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The Scope of Sector-specific Regulation in the European Regulatory Framework for Electronic Communications
Published online by Cambridge University Press: 06 March 2019
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The European Community's (EC) regulatory framework for electronic communications contains many detailed and complicated regulations with regard to the content of sector-specific regulation in the field of telecommunications. Remarkably, though, it is rather reticent concerning the question which markets shall be subject to sector-specific regulation. In the ongoing process of transposition, this has caused much confusion and misunderstanding. This article therefore, strives to clarify the mechanism for determining which markets are, at least potentially, subject to sector-specific regulation provided by the Framework Directive (sub B.). At the national level, a draft of the German Telecommunications Acthas been presented by legal experts of the Federal Ministry of Economics and Labour on April 30th, 2003 (Draft German Telecommunications Act), and the subsequent Federal Government's draft act was published on October 15th, 2003 (Revised Draft German Telecommunications Act). These drafts may serve as an example of bringing sector-specific regulation in line with general insights of competition policy within the discretionary scope left by the regulatory framework of the EC (sub C.).
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- Copyright © 2003 by German Law Journal GbR
References
1 Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (Framework Directive), 2002 O.J. (L108/33), hereinafter referred to as “Framework Directive.”Google Scholar
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46 See above, B. I.Google Scholar
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53 Recital 9 of the Market Recommendation.Google Scholar
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57 See also Cosma, H. A. & Whish, R., supra note 32, at 37. According to some authors, this constitutes an explicit exception to the principle of attribution of powers, see M. Ruffert, in C. Calliess & M. Ruffert, supra note 7, Article 211 EC, para. 8.Google Scholar
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76 This sentence has been split into two sentences within Section 10 (2) of the Revised Draft German Telecommunications Act.Google Scholar
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87 Huppertz, C., supra note 6, at 214, rightly points out that (also) from the perspective of EC telecommunications law there is, at least in general, no (need for) sector-specific regulation in a workable market that is not a criteria market – regardless of whether there are or are not one or more SMP undertakings on that market.Google Scholar
88 Koenig, C. et al., supra note 8, at 45.Google Scholar
89 Directive, Framework, suprra note 1, at Article 16 (3) Sentence 1.Google Scholar
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92 Goal conflicts and trade-offs are central to the determination of workably competitive markets, see C. Koenig et al., supra note 8, at 28 and 52; I. Vogelsang et al., supra note 8, at 69.Google Scholar
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96 Minor differences are not per se incompatible with Community law. According to Article 15 (3) Sentence 1 of the Framework Directive, there is explicitly no full harmonisation with regard to market definitions. This might be different with regard to other aspects of the regulatory procedure, e. g. concerning SMP as the trigger criterion for measures of sector-specific regulation, see Capito, R. & Elspaß, M., supra note 9, at 115; R. Klotz, supra note 13, at 293; idem, supra note 24, at 497.Google Scholar
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100 Moreover, it has to be kept in mind that by referring to the control of market power the statutory definition combined four individual functions, see supra note 81.Google Scholar
101 See Koenig, C. et al., supra note 8, at 30; I. Vogelsang et al., supra note 8, at 69. Recital 10 of the Market Recommendation distinguishes between structural barriers on the one hand and legal or regulatory barriers on the other.Google Scholar
102 Additionally, the revised definition contains some examples for situations in which this is the case: where frequent intervention is indispensable, where timely intervention is necessary to create legal certainty, where there is a need for monitoring technical parameters or where there is a need for a detailed assessment of costs. These examples are similar, but not identical to examples given in the explanatory memorandum to the Market Recommendation for circumstances in which sector-specific regulation would be considered to constitute an appropriate complement to general competition law, see European Commission, supra note 17, at 11.Google Scholar
103 Recital 16 of the Market Recommendation.Google Scholar
104 See Bundesverfassungsgericht, Judgement of 16 January 1957, 6 BVerfGE 32 (38).Google Scholar
105 See also Koenig, C. et al., supra note 8, at 174.Google Scholar
106 In contrast, the English version uses the term “full competition”, which is not attached to a particular concept of competition.Google Scholar
107 See Kantzenbach, E., supra note 74, at 136; Koenig, C. et al., supra note 8, at 23; Whish, R., Competition Law 5 (4th ed., 2001). This questionable terminological choice was already made under the former European framework, see Richtlinie 96/19/EG der Kommission vom 13. März 1996 zur Änderung der Richtlinie 90/388/EWG hinsichtlich der Einführung des vollständigen Wettbewerbs auf den Telekommunikationsmärkten, 1996 O.J. (L 74/13) (emphasis added).Google Scholar
108 In particular, “effective competition” is not the same as “workable competition” in the sense of the statutory definition according to Section 3 Number 9 of the Draft German Telecommunications Act, see P. Knauth, Regulierungsschwerpunkte und offene Fragen bei der Umsetzung der Telekommunikationsrichtlinien, 2003 1 Supplement to Kommunikation & Recht 24 (25); C. Koenig et al., supra note 8, at 163. A different view seems to be held by S.-E-Heun, supra note 86, at 488.Google Scholar
109 Huppertz, C., supra note 6, at 364, also critisizes the use of “effective competition” and SMP as (only) supposedly different criteria within the market analysis procedures as a potential source for misunderstandings.Google Scholar
110 See Vogelsang, I., supra note 20, at 509. See also the general recommendation in favour of the concept of workable competition by Koenig, C. et al., supra note 8, at 173; I. Vogelsang et al., supra note 8, at 74.Google Scholar
111 Directive, Framework, supra note 1, at Article 7 (4).Google Scholar
112 Doll, R. et al., supra note 86, at 523; Huppertz, C., supra note 6, at 194; U. Immenga & Kirchner, C., supra note 12, at 353; R. Klotz, supra note 13, at 295.Google Scholar
113 See above, B. II.Google Scholar
114 See also Klotz, R., supra note 9, at 7; idem, supra note 13, at 295; Knauth, P., supra note 108, at 25. Therefore, it seems not quite accurate to call the Market Recommendation “factually binding”; see, however, Huppertz, C., supra note 6, at 194 and 206; Immenga, U., supra note 13, at 673; Klotz, R., supra note 9, at 7.Google Scholar
115 This is the very reason why it is not really helpful in this context to look at the (important) aim of harmonisation that is also pursued by the EC framework for telecommunications. See also supra note 96.Google Scholar
116 See also Schütz, R. et al., supra note 9, at 52. In the original proposal (by the Commission), the Commission should issue a decision on relevant product and service markets, Article (1) Subparagraph 1 Sentence 1 of the Proposal for a Directive of the European Parliament and of the Council on a common regulatory framework for electronic communications networks and services, 2000 O.J. (C 365 E/198). According to Article 249 (4) of the EC Treaty, decisions are binding upon those to whom they are addressed. The question whether the Commission should be granted the power to define the markets that are subject to sector-specific regulation by means of a binding regulatory instrument was one of the major contentious issues during the legislative process, see Braun, J.-D. & Capito, R., supra note 7, at 345; C. Koenig et al., Die Interdependenz von Märkten in der Telekommunikation (Teil II), 2001 Computer und Recht 825 (826).Google Scholar
117 See also Cosma, H. A. & Whish, R., supra note 32, at 52, who point out that “quasi-legal instruments cannot modify the provisions of … the secondary law”, and at p. 53, stressing “that the time for regulation by hard law is not over. It is a fundamental (principle) in all national systems that the authorities need to be given competence by way of law before they can be able (to) regulate individual behaviour. The same equally applies in the Community legal order.”Google Scholar
118 A similar conclusion is drawn by Husch, G. et al., supra note 32, at 141; W. Möschel, Hat das Telekommunikationsgesetz seine Bewährungsprobe bestanden?, 2002 Kommunikation & Recht 161 (164).Google Scholar
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