2.1 Consumer Welfare

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2.2 The Internal Market2.3 Innovation2.3.1 Standards2.3.2 Intellectual Property Rights: Some Brief Remarks2.3.3 Facility-based or Service-based Competition?2.4 Interim Conclusion on the Economic Goals

3. Societal Objectives3.1 Introduction3.2 Universal Service3.2.1 The Roots of Universal Service Policies3.2.2 The EC Universal Service Regime

a. Before the 2002 Regulatory Packageb. The 2002 Universal Service Regimec. The Universal Service Directived. Interim Conclusion on Universal Service

3.3 Consumer Protection3.4 On a Higher Level3.5 The eEuropean Goals


PART 2: THE INSTRUMENTS OF COMMUNICATIONS REGULATION

Chapter 3: Typology of the Regulatory Tools

1. Introduction2. The Communications Regulation Toolkit

2.1 Competition Law2.2 Sector Specific Regulation2.3 Comparison of the Regulatory Tools2.3.1 General and Abstract versus Tailored Rules2.3.2 Reactive versus Pro-active Nature2.3.3 To Protect versus to Promote or Restrict Competition2.3.4 One-off Interventions versus Long-term Perspective2.3.5 Narrowly Focused Objectives versus Broad Range

of Objectives2.3.6 Limited Instruments versus Broad Range of

Instruments2.3.7 Antitrust Expertise versus Communications Industry

Expertise3. Chapter 3: Conclusion

Chapter 4: European Community Communications Law

1. Introduction2. European Community Competition Law

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2.1 Article 82 EC2.2 Constituent Elements of Article 82 EC2.2.1 Dominance

a. Market Definitioni. Demand Substitutabilityii. Supply Substitutabilityiii. Potential Competitioniv. The Geographical Market

b. Relevant Communications Marketsc. Market Analysis

i. Market Sharesii. Barriers to Entryiii. Conduct and Performance

2.2.2 A Position of Dominance within the CommonMarket or in a Substantial Part of It

2.3 Abuse: Types of Abusive Practices2.3.1 Refusal to Supply2.3.2 The Essential Facilities Doctrine

a. The Concept of Essential Facilities and the ECLegal Doctrine

b. Observations on the EFD and Its Application2.3.3. Tying

a. The Concept of Tying in EC lawb. Observations on Tying as an Abuse

2.4. Conclusion on EC Competition Rules3. European Community Communications Specific

Legislation3.1 The Liberalisation of the European Community

Communications Markets3.1.1 The Liberalisation Package

a. The Telecommunications TerminalEquipment Directive and theTelecommunications Services Directive

b. The Use of Article 86(3) of the EC Treatyc. Further Liberalisation Measures

3.1.2 The Open Network Provision Framework3.1.3 Relationship between EC Competition Law and the

Sectoral Rules3.1.4 Key Regulatory Decisions of the 1998 European

Telecommunications Package3.2 The 2002 Electronic Communications Framework3.2.1 Design of the 2002 Regulatory Framework

a. Hard Law Instrumentsb. Soft Law Instruments

3.2.2 Scope of the Electronic Communications Regime

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3.2.3 Key Elements of the 2002 Communications Regime3.2.4 The New Significant Market Power Regime

a. Introduction to the SMP Regimeb. Market Definition

i. Market Selectionii. Interim Observations on Market

Selectioniii. Product and Geographical Market

Definitioniv. Interim Conclusion on Market

Definitionc. Market Analysis

i. Standard Antitrust Analysisii. Idiosyncrasies of the Communications

Specific Market Analysisiii. Interim Conclusion on Market Analysis

d. Remediesi. Obligations Regarding Wholesale

Marketsii. Choice of Remediesiii. Interim Observations on Wholesale

Markets Remediesiv. Obligations Imposed on Retail Marketsv. Exceptions

e. A Brief Comparison of the 2002 Sector SpecificRegulation and Generic Competition Rules

3.2.5 Conclusion on the SMP Regime4. Chapter 4: Conclusion

Chapter 5: The WTO Regime for TelecommunicationsServices

1. Introduction2. The World Trade Organization

2.1 General Agreement on Trade in Services2.2 The Annex on Telecommunications2.2.1 Scope of the Annex on Telecommunications2.2.2 Contents of the Annex on Telecommunications2.2.3 Interim Observations on the Annex on

Telecommunications2.3 The Fourth Protocol2.3.1 The Reference Paper2.3.2 Scope of the Reference Paper2.3.3 Contents of the Reference Paper

a. Definitions

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b. Section 1c. Section 2d. Other Provisions

2.3.4 Interim Observations on the Reference Paper3. The WTO Law on Telecommunications and the EC

Telecommunications Law3.1 Effect(s) of the WTO Law onto the EC Legal Order3.2 Specific Commitments of the European

Communities and Their Member States3.3 WTO Telecommunications Rules vis--vis EC

Telecommunications Rules3.3.1 Harmony3.3.2 Discord

a. Basic versus Value-added Telecommu-nications Services

b. Telecommunications versus AudiovisualServices

c. Technological Neutralityd. Solutions?e. Lack of Global Competition Rules


PART 3: CAN COMPETITION LAW DO IT ALL? THE FINAL ASSESSMENT

1. Step 1: Competition Law versus the IntrinsicCharacteristics of Electronic Communications1.1 Network Effects1.2 Dynamism1.3 ConvergenceStep 1: Conclusion

2. Step 2: Competition Law versus the Goals and Objectivesof Communications Regulation2.1 Economic Goals and Objectives2.1.1 Consumer Welfare2.1.2 Innovation2.2 Societal Goals and ObjectivesStep 2: Conclusion

3. Step 3: Endangering the Authority and Integrity ofCompetition Law:

4. Yes or No? The Answer5. Some Speculations on the Future

EpilogueBibliographyAbout the Author

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ABBREVIATIONS AND ACRONYMS

AB Appellate BodyAG Advocate GeneralAPI Application Programme InterfaceBNetzA Bundesnetzagentur fr Elektrizitt, Gas,

Telekommunikation, Post und Eisenbahnen / FederalNetwork Agency for Electricity, Gas,Telecommunications, Postal and Railway Markets,Germany

CEN European Committee for StandardisationCENELEC European Committee for Electrotechnical

StandardisationCEPS Centre for European Policy StudiesCEPT European Conference of Postal and

Telecommunications AdministrationsCFI Court of First InstanceCMLR Common Market Law ReportsDG Directorate General (of the European Commission)DRM Digital Rights ManagementDSB Dispute Settlement BodyDSU Understanding on Rules and Procedures Governing

the Settlement of DisputesDVD Digital Versatile DiscEC European Community / European CommunitiesECJ Court of Justice of the European CommunitiesECR European Court ReportsEDI Electronic Data InterexchangeEEA European Economic AreaEEC European Economic CommunityEFD Essential Facilities DoctrineEPG Electronic Programme GuideERG European Regulators Group for Electronic

Communications Networks and ServicesETSI European Telecommunications Standards InstituteFCC Federal Communications CommissionGATS General Agreement on Trade in ServicesGATT General Agreement on Tariffs and TradeGBT Group on Basic TelecommunicationsGDP Gross Domestic ProductGSM Global System for Mobile Communications

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IC integrated circuitICT Information and Communication TechnologyIEC International Electrotechnical OrganisationILM International Legal MaterialsIPRs Intellectual Property RightsISO International Organisation for StandardisationIT Information TechnologyITU International Telecommunication UnionMFN Most-Favoured-NationNCA National Competition AuthorityNGBT Negotiating Group on Basic TelecommunicationsNRA National Regulatory AuthorityOECD Organization for Economic Co-operation and

DevelopmentOJ Official Journal of the European Communities /

European UnionONP Open Network ProvisionPTO Public Telecommunications OperatorPTT Post, Telegraph and TelephoneR & D Research and DevelopmentRegTP Regulierungsbehrde fr Telekommunikation und

Post / the German telecommunications and postregulator

SMP Significant Market PowerSMS Short Message ServiceSSNIP Small but Significant Non-Transitory Increase in

PriceTELRIC Total Element Long-Run Incremental CostTO Telecommunications OperatorTRIMs Agreement on Trade-Related Investment MeasuresTRIPs Agreement on Trade-Related Aspects of Intellectual

Property RightsUDHR Universal Declaration of Human RightsUN United NationsUNCTAD United Nations Conference on Trade and

DevelopmentUNESCO United Nations Educational, Scientific and Cultural

OrganizationUSO Universal Service ObligationUSTR United States Trade RepresentativeWIPO World Intellectual Property OrganizationWMP Windows Media PlayerWSIS World Summit on the Information SocietyWTO World Trade Organization

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TABLE OF CASES

COURT OF JUSTICE OF THE EUROPEAN COMMUNITIES(Numerical Order)

Case 26/62 Van Gend en Loos v. Nederlanse Administratie der Belastingen[1963] ECR 1.Case 6/64 Costa v. ENEL [1964] ECR 585, [1964] CMLR 425.Cases 56 and 58/64 Consten and Grundig v. Commission [1966] ECR 299,[1966] CMLR 418.Case 56/65 Socit Technique Minire v. Maschinenbau Ulm GmbH [1966]ECR 235, [1966] CMLR 357.Case 14/68 Walt Wilhelm v. Bundeskartellamt [1969] ECR 1, [1969] CMLR100.Case 5/69 Vlk v. Vervaecke [1969] ECR 295, [1969] CMLR 273.Case 6/72 Europemballage Corporation and Continental Can v. Commission[1973] ECR 215, [1973] CMLR 1999.Cases 21-24/72 International Fruit Company NV v. Produktshap voor groentenen fruit [1972] ECR 1219, [1975] 2 CMLR 1.Cases 6 and 7/73 Istituto Chemioterapico Italiano SpA and CommercialSolvents Corp v. Commission [1974] ECR 223, [1974] I CMLR 309.Case 155/73 Sacchi [1974] ECR 409, [1974] 2 CMLR 177.Case 41/74 Van Duyn v. Home Office [1974] ECR 1337.Case 43/75 Defrenne v. Sabena (II) [1976] ECR 455.Case 27/76 United Brands Company and United Brands Continental v.Commission [1978] ECR 207, [1978] 1 CMLR 429.Case 26/76 Metro SB-Grossmrkte GmbH and Co KG v. Commission (MetroI) [1977] ECR 1875.Case 85/76 Hoffmann-La Roche and Co AG v. Commission [1979] ECR 461,[1979] 3 CMLR 211.Case 22/78 Hugin Kassaregister AB v. Commission [1979] ECR 1869, [1979]3 CMLR 345.Case 31/80 LOral [1980] ECR 3775, [1981] 2 CMLR 235.Case 172/80 Zchner v. Bayerische Vereinsbank AG [1981] ECR 2021, [1982]1 CMLR 313.Case 15/81 Gaston Schul Douane-Expediteur BV v. Inspecteur derInvoerrechten en Accijnzen [1982] ECR 1409.Case 322/81 Nedelansche Baden-Industrie Michelin NV v. Commission [1983]ECR 3461, [1985] 1 CMLR 282.Case 7/82 GVL v. Commission [1983] ECR 483, [1983] 3 CMLR 645.Cases 240/82 etc. Stichting Sigarettenindustrie [1985] ECR 3831.

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EC Electronic Communications and Competition Law

Case 319/82 Socit de Vente de Ciments et Btons de lEst SA v. Kerpen andKerpen [1983] ECR 4173, [1985] 1 CMLR 511.Case 41/83 Italy v. Commission (British Telecommunications) [1985] ECR873, [1985] 2 CMLR 368.Case 170/83 Hydrotherm Gertebau GmbH v. Compact del Dott Ing MarioAndreoli and C Sas [1984] ECR 2999, [1985] 3 CMLR 224.Case 226/84 British Leyland v. Commission [1986] ECR 3263, [1987] 1 CMLR184.Case 311/84 Centre Belge dEtudes de March Tlmarketing (CBEM) v. CLT[1985] ECR 3261, [1986] 2 CMLR 558.Case 12/86 Meryem Demirel v. Stadt Schwbisch Gmnd [1987] ECR 3719,[1989] 1 CMLR 421.Case C-62/86 Akzo Chemie BV v. Commission [1991] ECR I-3359, [1993] 5CMLR 215.Case 66/86 Ahmed Saeed Flugreisen v. Zentrale zur Bekampfung UnlauterenWettbewerbs [1989] ECR 803, [1990] 4 CMLR 102.Case 247/86 Alsatel v. Novasam [1988] ECR 5987, [1990] 4 CMLR 434.Case 70/87 Fdration de lindustrie de lhuilerie de la CEE (Fediol) v.Commission [1989] ECR 1781.Case C-202/88 France v. Commission (Terminal Equipment) [1991] ECR 1223,[1992] 5 CMLR 552.Case C-322/88 Grimaldi v. Fonds des maladies professionnelles [1989] ECRI-4407, [1991] 2 CMLR 265.Case C-69/89 Nakajima All Precision Co Ltd v. Council [1991] ECR I-2069.Case C-213/89 R v. Secretary of State for Transport (Factortame II) [1991] 1AC 603, [1990] 3 CMLR 1.Case C-221/89 R v. Secretary of State for Transport (Factortame III) [1991]ECR I-3905, [1991] 3 CMLR 589.Case C-41/90 Hfner & Elser v. Macrotron GmbH [1991] ECR I-1979, [1993]4 CMLR 306.Case C-179/90 Merci Convenzionali Porto di Genova v. Siderurgica Gabriella[1991] ECR I-5889, [1994] 4 CMLR 422.Cases C-271/90, 281/90 and C-289/90 Spain and others v. Commission(Telecommunications Services) [1992] ECR 5833, [1993] 4 CMLR 100.Cases C-241/91 P and C-242/91 P RTE and ITP v. Commission (Magill)[1995] ECR I-743.Case C-53/92 P Hilti AG v. Commission [1994] ECR I-667, [1994] 4 CMLR614.Case C-250/92 Gttrup-Klim v. Dansk Landbrugs Grovvareselskab AmbA[1994] ECR I-5641, [1996] 4 CMLR 191.Case C-393/92 Gemeente Almelo [1994] ECR I-1477.Case C-18/93 Corsica Ferries Italia Srl v. Corpo dei piloti del porto di Genova[1994] ECR I-1783.Case C-280/93 Germany v. Council [1994] ECR I-4973.

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Table of Cases

Case C-61/94 Commission v. Germany (International Dairy Agreement)[1996] ECR I-3989.Case C-333/94 P Tetra Pak International v. Commission [1996] ECR I-5951,[1997] 4 CMLR 662.Case C-242/95 GT-Link v. DSB [1997] ECR I-4449, [1997] 5 CMLR 601.Case C-53/96 Herms International v. FHT Marketing Choice BV [1998] ECRI-3603.Case C-55/96 Job Centre (No 2) [1997] ECR I-7119, [1998] 4 CMLR 708.Case C-146/96 Portugal v. Council [1999] ECR I-8395.Case C-162/96 Racke GmbH & Co. v. Hauptzollamt Mainz [1998] ECR I-3655.Cases C-395/96 P and C-395/97 P Compagnie Maritime Belge Transport SAand Dafra-Lines v. Commission [2000] ECR I-1365, [2000] 4 CMLR 1076.Case C-7/97 Oscar Bronner GmbH & Co KG v. Mediaprint Zeitungs- undZeitschriftenverlag GmbH & Co KG etc. [1998] ECR I-7791, [1999] 4 CMLR112.Case C-209/98 Enteprenrforeningens Affalds/Miljsektion (FFAD) v.Kbenhavns Kommune [2000] ECR I-3743.Case C-344/98 Masterfoods [2000] ECR I-11369.Cases C-390/98 and 392/98 Parfums Christian Dior SA v. TUK ConsultancyBV and Asco Gerste and Rob Van Dijk v. Wilhelm GmbH & Co. KG andLayher BV [2000] ECR I-11304.Case C-340/99 TNT Traco SpA v. Poste Italiane SpA [2001] ECR I-4109.Case C-390/99 Canal Satlite Digital SL v. Administracin General del Estado,and Distribuidora de Televisin Digital SA (DTS) [2002] ECR I-607.Case C-475/99 Ambulanz Glckner v. Landkreis Sdwestpfalz [2001] ECR I-8089, [2002] 4 CMLR 726.Case C-53/00 Ferring SA v. Agence centrale des organismes de scurit sociale(ACOSS) [2001] ECR I-9067.Case C-76/00 P Petrotub SA and Republica SA v. Council [2003] ECR 79.Case C-280/00 Altmark Trans GmbH v. Nahverkehrsgesellschaft AltmarkGmbH [2003] 3 CMLR 12.Case C-481/01 IMS Health GmbH & Co v. NDC Health GmbH & Co KG[2004] 4 CMLR 1543.Case C-93/02 P Biret International SA v. Council, judgment of the Court of30 September 2003, nyr.Case C-94/02 P Biret International SA v. Council, judgment of the Court of30 September 2003, nyr.Case C-377/02 Lon Van Parijs v. Belgisch Interventie- en Restitutie Bureau,judgment of 1 March 2005, nyr.

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COURT OF FIRST INSTANCE(Numerical Order)

Case T-30/89 Hilti AG v. Commission [1991] ECR II-1439, [1992] 4 CMLR16.Case T-69/89 Radio Telefis Eireann (RTE) v. Commission v. Commission [1991]ECR II-485, [1991] 4 CMLR 586.Case T-70/89 BBC Enterprises Ltd v. Commission [1991] ECR II-535, [1991]4 CMLR 669.Case T-76/89 Independent Television Publications (ITP) v. Commission [1991]ECR II-575, [1991] 4 CMLR 745.Case T-30/91 Solvay SA v. Commission [1995] ECR II-1775, [1996] 5 CMLR57.Case T-83/91 Tetra Pak v. Commission (Tetra Pak II) [1994] ECR II-755, [1997]4 CMLR 726.Case T-504/93 Tierc Ladbroke v. Commission [1997] ECR II-923, [1997] 5CMLR 309.Case T-229/94 Deutsche Bahn v. Commission [1997] ECR II-1689, [1998] 4CMLR 220.Cases T-374, T-375, T-384 and T-388/94 European Night Services Ltd v.Commission [1998] ECR II-3141, [1998] 5 CMLR 718.Cases T-25/95 etc. Cimenteries CBR [2000] ECR II-491.Case T-86/95 Compagnie Generale Maritime [2002] ECR II-1011.C-359/95 and C-379/95 P Commission and France v. Ladbroke Racing [1997]ECR I-6225.Case T-41/96 Bayer v. Commission [2000] ECR II 3383, [2001] 4 CMLR 126.Case T-65/96 Kish Glass v. Commission [2000] ECR II-1885, [2000] 5 CMLR229.Cases T-125/97 and T-127/97 The Coca-Cola Company and Others v.Commission [2000] ECR II-1733, [2000] 5 CMLR 467.Case T-228/97 Irish Sugar plc v. Commission [1999] ECR II-2969, [1999] 5CMLR 1300.Case T-175/99 UPS Europe SA v. Commission [2000] ECR II-1915, [2002] 5CMLR 67.Case T-219/99 British Airways plc v. Commission [2004] All ER 1115, [2004]4 CMLR 19.Case T-513/93 Consiglio Nazionale degli Spedizionieri Doganali v. Commission[2000] II-1807.

EUROPEAN COMMISSION DECISIONS(Alphabetical Order)

ACEA/Telefnica (Case No COMP/M.1650), OJ C 321/4, 9 November 1999.Albacom/BT/ENI (Case No IV/M.975), OJ [1997] L 369/8, [1998] 4 CMLR14.

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Table of Cases

Atlas (Case No IV/35.337), OJ L 239/23, 19 September 1996.BBI/Boosey & Hawkes (87/500) OJ [1987] L 286/36, [1988] 4 CMLR 67.Bertelsmann/Kirch/Premiere (Case IV/M.993), OJ [1999] L 53/1.Blackstone/CDPQ/Kabel Nordrhein/Westfalen (Case No COMP/JV.46), OJC 262/5, 13 September 2000.British Interactive Broadcasting, OJ [1999] L 312/1 [2000] 4 CMLR 901.British Telecom, OJ [1987] L 360/36, [1987] 1 CMLR 457.British Telecommunications/MCI (I), (Case IV/34.857), OJ L 223, 27 August1994.British Telecommunications/MCI (II) (Case No IV/M.856), OJ L 336, 8December 1997.BT/AT&T (Case No IV/JV.15), Commission Decision of 30 March 1999.BT/Esat (Case No COMP/M.1838), Commission Decision of 16 March2001.Continental Can Co Inc. OJ [1972] L 7/25, [1972] CMLR D11.Decca Navigator System, OJ [1987] L 43/27, [1990] 4 CMLR 627.Deutsche Post, OJ [2001] L 125/27, [2001] 5 CMLR 99.Deutsche Telekom AG (Commission Decision 2003/707/EC of 21 May 2003relating to a proceeding under Article 82 of the EC Treaty, Case COMP/C-1/37.451, 35.578, 37.579), OJ L 263/9, 14 October 2003.ECS/AKZO, OJ [1985] L 374/1, [1986] 3 CMLR 273.Eurofix-Bauco v. Hilti, OJ [1988] L 65/19, [1989] 4 CMLR 677.Flughafen Frankfurt am Main AG, OJ [1998] L 72/30, [1998] 4 CMLR 779.Football World Cup 1998, OJ [2000] L 5/55, [2000] 4 CMLR 963.France Telecom/Equant (Case No COMP/M.2257), OJ C 187/8, 3 July 2001.France Telecom/Orange (Case No COMP/M.2016), OJ C 261/6, 12September 2000.Iridium (Case IV/350518), OJ L 16, 18 January 1997.London European-Sabena (88/589), OJ [1998] L 317/47, [1989] 4 CMLR 662.Magill TV Guide/ITP, BBC, RTE (89/205), OJ [1989] L 78/43, [1989] 4 CMLR757.Mannesmann/Bell Atlantic/Omnitel (Case No COMP/JV.17), OJ C 11/4, 14January 2000.Mannesmann/Olivetti/Infostrada (Case No IV/M.1025), [1998] 4 CMLR 407.MCI WorldCom/Sprint (Case No COMP/M.1741), OJ L 300/1, 18November 2003.Microsoft, (Case COMP/C-3/37.792) C(2004) 900 final.Napier Brown-British Sugar, OJ [1988] L 284/41, [1990] 4 CMLR 196.Phoenix/Global/One (Case No IV/35617), OJ L 239/57, 19 September 1996.Pirelli/Edizione/Olivetti/Telecom Italia (Case No COMP/M.2574), OJ C 325/12, 21 November 2001.Port of Rdby, OJ [1994] L 55/52, [1994] 5 CMLR 457.Porto di Genova, OJ [1997] L 301/27.RTL/Veronica/Endemol (Case No IV/M.553), OJ L [1996] 134/21.

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Sea Containers v. Stena Sealink Interim Measures, OJ [1994] L 15/8, [1995]4 CMLR 84.SEAT Pagine Gialle/ENIRO (Case No IV/M.2468), OJ C 198/9, 13 July 2001.Soda-Ash ICI, OJ 1991 L 152/40, [1994] 4 CMLR 645.Soda-Ash Solvay, OJ 1991 L 152/51, [1994] 4 CMLR 454.TDC/CMG/Migway JV (Case No COMP/2598), OJ C 16/16, 19 January2002.Telefnica Portugal Telecom/Mdi Telecom (Case No COMP/JV.23), OJ 22/11, 26 January 2000.Telekom/BetaResearch (Case IV/M.1027), OJ [1999] L 53/31.Telia/Sonera (Case No COMP/M. 2803), Commission Decision of 10 July2002.Telia/Telenor (Case No IV/M.1439), OJ L 40/1, 9 February 2001.Tetra Pak II, OJ 1992 L 72/1, [1992] 4 CMLR 551.VIAG Interkom/Telenor Media (Case No COMP/M.1957), CommissionDecision of 14 June 2000.Virgin/British Airways, OJ [2000] L 30/1, [2000] 4 CMLR 999.Vodafone Airtouch/Mannesmann (Case No COMP/M.1975), OJ C 141/19,19 May 2000.Vodafone/Airtel (Case COMP/M.1863), Commission Decision of 26 June2001.Vodafone/Airtouch (Case No IV/M.1430), OJ C 295/2, 15 October 1999.WorldCom/MCI (Case IV/M.1069), OJ L 116/1, 4 May 1999.Zoja/CSC-ICI, OJ [1972] L 299/51, [1973] CMLR D50.

ARTICLE 7 COMMISSION DECISIONS(Numerical Order)

Commission Decision of 20 February 2004 pursuant to Article 7(4) ofDirective 2002/21/EC (Withdrawal of a notified draft measure), CaseFI/2003/0024 and FI/2003/27: Publicly available international telephoneservices provided at a fixed location for residential and non-residentialcustomers, C(2004) 527 final, 20 February 2004.Commission Decision of 5 October 2004 pursuant to Article 7(4) ofDirective 2002/21/EC (Withdrawal of a notified draft measure), CaseFI/2004/0082: Access and call origination on public mobile telephonenetworks in Finland, C(2004) 3682 final, 5 October 2004.Commission Decision of 20 October 2004 pursuant to Article 7(4) ofDirective 2002/21/EC (Withdrawal of a notified draft measure), CaseAT/2004/0090: Transit services in the fixed public telephone network inAustria, C(2004) 4070 final, 20 October 2004.Commission Decision of 17 May 2005 pursuant to Article 7(4) of Directive2002/21/EC (Withdrawal of notified draft measures), Case DE/2005/

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Table of Cases

0144: Call termination on individual public telephone networks providedat a fixed location, C(2005) 1442 final, 17 May 2005.

EUROPEAN COURT OF HUMAN RIGHTS

Informationsverein Lentia and Others v. Austria, 24 November 1993,Application No 13914/88 and 15041/89, 17 EHRR 93.

WTO PANEL REPORTS

United States Sections 301-310 of the Trade Act of 1974, WT/DS152/R, 22December 1999.Mexico Measures Affecting Telecommunications Services, WT/DS204/R, 2April 2004.United States Measures Affecting the Cross-Border Supply of Gambling andBetting Services, WT/S285/R, 10 November 2004.

WTO APPELLATE BODY REPORTS

United States Measure Affecting Import of Woven Wool Shirts and Blousesfrom India, WT/DS333/AB/R, 23 May 1997.European Communities Regime for the Importation, Sale and Distributionof Bananas, WT/DS27/AB/R, 9 September 1997.Canada Certain Measures Affecting the Automotive Industry, WT/DS/139/AB/R, WT/DS142/AB/R, 31 May 2000.Brazil Export Financing Programme for Aircraft (Recourse by Canada toArticle 21.5 of the DSU), WT/DS46/AB/RW, 21 July 2000.United States Measures Affecting the Cross-Border Supply of Gambling andBetting Services, WT/DS285/AB/R, 7 April 2005.

NATIONAL CASES(Numerical Order)

UNITED STATESMunn v. Illinois, 94 US 113 (1877).United States v. Terminal Railroad Association, 224 US 383 (1912).Eastman Kodak Co v. Southern Photo Materials Co, 273 US 359 (1927).Lorain Journal Co v. United States, 342 US 143 (1951).United States v. El du Ponte de Nemours and Co, 351 US 377 (1956).Otter Tail Power Co v. United States, 410 US 366 (1973).

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MCI Communications Corp. v. AT&T, 708 F.2d 1081, 1132-33 (7th Cir. 1983).Aspen Skiing Co v. Aspen Highlands Skiing Corp, 472 US 585 (1985).Matsushita Elec. Industrial Co v. Zenith Radio Corp, 475 US 574 (1986).Eastman Kodak Co v. Image Technical Services Inc., 504 US 451 (1992).Spectrum Sports v. McQuillan, 506 US 447 (1993).Comp. Tel. Assoc. v. FCC, 117 F.3d 1068 (8th Cir. 1997).Iowa Utilities Bd. v. FCC, 120 F.3d 753 (8th Cir. 1997).AT&T v. Iowa Utils. Bd., 525 US 366 (1999).Iowa Utils. Bd. v. FCC, 219 F.3d 744 (8th Cir. 2000) (Iowa Utilities II).US v. Microsoft Corp, 87 F.Supp.2d 30 (D.D.C. 2000).US v. Microsoft Corp, 253 F.3d 34 (D.C. Cir. 2001).Verizon Communications Inc v. FCC, 535 US 467 (2002).Verizon Communications Inc v. Law Offices of Curtis V. Trinko, LLP, 540 US682 (2004).

NEW ZEALAND

Telecom Corporation of New Zealand Ltd v. Clear Communications Ltd [1995]1 NZLR 385.

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TABLE OF LEGISLATION

(Chronological/Numerical Order)

TREATIES

Treaty on European Union (consolidated version), OJ C 325/5, 24September 2002.Treaty establishing the European Community (consolidated version),OJ C 325/33, 24 December 2002.

REGULATIONS

Council Regulation 17 of 6 February 1962, First Regulation implementingArticles 85 and 86 of the Treaty, OJ 13/204, 21 February 1962.Council Regulation (EEC) 4064/89 of 21 December 1989 on the controlof concentrations between undertakings, OJ L 395/1, 30 December 1989.Regulation (EC) 1310/97 of 30 June 1997 amending Regulation (EEC)4064/89 on the control of concentrations between undertakings, OJ L180/1, 9 July 1997.Regulation 2887/2000/EC of the European Parliament and of the Councilof 18 December 2000 on unbundled access to the local loop, OJ L 336/4,30 December 2000.Council Regulation (EC) 1/2003 of 16 December 2002 on theimplementation of the rules on competition laid down in Articles 81and 82 of the Treaty, OJ L 1/1, 4 January 2003.Council Regulation (EC) 139/2004 of 20 January 2004 on the control ofconcentrations between undertakings, OJ L 24/1, 29 January 2004.

DIRECTIVES

Commission Directive 80/723/EEC of 25 June 1980 on the transparencyof financial relations between Member States and public undertakings,OJ L 195/35, 29 August 1980.Council Directive 87/372/EEC of 25 June 1987 on the frequency bandsdesigned for the co-ordinated introduction of public pan-Europeancellular digital land-based mobile communications in the EuropeanCommunity, OJ L 196/85, 17 July 1987.Council Directive 90/387/EEC of 28 June 1990 on the establishment ofthe internal market for telecommunications services through theimplementation of open network provision, OJ L 192/1, 24 July 1990.

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Commission Directive 88/301/EEC of 16 May 1988 on competition inthe markets for telecommunications terminal equipment, OJ L 131/73,27 May 1988.Council Directive 89/552/EEC of 3 October 1989 on the coordination ofcertain provisions laid down by law, regulation or administrative actionin Member States concerning the pursuit of television broadcastingactivities, OJ L 298/23, 17 October 1989.Commission Directive 90/388/EEC of 28 June 1990 on competition inthe markets for telecommunications services, OJ L 192/10, 24 July 1990.Council Directive 90/544/EC of 9 October 1990 on the frequency bandsdesigned for the co-ordinated introduction of pan-European land-basedpublic radio paging in the Community (ERMES), OJ L 310/28, 9November 1990.Council Directive 91/250/EEC of 14 May 1991 on the legal protection ofcomputer programmes, OJ L 122/42, 17 May 1991.Council Directive 91/287/EC of 3 June 1991 on the frequency banddesigned for the co-ordinated introduction of digital European cordlesscommunication (DECT) into the Community, OJ L 144/45, 8 June 1991.Council Directive 92/44/EEC on the application of open networkprovision to leased lines, OJ L 165/27, 19 June 1992.Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumercontracts, OJ L 95/29, 21 April 1993.Council Directive 93/98/EEC of 29 October 1993 harmonising the termof protection of copyright and certain related rights, OJ L 290/9, 24November 1993.Commission Directive 94/46/EEC amending Directive 90/388 andDirective 88/301 in particular with regard to satellite communications,OJ L 268/15, 19 January 1994.Commission Directive 95/51/EC amending Directive 90/388/EEC withregard to the abolition of the restrictions on the use of cable televisionnetworks for the provision of already liberalised telecommunicationsservices, OJ L 256/49, 26 October 1995.Directive 95/46/EC of the European Parliament and of the Council of 24October 1995 on the protection of individuals with regard to theprocessing of personal data and on the free movement of such data, OJL 281/31, 23 November 1995.Directive 95/47/EC of the European Parliament and of the Council of 24October 1995 on the use of standards for the transmission of televisionsignals, OJ L 281/51, 23 November 1995.Commission Directive 96/2/EC amending Directive 90/388/EEC withregard to mobile and personal communications, OJ L 20/59, 26 January1996.Commission Directive 96/19/EC of 13 March 1996 amending Directive90/388/EEC with regard to the implementation of full competition intelecommunications markets, OJ L 74/13, 22 March 1996.

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Directive 96/9/EC of the European Parliament and of the Council of 11March 1996 on the legal protection of databases, OJ L 77/20, 27 March1996.Directive 97/13/EC of the European Parliament and of the Council of 10April 1997 on a common framework for authorisations and individuallicences in the field of telecommunications services, OJ L 117/15, 7 May1997.Directive 97/7/EC of the European Parliament and of the Council of 20May 1997 on the protection of consumers in respect of distance contracts,OJ L 144/19, 4 June 1997.Directive 97/33/EC of the European Parliament and of the Council of 30June 1997 on interconnection in telecommunications with regard toensuring universal service and interoperability through application ofthe principles of the Open Network Provision (ONP), OJ L 199/32, 26July 1997.Directive 97/36/EC of the European Parliament and of the Council of 30June 1997 amending Council Directive 89/552/EEC on the coordinationof certain provisions laid down by law, regulation or administrativeaction in Member States concerning the pursuit of television broadcastingactivities, OJ L 202/60, 30 July 1997.Directive 97/51/EC of the European Parliament and of the Council of 6October 1997 amending Council Directives 90/387/EEC and 92/44/EECfor the purpose of adaptation to a competitive environment intelecommunications, OJ L 295/23, 29 October 1997.Directive 97/66/EC of the European Parliament and of the Council of 15December 1997 concerning the processing of personal data andprotection of privacy in the telecommunications sector, OJ L 24/1, 30January 1998.Directive 98/10/EC of the European Parliament and of the Council of 26February 1998 on the application of open network provision (ONP) tovoice telephony and on universal service for telecommunications in acompetitive environment, OJ L 101/24, 1 April 1998.Directive 98/34/EC of the European Parliament and of the Council of 22June 1998 laying down a procedure for the provision of information inthe field of technical standards and regulations, OJ L 204/37, 21 July1998.Directive 98/48/EC of the European Parliament and of the Council of 20July 1998 amending Directive 98/34/EC laying down a procedure forthe provision of information in the field of technical standards andregulations, OJ L 217/18, 5 August 1998.Directive 99/5/EC of the European Parliament and of the Council of 9March 1999 on radio equipment and telecommunications terminalequipment and the mutual recognition of their conformity, OJ L 91/10,7 April 1999.

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Commission Directive 99/64/EC amending Directive 90/388 in order toensure that telecommunications networks and cable TV networks ownedby a single operator are separate legal entities, OJ L 175/39, 10 July 1999.Directive 2001/29/EC of the European Parliament and of the Council of22 May 2001 on the harmonisation of certain aspects of copyright andrelated rights in the information society, OJ L 167/10, 22 June 2001.Directive 2002/19/EC of the European Parliament and of the Council of7 March 2002 on access to, and interconnection of, electroniccommunications networks and associated facilities (Access Directive),OJ L 108/7, 24 April 2002.Directive 2002/20/EC of the European Parliament and of the Council of7 March 2002 on the authorisation of electronic communicationsnetworks and services (Authorisation Directive), OJ L 108/21, 24 April2002.Directive 2002/21/EC of the European Parliament and of the Council of7 March 2002 on a common regulatory framework for electroniccommunications networks and services (Framework Directive), OJ L 108/33, 24 April 2002.Directive 2002/22/EC of the European Parliament and of the Council of7 March 2002 on universal service and users rights relating to electroniccommunications networks and services (Universal Service Directive),OJ L 108/51, 24 April 2002.Directive 2002/58/EC of the European Parliament and of the Council of12 July 2002 concerning the processing of personal data and theprotection of privacy in the electronic communications sector (Directiveon privacy and electronic communications), OJ L 201/37, 31 July 2002.Commission Directive 2002/77/EC of 16 September 2002 on competitionin the markets for electronic communications networks and services, OJL 249/21, 17 September 2002.Directive 2004/48/EC of the European Parliament and of the Council of29 April 2004 on the enforcement of intellectual property rights, OJ L195/16, 2 June 2004.

DECISIONS

Council Decision 91/396/EEC of 29 July 1991 on the introduction of asingle European emergency call number, OJ L 217/31, 6 August 1991.Council Decision 92/264/EEC of 11 May 1992 on the introduction of astandard international telephone access code in the Community, OJ L137/21, 20 May 1992.Council Decision 94/800/EC of 22 December 1994, concerning theconclusion on behalf of the European Community, as regards matterswithin its competence, of the agreements reached in the Uruguay Roundmultilateral negotiations (1986-1994), OJ L 336/191, 23 December 1994.

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Council Decision 97/838/EC concerning the conclusion on behalf of theEuropean Community, as regards matters within its competence, of theresults of the WTO negotiations on basic telecommunications services,OJ L 347/45, 18 December 1997.Decision 128/1999/EC of the European Parliament and of the Council of14 December 1998 on the co-ordinated introduction of a third generationmobile and wireless communications system (UMTS) in the Community,OJ L 17/1, 22 January 1999.Decision 676/2002/EC of the European Parliament and of the Council of7 March 2002 on a regulatory framework for radio spectrum policy inthe European Community (Radio Spectrum Decision), OJ L 108/1, 24April 2002.Commission Decision of 29 July 2002 on establishing the EuropeanRegulators Group for electronic communications networks and services,OJ L 200/38, 30 July 2002.Commission Decision of 14 September 2004 amending Decision 2002/627/EC establishing the European Regulators Group for ElectronicCommunications Networks and Services OJ L 293/30, 16 September 2004.Decision 854/2005/EC of the European Parliament and of the Council of11 May 2005 establishing a multiannual Community Programme onpromoting safer use of the Internet and new online technologies, OJ L149/1, 11 June 2005.

RESOLUTIONS

Council Resolution of 19 January 1999 on the consumer dimension ofthe Information Society, OJ C 23/1, 28 January 1999.Council Resolution of 28 October 1999 on the role of standardisation inEurope, OJ C 141/1, 19 May 2000.Council Resolution of 21 January 2002 on the development of theaudiovisual services sector, OJ C 32/4, 5 February 2002.

RECOMMENDATIONS

Council Recommendation 86/659/EEC of 22 December 1986 on thecoordinated introduction of the integrated services digital network(ISDN) in the European Community, OJ L 382/36, 31 December 1986.Commission Recommendation on relevant product and service marketswithin the electronic communications sector susceptible to ex anteregulation in accordance with Directive 2002/21/EC, OJ L 114/45, 8 May2003.

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Commission Recommendation of 23 July 2003 on notifications, timelimits and consultations provided for in Article 7 of Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on acommon regulatory framework for electronic communications networksand services, OJ L 190/13, 30 July 2003.Commission Recommendation of 19 September 2005 on accountingseparation and cost accounting under the regulatory framework forelectronic communications, OJ L 266/64, 11 October 2005 andaccompanying Explanatory Memorandum of 19 September 2005.

NOTICES

Commission guidelines on application of EEC competition rules in thetelecommunications sector, OJ C 233/2, 6 September 1991.Commission Notice on the concept of undertakings concerned, OJ C 66/14, 2 March 1998.Commission Notice on the application of the competition rules to accessagreements in the telecommunications sector, OJ C 265/3, 22 August1998.Guidelines on vertical restraints, OJ C 291/1, 13 October 2000, [2001] 2CMLR 1074.Commission Notice on agreements of minor importance, which do notappreciably restrict competition under Article 81(1) of the Treatyestablishing the European Community (de minimis), OJ C 368/13, 22December 2001.Commission Guidelines on market analysis and the assessment ofsignificant market power under the Community regulatory frameworkfor electronic communications networks and services, OJ C 165/6, 11July 2002.Guidelines on the effect on trade concept contained in Articles 81 and82 of the Treaty, OJ C 101/81, 27 April 2004.

GREEN PAPERS

Green Paper on the development of the common market fortelecommunications services and equipment: Towards a dynamicEuropean economy, COM(1987) 290 final, 30 June 1987.Green Paper on the convergence of the telecommunications, media andinformation technology sectors, and the implications for regulation:Towards an Information Society approach, COM(1997) 623, 3 December1997.Green Paper on services of general interest, COM(2003) 270 final, 21May 2003.

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WHITE PAPERS

White Paper on growth, competitiveness and employment, COM(1993)700 final, 5 December 1993.European governance: White Paper, COM(2001) 428 final, 25 July 2001.

EUROPEAN COMMISSION COMMUNICATIONSCommunication on the consultation on the review of the situation inthe telecommunications services sector, COM(1993) 159 final, 26 April1993.1992 Review of the situation in the telecommunications sector, SEC(1992)1048, 21 October 1992, COM(1993) 159 final, 28 April 1993.Developing universal service for telecommunications in a competitiveenvironment, COM(1993) 543, 15 November 1993.Universal service for telecommunications in the perspective of a fullyliberalised environment, COM(1996) 73 final, 13 March 1996.Services of general interest in Europe, OJ C 281/3, 26 September 1996.Communication on the assessment criteria for national schemes for thecosting and financing of universal service in telecommunications andguidelines for the Member States on operation of such schemes,COM(1996) 608 final, 27 November 1996.Results of the public consultation on the Green Paper on the convergenceof the telecommunications, media and information technology sectors,and the implications for regulation [COM(1997) 623], COM(1999) 108final, 10 March 1999.The globalisation of the Information Society: The need for strengthenedinternational coordination, COM(1998) 50 final, 4 February 1998.Fifth Report on the implementation of the telecommunicationsregulatory package, COM(1999) 537 final, 10 November 1999.Towards a new framework for electronic communications infrastructureand associated services: the 1999 Communications Review, COM(1999)539 final, 10 November 1999.Status of voice on the Internet under Community law, and in particular,under Directive 90/388/EEC Supplement to the Communication bythe Commission to the European Parliament and the Council on thestatus and implementation of Directive 90/388/EEC on competition inthe markets for telecommunications services, OJ C 369/3, 22 December2000.Unbundled access to the local loop: Enabling the competitive provisionof a full range of electronic communications services, includingbroadband multimedia and high-speed internet, OJ C 272/55, 23September 2000.

xxviii


eEurope 2005: An Information Society for All, An Action Plan to bepresented in view of the Sevilla European Council, 21 and 22 June 2002,COM(2002) 263 final, 28 May 2002.Electronic communications: the road to the knowledge economy,COM(2003) 65 final, 11 February 2003.Towards a global partnership in the Information Society: EU perspectivein the context of the United Nations World Summit on the InformationSociety (WSIS), COM(2003) 271 final, 19 May 2003.Integrated product policy, COM(2003) 302 final, 18 June 2003.Connecting Europe at high speed: Recent developments in the sector ofelectronic communications, COM(2004) 61, 3 February 2004.Communication on the role of European standardisation in theframework of European policies and legislation, COM(2004) 674 final,18 October 2004.European electronic communications regulation and markets 2004 (TenthReport) COM(2004) 759 final, 2 December 2004.Communication to the Spring European Council, Working together forgrowth and jobs: A new start for the Lisbon Strategy, COM(2005) 24, 2February 2005.On the review of the scope of universal service in accordance with Article15 of Directive 2002/22/EC, COM(2005) 203, 24 May 2005.i2010 A European Information Society for growth and employment,COM(2005) 229 final, 1 June 2005.Towards a global partnership in the Information Society: Thecontribution of the EU to the second phase of the WSIS, COM(2005) 234final, 2 June 2005.Proposal for a Directive of the European Parliament and of the Councilamending 89/552/EEC on the coordination of certain provisions laiddown by law, regulation or administrative action in Member Statesconcerning the pursuit of television broadcasting activities, COM(2005)646 final, 13 December 2005.On market reviews under the EU regulatory framework: Consolidatingthe internal market for electronic communications, COM(2006) 28 final,6 February 2006.European electronic communications regulation and markets 2005(Eleventh Report), COM(2006) 68 final, 20 February 2006.Report regarding the outcome of the Review of the scope of universalservice in accordance with Article 15(2) of Directive 2002/22/EC,COM(2006) 163 final, 7 April 2006.

INTERNATIONAL TREATIES AND CONVENTIONS

Universal Declaration of Human Rights (GA Resolution 217 A (iii), UNDoc. A/810, 10 December 1948.

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Council of Europe, Convention for the Protection of Human Rights andFundamental Freedoms, Rome, 4 November 1950, as amended byProtocol No 11, ETS No 155.International Covenant on Economic, Social and Cultural Rights (GAResolution 2200 A (xi), UN Doc. A/6316, 1966, entered into force 3 January1976.International Covenant on Civil and Political Rights (GA Resolution 2200A (xxi), UN Doc. A/6316, 1966, entered into force 23 March 1976.European Convention on Human Rights, Charter of Fundamental Rightsof the European Union, OJ C 364/1, 18 December 2000.Universal Declaration on Cultural Diversity, adopted at the 31st Sessionof the General Conference of UNESCO, 2 November 2001.Convention on the Protection and Promotion of the Diversity of CulturalExpressions, adopted at the 33rd Session of the General Conference ofUNESCO, 20 October 2005.

WTO DOCUMENTS

General Agreement on Tariffs and Trade of 30 October 1947, annexed tothe Final Act of the United Nations Conference on Trade andEmployment, Havana 1947, entered into force 1 January 1948(subsequently rectified, amended, or modified by the terms of legalinstruments, which have entered into force before the date of entry intoforce of the WTO Agreement).Services Sectoral Classification List, WTO Doc. MTN.GNS/W/120, 10July 1991.Agreement Establishing the World Trade Organization withUnderstanding on the Rules and Procedures Governing the Settlementof Disputes and Trade Policy Review Mechanism, Marrakesh, TS57(1996) Cm 3277; (1994) 33 ILM 15, 15 April 1994.Fourth Protocol to the General Agreement on Trade in Services, S/L20,30 April 1996.Singapore Ministerial Declaration, Conf. Doc. WT/MIN(96)/DEC/W, 13December 1996.WTO Secretariat, Background Note on Telecommunication Services, S/C/W/74, 8 December 1998.Work Programme on Electronic Commerce Progress Report to theGeneral Council, adopted by the Council for Trade in Services, S/L/74,27 July 1999.Communications from the United States, Market Access inTelecommunications and Complementary Services, S/CSS/W/30,18 December 2000.

xxx


Communication from the European Communities and their MemberStates, GATS 2000: Telecommunications, S/CSS/W/35, 22 December 2000.Communication from Switzerland, GATS 2000: Audio-Visual Services,S/CSS/W/74, 4 May 2001.Communication from Colombia, Telecommunications Services, S/CSS/W/119, 27 November 2001.Doha Ministerial Declaration, WT/MIN(01)/DEC/W/1, 14 November2001.Communication from the European Communities and its Member States,Conditional Initial Offer, TN/S/O/EEC, 10 June 2003.Communication from the European Communities and its Member States,Classification in the Telecom Sector under the WTO-GATS Framework,TN/S/W/27, S/CSC/W/44, 10 February 2005.Communication from the United States, Classification in theTelecommunications Sector under WTO-GATS Framework, TN/S/W/35,S/CSC/W/45, 22 February 2005.Communication from the European Communities and its Member States,Conditional Revised Offer, TN/S/O/EEC/Rev.1, 29 June 2005.Communication from Australia, Canada, the European Communities,Japan, Hong Kong China, Korea, Norway, Singapore, the SeparateCustoms Territory of Taiwan, Penghu, Kimmen and Matsu and theUnited States, TN/SW/50, 1 July 2005.Hong Kong Ministerial Declaration, WT/MIN(05)/DEC, 22 December2005.

WSIS DOCUMENTS

WSIS, Background Note on the Information Society and Human Rights,WSIS/PC-3/CONTR/178-E, 27 October 2003.WSIS, Declaration of Principles, WSIS-03/Geneva/Doc/4-E, 12 December2003.WSIS, Plan of Action, WSIS-03/Geneva/Doc/5-E, 12 December 2003.WSIS, Tunis Commitment, WSIS-05/Tunis/Doc/7-E, 18 November 2005.WSIS, Tunis Agenda for the Information Society, WSIS-05/Tunis/Doc,6(Rev.1)-E, 18 November 2005.

xxxi

PROLOGUE

I started this work at the peak of the dotcom buzz and was mostfascinated by the process of convergence and its indefinability. My wishwas to explore how the European Community telecommunicationsregulation would respond to convergence and the changed dynamicsof the communications sector. The EC did respond in 2002 in a fairlyinnovative way and created the current rules for what is now called theelectronic communications sector. With the progress of my work overtime, however, my research task went beyond the limitations of analysingthe EC regulatory framework. I took upon myself other (and moreburdensome) tasks and attempted to explore the communications systemthrough the filter of competition law. This involved not only a pureexamination of the existing instruments, case law and practice, but alsoan analysis in the broader sense of governance. Thereby, I was primarilydriven by the aspiration of considering all the elements of the complexcommunications ecosystem, while designing or assessing the appliedregulatory regime.

This work is to a great extent inspired by Pierre Larouches seminal bookon competition and regulation in European telecommunications,1 whichalthough analysing the previous Community regulatory regime, is astepping stone for any research endeavour in EC communications law.The present work is in that sense a humble attempt for continuation ofthe debate on an appropriate regulatory design for Europeancommunications markets, albeit in a transformed environment.

My venture would have never been completed if it were not for thepeople, who helped me along the way. My thanks go in particular toProfessor Christoph Beat Graber of the University of Lucerne. He showedme what a truly interdisciplinary perspective is, guided me through thedebris of international media and communications law and taught methe joy of writing. I am most indebted to my supervisor Professor ThomasCottier of the University of Berne, who with invariable precisionpinpointed my position in the big picture of international governanceand helped me not to lose my way in this dynamic multi-stakeholder,multi-level environment. Through the constant exchange of ideas, bothof them made the loneliness of the long-distance runner, inherent towriting a PhD thesis, less unbearable. I would further like to thank the1 Pierre Larouche, Competition Law and Regulation in European Telecommunications, Oxford/Portland, Oregon: Hart Publishing, 2000.

xxxii

i-call (International Communications and Art Law Lucerne) ResearchCentre for making available its superb collection of books, which partlyexplains the lengthy bibliography of this work.

My gratitude goes above all to my parents and my brother, who haveincessantly supported me at every step I took with lots of love andunderstanding. This work is for Boris, who makes me a happy andbalanced person.

Berne, April 2006

1INTRODUCTION

Telecommunications have developed over the past couple of decades atan incredible speed, especially if one compares this pace with that ofthe other sectors of the economy. We do not even talk oftelecommunications as such any more but rather of electroniccommunications.1 Even if we do speak of telecommunications, wedefinitely do not mean just voice telephony or the simple services weused to associate with it. The POTS (plain old telephone services) havedefinitely been replaced by PANS (pretty amazing new stuff).2

The decreasing size of our phones and the increasing number of waysin which we can communicate are hardly the only result of this(r)evolutionary development of the telecommunications sector. Indeed,the latter has multiple implications. The communications industry, aspart of the information and communication technologies (ICT)industries, has clearly emerged as an engine for rapid growth of theglobal economy. This increased economic and social significance ofcommunications has been made possible by and is closely related to thechange of paradigm for telecommunications regulation. Whereaspreviously there was broad agreement that telecommunicationsconstitute a natural monopoly, received wisdom now has it that theycan (and should) be operated under normal market conditions. Thisparadigm shift, together with a plethora of other factors, both exogenousand endogenous to the sector, have triggered its liberalisation andthereby proved in practice the benefits of open communications markets.The processes of liberalisation and the related reregulation have unfoldedwith differing intensity around the globe and have been clear successstories in terms of economic performance.

Yet, although these processes radically transformed the regulatoryenvironment (or maybe precisely because of this), they did not of themselvesprovide answers to all regulatory questions pertinent to communications.Despite the multiple transition models of regulation and the possibility ofexperimenting therewith, no coherent regulatory vision has yet emerged.1 The term electronic communications was coined by the 2002 EC framework forelectronic communications networks and services to encompass all of these. Theterminology as well as the scope and design of the regulatory regime are elaboratedupon in Chapters 1 and 4.2 Rob Frieden (Rapporteur), New World, New Realities: The Remaining Roles ofGovernment in International Telecommunications, Report of the Fifth Annual AspenInstitute Roundtable on International Telecommunications, Washington, DC, 2000.

2EC Electronic Communications and Competition Law

Today, after the transition from monopoly to competition, we are facedwith perhaps an even harder regulatory puzzle, since we must figure outhow to regulate a sector that is as dynamic and as unpredictable as electroniccommunications have proven to be, and is vital and fundamental to theeconomy and to society at large.

The inherent dynamism of communications markets also has implicationswhen one attempts to write about them, especially if one dares to do sofrom a legal point of view. To use the words of others in a similar situation,[g]iven the lightning pace of change in the telecoms industry, writing abook on the current status of the relevant laws and regulation is virtuallyan impossible (and, moreover, probably useless) task. Indeed, given thepersonal experience, we are confident that some major regulatory initiativefrom either Washington or Brussels will no doubt come out just after wehave submitted this manuscript for publication and before the ink is dry onthe first print edition of this book.3

Despite the seeming uselessness, or at least the transient value of writingon telecommunications, an attempt is still worth the effort. Even if we admitthat such a work could only capture a snapshot of the current state of thecommunications sector and the applicable law, it could allow an analysisof these snapshots so that they could be fitted into the mosaic of a biggerpicture in pursuit of a more comprehensive regulatory model for electroniccommunications. This is indeed the approach of the present work.

Seeking an answer to the question Can competition law do it all?, thiswork examines the potential of generic competition rules as a regulatoryinstrument applied to communications markets. It is however notnecessarily a case against antitrust and a case for sector specificregulation but rather an attempt to analyse objectively their respectiveregulatory toolkits within the specific setting of the EuropeanCommunity electronic communications. The question of whethercompetition law has sufficient regulatory potential needs to be addressedfor (at least) two reasons one concrete and one of a more general nature.

In concrete terms, this question is triggered by the change that occurredin the telecommunications regime of the European Community throughthe adoption of the 2002 framework for electronic communicationsnetworks and services.4 This regulatory reform is based on the premise3 Mark Naftel and Lawrence J. Spiwak, The Telecoms Trade War: The United States, theEuropean Union and the World Trade Organization, Oxford/Portland, Oregon: HartPublishing, 2000, at Preface.4 The 2002 EC regime for electronic communications networks and services consists ofthe Framework, Access, Authorisation, Universal Service and Privacy ProtectionDirectives. It was adopted by the Council and the European Parliament at the beginningof March 2002 and the transposition period for the Member States expired on 24 July

(continued...)

3Introduction

that competition law is a better-suited regulator for the highly fluidenvironment of the communications industry than the previouslyexisting dual regime of regulation, whereby sector specific andcompetition rules were cumulatively applied. The gist of the regulatoryreform is that as markets become effectively competitive, sectoralregulation will be withdrawn and competition law will remain as thesole regulator of the communications sector.

The second reason for analysing the potential of competition law as aregulatory instrument for the communications sector is that the latterpresents a genuine governance puzzle. The design of an appropriateregulatory regime is rendered difficult by the very uniqueness of thecommunications sector. Having developed as a public utility, which waspredominantly monopolistic and heavily regulated, it has undergoneradical changes in the past two decades, both in the sense of technologicalbreakthroughs and emergence of competition in the markets. Law hastried to keep up with the technological developments and the resultantmarket changes but it remains an open question as to whether thesemodifications of law are doing so adequately. New technologies,including those related to communications, influence the substance ofdecisions, as well as the structure of decision-making5 and posesignificant governance challenges.6 In that sense, the question of whatconstitutes the desirable regulatory structure of communications andhow it could be realised needs to be addressed. Relying merely uponthe idea that dismantling regulation is beneficial could be misleadingand in any case, it would be foolish to proceed with completederegulation of the telecom sector without a careful analysis.7

Furthermore, [i]nsofar as technological changes in thetelecommunications industry produce substantial externalities on overalleconomic productivity, there are additional costs associated withregulatory errors8 and thus, an exacerbated need for designing anappropriate regulatory model. The opportunities for wealth creationthrough further evolution of electronic communications and thesustainable development of the Information Society might otherwise bejeopardised.

..)

2003. The 2007 update of the e-communications framework foresees a continuation ofthe 2002 regime with a few adjustments concerning in particular the markets susceptibleto ex ante regulation. See Chapter 4 of this book.5 Thomas Cottier, The Impact of New Technologies on Multilateral Negotiation andGovernance (1996) Chicago-Kent Law Review, Vol. 72, pp. 415436, at p. 417.6 Ibid. at p. 426.7 Nicholas Economides, Telecommunications Regulation: An Introduction (2004) SternSchool of Business Working Paper 0420, at p. 4, also published in Richard R. Nelson (ed.),The Limits of Market Organization, New York: Russell Sage, 2005, pp. 4876.8 Marc Bourreau and Pinar Dogan, Regulation and Innovation in the TelecommunicationsIndustry (2001) Telecommunications Policy, Vol. 25, pp. 167184, at p. 169.

4EC Electronic Communications and Competition Law

In this context, while analysing generic competition rules as applied tothe rapidly changing landscape of the communications sector, the presentwork seeks to contribute to the ongoing governance discussion. Thecurrent European Community regime for electronic communicationswill in that sense serve as a model, an experimental field, in which weshall see how instruments impact and regulatory environments react.This approach also sets this work apart from other studies on ECcommunications law.

The structure of the present enquiry follows the logical line of therelationship between communications as the object of regulation, theeconomic and societal goals and the available regulatory tools appliedfor their achievement. The rationale behind this seemingly simplifiedstructure is the need for considering all the elements of the system inorder to minimise regulatory mistakes and design the most appropriateregulatory model. Before examining the regulatory instruments asapplied to communications, it is vital to figure out what exactly the objectof regulation is, especially in a sector as unique as electroniccommunications. Chapter 1 will hence identify the characteristicssymptomatic of electronic communications. It will analyse them asnetwork-bound, dynamic, converging, regulation sensitive and havinga special significance and role. Chapter 2 introduces the goals andobjectives, which the regulatory model for electronic communicationsshould be able to address, since goal evaluation is an essential elementof the regulation designing process. As a whole, Part 1 (includingChapters 1 and 2) will thus set the specific scene against which theregulatory potential of competition law will be tested, both in terms ofthe specific characteristics inherent to communications and in terms ofspecific regulatory objectives.

Part 2, comprising Chapters 3, 4 and 5, will then proceed with theexamination of the third element along the logical line of object ofregulation goals regulatory tools and concentrate on competitionlaw and sector specific rules as instruments of regulation. The potentialof each will be respectively analysed and ultimately compared, first inan abstract framework (Chapter 3) and then in the concrete setting ofEuropean Community law (Chapter 4). With the benefit of hindsightregarding the multiplicity of regulatory models applied totelecommunications, the development of the EC communications regimewill be closely examined in order to give real life examples of the prosand cons of both tools and to provide a firm basis for assessment. Thefocus of the analysis is placed upon the control of market power, inparticular in the sense of unilateral behaviour of undertakings. Extensiveattention is paid to the 2002 EC framework for electronic communicationsnetworks and services and its 2007 update, which prescribed the

5Introduction

9 By way of guidance to the readers, it should be noted that each chapter within the bookis an autonomous document. Footnotes are numbered for each chapter separately andbegin anew with every chapter. Cross-references from one chapter to the other areindicated by the number of the chapter, as well as where necessary by the section(s)within it. References to Section numbers without chapter indication are to the sameChapter. All websites, except otherwise specified, were last accessed on 1 April 2007. Thestate of legislation is that of 1 April 2007.

mechanism shifting to pure antitrust regulation of electroniccommunications and as mentioned, led us to put forward the question:Can competition law do it all? Chapter 5 introduces the rules of theWorld Trade Organization applicable to telecommunications servicesand the relevant commitments of the European Communities, therebycompleting the examination of EC communications law and illustratingthe interplay between Community and international trade law in thisfield.

Upon the foundation laid down in Part 1, presenting the specificcharacteristics of the communications sector and the relevant goals andPart 2, examining the regulatory potential of competition law rules, Part3 will provide a final assessment. Ultimately, an answer to the questionof whether European Community competition law is capable (or capableenough) of dealing with all the specificities intrinsic to communications,while securing the achievement of the pertinent economic and societalobjectives, will be given.9

PART 1:ELECTRONIC COMMUNICATIONS AS A DISTINCT AND

UNIQUE OBJECT OF REGULATION

9CHAPTER 1THE OBJECT OF REGULATION

1. Introduction

Any design of adequate regulatory instrumentarium necessitates a clearidentification of the object of regulation. In this line of reasoning, beforeplunging into analysis of the regulatory tools applied to the electroniccommunications sector1 and their potential, it is of primary importanceto clarify what exactly is to be regulated. What is precisely the object ofcommunications regulation? For the majority of sectors of the economy,such a question is more or less pointless, or self-explanatory. This wastrue for telecommunications a couple of decades ago but does not holdtrue any longer. Today, the electronic communications sector escapes aclear-cut definition and is truly unique.

In broad terms, telecommunications can be defined as the process ofconveying information over a distance by means of a system usingelectrical energy. The corresponding industry parameters are, however,not as clear. New ways of transporting information (building upon orsubstituting for the old ones) and a plethora of new services areconstantly emerging. In that sense, the communications sector is a workin progress and any definition given will be at the best a snapshot of itspresent state of development.

Article 1 of the Framework Directive of the current EuropeanCommunity regime for electronic communications states that it shallcover the regulation of electronic communications services,electronic communications networks, associated facilities and1 The terms electronic communications, telecommunications, communications ande-communications will be used interchangeably throughout the work for the sake ofreader friendliness, as it is often the case in European Communitys documents. Electroniccommunications is the term coined by the 2002 EC framework for electroniccommunications networks. The scope of the latter term (also known in EC jargon as e-communications) is strictly speaking more extensive than that of telecommunications,since it covers all electronic communications services and/or networks which are concernedwith the conveyance of signals by wire, radio, optical or other electromagnetic means (iefixed, wireless, cable television, satellite networks), including the transmission andbroadcasting of radio and television programmes. See Commission Directive 2002/77/EC of 16 September 2002 on competition in the markets for electronic communicationsnetworks and services, OJ L 249/21, 17 September 2002, at Recital 7. For a clarification ofthe scope of the current European Communitys electronic communications regime, seeinfra Part 2, Chapter 4, in particular Section 3.2.2.

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associated services.2 Electronic communications network is definedin the subsequent Article to mean transmission systems and, whereapplicable, switching or routing equipment and other resourceswhich permit the conveyance of signals by wire, by radio, by opticalor by other electromagnetic means, including satellite networks, fixed(circuit- and packet-switched, including internet) and mobileterrestrial networks, electricity cable systems, to the extent that theyare used for the purpose of transmitting signals, networks used forradio and television broadcasting, and cable television networks,irrespective of the type of the information conveyed. Electroniccommunications service is defined accordingly as a service normallyprovided for remuneration which consists wholly or mainly in theconveyance of signals on electronic communications networks,including telecommunications services and transmission services innetworks used for broadcasting, excluding services providing, orexercising editorial control over, content transmitted using electroniccommunications networks and services, and information societyservices.3

The above extensive definitions are clearly helpful when one needs toidentify precisely the scope of application of the legal instrument inquestion and they will be used as such in the legal discussions in Parts2 and 3 of this work. These definitions fail, however, to reveal the natureof the object of regulation.

In order to introduce the communications sector beyond its currentlyexisting legal designations, the next Sections will attempt to identifytelecommunications and its contemporary counterpart of electroniccommunications,4 first by providing a brief overview of the industrysdevelopment (Sections 2 and 3) and secondly and more importantly, byanalysing its intrinsic characteristics (Section 4).

2. Brief Historical Remarks

The historical overview does not go back to the time when telegraphand telephone were invented (in 1844 and 1876 respectively) or to thestructure of the telecommunications industry that developed in thecentury that followed.5 Its purpose, fitting to the overall purpose of this2 Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 ona common regulatory framework for electronic communications networks and services(Framework Directive), OJ L 108/33, 24 April 2002.3 As defined in Article 1 of Directive 98/34/EC laying down the procedure for the provision ofinformation in the field of technical standards and regulations, OJ L 204/37, 21 July 1998.4 See supra note 1.5 An excellent overview of the early discoveries and developments in thetelecommunications sector is provided by David Gillies and Roger Marshall,

(continued...)

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The Object of Regulation

work, is rather to stress the transformation from monopolistic tocompetitive telecommunications markets that took place in the last twodecades, and is still unfolding in the present.

The picture of the telecommunications industry until the beginning ofthe 1980s was a fairly simple one. The traditional view of thetelecommunications sector as one of the network-bound ones6 was thatin order to achieve certain public policy objectives most notablyuniversal service7 a single, often state-owned, TelecommunicationsOperator (TO)8 must be established in the particular state.Telecommunications markets were strictly national and the servicesoffered to the public rather limited. The latter were basically identicalwith the provision of plain voice telephony service. Transmission andterminal equipment was largely purchased from national suppliers andthere was little standardisation.9 The traditional sectoral regulation didnot make a distinction between infrastructure, terminal equipment andservices. All these activities were in the hands of one monopolisedorganisation.10 Given that the Public Telecommunications Operator(PTO) normally held monopoly over the infrastructure, the onlyalternative to using the services provided by the PTO was to self-providethose services, which was possible only for the largesttelecommunications customers and extremely costly.11

The above quite bleak and simplistic image of the telecommunicationsindustry and its comparison with todays dynamic electroniccommunications market with an abundance of services (and evennetworks!) and multiple market players provokes a legitimate question:What caused this transformation?

.)

Telecommunications Law, Vol. 1, 2nd edition, London: Butterworths LexisNexis, 2003, atpp. 23. See also Anton A. Huurdeman, The Worldwide History of Telecommunications, NewYork: John Wiley and Sons, 2003.6 For analysis of telecommunications as a network-bound sector, see infra Section 4.17 For an extensive discussion of universal service policies, see infra Chapter 2,Section 3.2.8 In the EC, the Post, Telegraph and Telephone (PTT) model used to dominate. The Ministryfor Post and Telecommunications ran the telecommunications network. Being the owner ofthe enterprise, the State was responsible for the firms business strategy and the regulation ofmarket access. On the PTT model, see Oliver Stehmann, Network Competition for EuropeanTelecommunications, Oxford: Oxford University Press, 1995, at pp. 7879; Damien Geradinand Michel Kerf, Controlling Market Power in Telecommunications, Oxford: Oxford UniversityPress, 2003, at pp. 67; Rob Frieden, Managing the Internet-Driven Change in InternationalTelecommunications, Boston/London: Artech House, 2001, at pp. 54 et seq.9 On standardisation, see infra Chapter 2, Section 2.3.1.10 Willem F. Korthals Altes, Regulation Instruments from a Legal Perspective in KornelTerplan and Patricia Morreale (eds.), The Telecommunications Handbook, Boca Raton, FL:CRC Press LLC, 2000, pp. 149 et seq., at p. 152.11 Some multinational enterprises, banking and insurance companies and the governmentused this alternative by leasing capacity from the PTOs. This practice was nonethelesslimited due to the high costs involved.

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The European Commission stated in its Fifth TelecommunicationsReport12 that:

[t]he move to a liberalised and harmonised Community[telecommunications] market was driven by a number of well-documented phenomena, in particular the globalisation ofmarkets and rapid advances in technology. Other events, such asthe rapid rise in mobile penetration rates, the spread of theinternet, and the convergence of the telecommunications,broadcasting and information technology sectors, were largelyunforeseeable, at least at the outset of the process. Underpinningthe resulting regulatory framework was the political objective,set out in the Treaty in terms of the need to secure growth,employment and competitiveness and protect the interests ofconsumers, of ensuring a wide choice of providers and services,innovation, competitive prices and quality of service.13

Eli M. Noam provides another concise description of the impetus behindthe transformation of telecommunications, suggesting that:

[t]he driving force behind the restructuring of telecommunicationswas the shift toward an information-based economy, whichresulted in the rapid growth and reliability of telecommunicationsas the medium for the electronic transmission of information.Especially, for large organisations, the price, control, security andreliability of telecommunications became variables requiringorganised attention. In a series of steps, each controversial andpainful, monopoly began to give way to the network of networks,as the foundation to todays diverse telecommunications andInternet infrastructure.14

These statements outline lucidly some of the main phenomena that drovethe telecommunications restructuring. However, they are both set withinthe context of todays policy reasoning and in this sense, take a bit of romanticview of past events. The initial reasons that triggered the change in thepolicies towards telecommunications and thus the process of liberalisationwere more practical in nature. Indeed, it was a constellation of technologicaldevelopments and economic considerations that transformed into a policyframework and not the other way around.

12 European Commission, Fifth Report on the implementation of the telecommunicationsregulatory package COM(1999) 537 final, 10 November 1999.13 Ibid. at p. 5.14 Eli M. Noam, Interconnecting the Network of Networks, Cambridge, MA: MIT Press, 2001,at p. 1.

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3. The Metamorphosis of (Tele)communications

The triggers for the metamorphosis were mostly within thecommunications sector itself.

Technology came first and now with the benefit of the hindsight, onecan discern the technological advances that had a profound effect onthe telecommunications industry. Broadly, these were: (i) the progressionfrom analogue to digital systems (or, as it has become known,digitisation); (ii) the invention of the transistor and (iii) the perfectionof the optical fibre.

(i) In its simplest form, a digital code is a binary bit or digit indicatingone of two alternatives (represented as either 0 or 1) to denote thepresence or absence of an electrical signal or two different voltage levels.Binary bits can be grouped in various combinations to representnumbers, alphabetical characters, symbols or any other type ofinformation.15 Through a combination of powerful microprocessors andsophisticated algorithms, these bit streams can then be compressed tomanageable lengths,16 therewith allowing a wide range of content to bestored, retrieved and transported electronically in the form of encodedtext, audio and video traffic over any network infrastructure, providedit is digital. In that sense, digitisation provides a universal code for allinformation and allows its transportation and use in ways quiteinconceivable before.17

(ii) The ability of digital systems to handle multimedia content at lowerand lower cost is a product of the exponential progress in the processingpower and memory of integrated circuits (ICs). The latter depends inturn on the ability to increase the density of transistors on a singleintegrated circuit chip.

The first integrated circuits were fabricated as early as in 1960. Eleven yearslater, in 1971, the Intel Corporation created the first microprocessor by15 Modern telecommunications and computer systems are typically based on the use ofeight bit groups, which provide up to 256 permutations. This is sufficient to cover thenumbers 0 to 9, upper and lower case letters, symbols and control codes and allows onebinary bit to be used for checking purposes.16 For instance, a standard full motion colour television picture with associated soundrequires 120 million bits per second of digital information, which can be compressedinto approximately 2 Mbit/s to 3 Mbit/s.17 For excellent examples, see OECD, Digital Broadband Content: Mobile Content. NewContent for New Platforms, DST/ICCP/IE(2004)14/Final, 3 May 2005; OECD, DigitalBroadband Content: The Online Computer and Video Game Industry, DST/ICCP/IE(2004)13/Final, 12 May 2005; OECD, Digital Broadband Content: Scientific Publishing,DST/ICCP/IE(2004)11/Final, 2 September 2005; OECD, Digital Broadband Content: Music,DST/ICCP/IE(2004)12/Final, 13 December 2005.

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placing an entire computer central processing on a single silicon chip thesize of a fingernail. This technology18 and its ability to handle multimediacontent at lower costs drove the digitisation revolution. Content andnetworks have been digitised in order to make use of this power.19

(iii) The perfection and the use of optical fibers20 for telecommunicationstransmission enhanced the capacity of networks and made theconveyance of digitised information at high speed possible.

Naturally, these groundbreaking technological developments had certaineconomic repercussions.

First, and most remarkably, digitisation fundamentally changed the industryand its inner mechanisms in the course of the two decades prior to theliberalisation. It fuelled the integration of telecommunication services, datatransmission and audiovisual media and the opening up of new marketsfor value-added network services. The merging of telecommunications andinformation technology allowed the introduction of new services andproducts, which vastly improved the quality and range of communicationsservices. Telecommunications and data processing gradually became relatedindustries. Thereby, a heavily regulated market (telecommunications) andan almost unregulated one (information technology) were coming closerto each other and the question of which regulatory regime should prevailneeded to be addressed.21

Secondly, the demand by the other industries for communications wasincreasing rapidly. Communications became an important input,especially for the growing services sector of the economy. It wasacknowledged that cheaper and faster means of communications couldreduce transaction costs in all areas. The rapid development of anefficient telecommunications network was therefore regarded as crucialfor fostering higher productivity growth.22 Within the European18 Microprocessor in a more technical language is a technological system with solid-stateintegrated circuits at its core, supplemented by photonic components (lasers and opticalfibres) and applications of mathematical information theory.19 The above paragraph is based on excerpts of Milton L. Mueller, Digital Convergenceand its Consequences: a Report on the Digital Convergence and Market Structures, 1999,available at http://dcc.syr.edu/miscarticles/rp1.pdf and David Gillies and Roger Marshall,supra note 5, at p. 9.20 The concept was originally developed at Standard Telephones and Cable Ltd., England.For more on the development of optical fibre technology, see David Gillies and RogerMarshall, ibid. at p. 19.21 Klaus W. Grewlich, Access to Global Networks European Telecommunications Lawand Policy in German Yearbook of International Law, Vol. 41, Berlin: Duncker & Humblot,1998, pp. 1 et seq., at p. 25.22 See eg European Commission, White Paper on growth, competitiveness andemployment, COM(1993) 700 final, 5 December 1993.

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Community, the existing national networks were considered asinsufficient to cater for the forecast increase in demand for telecomservices in particular for international communications.

Thirdly, besides its importance as an input for other industries, thetelecommunications industry was itself acknowledged to havealready a considerable size and growth potential. While in 1984 thesectors share of the European Communitys GDP was slightly above2 per cent, it was expected to rise to 7 per cent by the end of thecentury and by this time, up to 60 per cent of all jobs were expectedto depend directly or indirectly on telematic technologies.23 The worldmarket for telecommunication services was estimated to be growingat a rate of 12 per cent per year.24

The above outlined technological and economic developments werefactors that demanded a policy shift towards the wholetelecommunications industry. As telecommunications activities becameincreasingly integrated into the operations of companies, governmentagencies and most other organisations, as well as into the economic andsocial lives of individuals, there was a growing recognition that theproductivity of the entire economy depends upon an efficientcommunications system.

One also needs to acknowledge the flip side of these developments. AsWilliam H. Melody points out, [t]he significant changes in the role ofthe market that [took] place in telecom internationally [were] notfounded simply upon ideological shifts and a new found faith in the so-called free market. Nor [were] they a directly determined response tothe dictates of new technologies. Rather, the inherited monopolyinstitutions (public or private) had great difficulty adapting to changingeconomic, political and social conditions, of which changing technology23 European Commission, Green Paper on the development of the common market fortelecommunications services and equipment: Towards a dynamic European economy,COM(1987) 290 final, 30 June 1987. See also Reinhard Schulte-Braucks, EuropischesTelekommunikationsrecht fr den gemeinsamen Telemarkt in Joachim Scherer (ed.),Telekommunikation und Wirtschaftsrecht, Cologne: Otto Schmidt, 1988, p. 6, as referred toby Oliver Stehmann, supra note 8, at p. 148.24 Marcel Roulet, France Telecom: Preparing for More Competition (1998)Telecommunications Policy, Vol. 12, No 2, pp. 109113. The Tenth Communications Report(European Commission, European electronic communications regulation and markets2004, COM(2004) 759 final, 2 December 2004, at pp. 23 and Annex 3) shows that theoverall growth of the sector was 11.9 per cent in 2000 and is estimated at 4.6 per cent for2004 in an aggregated market worth 226 billion in 2000 and 277 billion in 2004. Thelatest Eleventh Communications Report (European Commission, European electroniccommunications regulation and markets 2005, COM(2006) 68 final, 20 February 2006, atp. 2) shows that the market is worth 273 billion in 2005 and the overall revenue growthcontinued strong at estimated levels of between 3.8 and 4.7 per cent.

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was only a part. Monopolies operating in a protected, stable environment[were] not well-suited to cope with new and increasingly diversifiedand dynamic market place.25

As a result of this constellation of positive and negative developmentsand under the agreeable conditions of mainstream economic liberalismand intensified globalisation, telecommunications underwent a completereshaping from monopoly to full competition.26 The latter transformationwas by no means a work of magic but was rather accomplished, to recallthe words of Eli M. Noam, through a series of steps, each controversialand painful.27 The liberalisation and the parallel regulatorytransformation of the telecommunications market were an economic andpolitical endeavour. The affirmation of this deregulatory trend at theglobal level, in the realm of the World Trade Organization, was perhapsone of the decisive factors for its success.28

The multiple regulatory models adopted in the EC29 are a vivid exampleshowing the incrementalism of the communications transformation andwill be surveyed in Chapter 4, in the framework of examining the ECcommunications law toolkit. At this stage of unfolding the topic of thiswork, the details of the different regulatory regimes are irrelevant. Whatis significant is to grasp that telecommunications have indeed changed.The rationale for telecommunications regulation and thetelecommunications regulation itself have changed. The sector hasmoved from monopoly to competition, from simple national marketsoffering few services to an increasingly global market with a plethoraof services and market players. In view of this metamorphosis of theindustry and of the law, it is of great importance to bear in mind that the25 William. H. Melody (ed.), Telecom Reform: Principles, Policies and Regulatory Practices,Lyngby: Technical University of Denmark, 1997, at p. 3. See also European Commission,Guidelines on the application of EEC competition rules in the telecommunications sector,OJ C 233/2, 6 September 1991, at para. 3.26 Referring to the European Community and the US telecommunications markets.27 Eli M. Noam, supra note 14.28 The World Trade Organizations (WTO) Basic Agreement on Telecommunications,in 1997, can be seen as a definitive moment in the international communitys commitmentto the structural evolution of the sector from monopolistic to competitive marketplace.See Ian Walden, Telecommunications Law and Regulation: An Introduction in IanWalden and John Angel (eds.), Telecommunications Law and Regulation, 2nd edition, Oxford:Oxford University Press, 2005, pp. 122, at p. 4. For a detailed discussion of the WTOregime for telecommunications services, see infra Part 2, Chapter 5.29 The European Communitys telecommunications market metamorphosis passed throughseveral successive regulatory models, namely: from the traditional model (until 1990),through the model of the 1987 Green Paper (19901996) and the short lived transitionalmodel of the 1992 Telecommunications Review and the 1994 Green Paper (19961998) tothe fully liberalised model which came with the Full Competition Directive (in placesince 1998). For an excellent overview of the models, see Pierre Larouche, CompetitionLaw and Regulation in European Telecommunications, Oxford/Portland, Oregon: HartPublishing, 2000, at pp. 136.

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different models of regulation have built upon each other. Theycorrespond to different

EC Electronic Communications and Competition Law by Mira Burri

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