“mingled with regards that stand aloof from the entire point”*: EP-Resolutions on the media

Posted on September 27, 2008 | Filed Under digital content, public services

wordle - EP Resolution on Community Media wordle.net - EP-Resolution on Media Pluralism

After the hard core legislative acts of the “telecoms package” had been voted on by the European Parliament on 24 September 2008 (see here), the next day Parliament approved two resolutions that contain a lot of big words (as shown in the images here that were created by feeding the resolutions into wordle), but will very likely not have any big consequences “in real life.” The resolution on media pluralism had given rise to fears that the blogosphere would be subject to regulation, but even the reference to blogs now is very opaque: in the “whereas”-part of the resolution it says:

“whereas weblogs represent an important new contribution to freedom of expression and are increasingly used by media professionals as well as by private persons,”

and then the resolution proper picks up the topic again and states that the European Parliament

“Encourages an open discussion on all issues relating to the status of weblogs;”

The main point of the resolution seems to be to bolster the position of public broadcasting, as member states are, for instance, called upon to “support high-quality public broadcasting services which can offer a real alternative to the programmes of commercial channels and can, without necessarily having to compete for ratings or advertising revenue, occupy a more high-profile place on the European scene as pillars of the preservation of media pluralism, democratic dialogue and access to quality content for all citizens”. The resolution also states that “in order to enable the public audiovisual media to fulfil their task in the era of digital technology, it is necessary for them to develop new information services and media over and above traditional programmes and to be able to interact with every digital network and platform” - which is something the German (and Austrian) public service broadcasters will be delighted to here, as they are currently trying to convince the Commission of the need for a quite extensive online presence.

Apart from that - on a more abstract level ;-) - the European Parliament in its resolution is

  • “having regard to” a variety of 15 directives, resolutions, recommendations etc,
  • considering (”whereas”) another panopticum of 63 issues,
  • and then urges (twice), believes (twice, once even firmly), notes, highlights (twice), points out, reminds (twice), calls on (five times), calls for (eight times), takes the view, welcomes (three times), considers (three times), underlines, recognises, encourages (four times), stresses (twice), supports, recommends (five times), maintains, asks, reiterates, agrees, draws attention, is concerned, and finally instructs

As I said, a lot of big words, and if you care to check it out, here is the link. On the same day, the European Parliament also adopted a Resolution on Community Media in Europe. It is somewhat shorter (although having more regards [21], but fewer “whereas” [13], and just 23 paragraphs of calling on, stressing, pointing out, recommending etc.), but to me it seems to provide a little more substance, as it focuses on a more specific issue and drawing at least some attention to community media as an “important means of empowering citizens and encouraging them to become actively involved in civic society”.

*) Shakespeare, King Lear, Act I Scene 1

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“All losses are restored and sorrows end”*? France Télécom v Commission

Posted on September 25, 2008 | Filed Under communication technologies

The “recoupment of losses” is at the heart of the advocate general’s opinion, delivered today in the case C-202/07 P France Télécom v Commission. The ECJ will have to decide on the appeal brought by France Télécom against the judgment of the Court of First Instance of 30 January 2007 (T-340/03 France Télécom SA v Commission); in this judgment the CFI had upheld the Commission decision of 16 July 2003 (COMP/38.233 - Wanadoo Interactive), imposing  a fine of € 10.35 million on Wanadoo Interactive (then a subsidiary of France Télécom) for abusing its dominant position by charging predatory prices for broadband products (mainly in the year 2001).

The advocate general’s opinion agrees with the appeal on several issues. One key point seems to me that according to the advocate general, the CFI “appears to have dealt with the right of a dominant undertaking to align its prices with those of competitors in a general fashion, without, however, applying it to the facts of the particular case before it.”(No. 43) But the most interesting issue certainly is the question of the recoupment of losses: could the Commission hold an undertaking accountable for predatory pricing even if there were no proof that this undertaking could conceiveably expect it would later recoup the losses it had incurred by setting low (”predatory”) prices? The CFI had, just as the Commission, argued that proof of recoupment of losses was not a precondition to making a finding of predatory pricing. The advocate general does not share this view. In his view the case-law of the ECJ (Akzo, Tetra Pak II, Hoffmann-La Roche) requires the possibility of recoupment of losses to be proven, since in a case where there is no possibility of recouping losses, consumers and their interests should, in principle, not be harmed.

To support his view, the advocate general also cites reports by the Economic Advisory Group on Competition Policy (EAGCP), the Organisation for Economic Co-operation and Development and the European Regulators Group (for the latter, he quotes a draft of the “remedies paper”, even though a final (and even revised) version has been available for a couple of years now. But also in this revised version, the ERG holds (just the same as in the draft cited in the opinion):

“According to economic analysis, predatory pricing has the following characteristics: (i) the price charged is below costs, ii) competitors are either driven out of the market or excluded, and (iii) the undertaking s able to recoup its losses.”

We’ll see if the Court will follow this line.

 *) Shakespeare, Sonnet 30.

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Universal Service: everything changed, nothing will be changed

Posted on September 25, 2008 | Filed Under communication technologies

Universal service definitely has not been a priority interest of Commissioner Reding - and it still isn’t. This became evident once more with the presentation of the Communication on the second periodic review of the scope of universal service in electronic communications networks and services in accordance with Article 15 of Directive 2002/22/EC. The new report merely scratches at the surface and does not even cover all the issues the Commission should have addressed according to Art 15 and Annex V of the Universal Service Directive. Summing it up, the short report states that mobile telephony is widely available and used and also that broadband is available for 90% of the EU’s population. The report focuses on overall statistical data and does not touch upon the key question of Annex V: “does the lack of availability or non-use by a minority of consumers result in social exclusion”.

The commission obviously does not want to dig any deeper and prefers to put the issue of universal service still further off. In 2006 the Commission had promised a green book on universal serivce for 2007; Reding - in a speech in May 2007 - then postponed that until 2008: “I will publish a Green Paper next year to launch a wide ranging policy debate among all stakeholders on this issue. This could in turn lead to legislative proposals in 2009.”

And now - we have arrived in 2008 - the new report just hopes to provide “the basis for a discussion on the range of relevant issues”, and announces that “on the basis of this debate, the Commission will issue a Communication in the second half of 2009, summarising the debate. It could follow this up in 2010 with concrete proposals if they are needed to update the Universal Service Directive.”

So we know that mobile and broadband services have drastically altered the situation of end users of electronic communications services. Still, the Commission does all it can to avoid addressing the real issues in universal service, and rather promises another debate, then another communication summarisung the debate, and then - possibly, maybe - concrete proposals. Even if the Commission follows up on this plan - which is not very likely, judging from the track record - then it would probably 2012 before legislative proposals are finally adopted, which would mean that somewhere around five years from now such rules might then be implemented by the member states.

As I have already concluded more than a year ago: “It’s a polite way of saying: Universal Service reform has been called off”.

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Will BERT be “a very good butcher”?

Posted on September 24, 2008 | Filed Under communication technologies

“To my mind, … a good regulator is like a very good butcher. The trick is to not to chop too often, and  know what it means to cut an industry at the joints, not the bone.” When Tim Wu wrote this on the issue of structural separation, he of course didn’t have the European situation in mind. And I wonder what he would have thought of the proposals to create a European regulatory authority (or merely advisory body), be it EECMA (as in the Commission proposal) or BERT (as proposed by the European Parliament). By the way, why isn’t it called the “Euro-regulator”, just like the ”Euro-tariffs” that Reding is so proud of?

The European Parliament today voted on the “Telecom Package” in the first reading, and the texts should become available over the next few hours (here, update: here is a provisional version). As the devil is in the details and the press releases (here and here) just give a broad picture, it is too early for a more detailed assessment (as for the “surveillance” part, la quadrature does a very good job in tracking all the relevant details and fine print).

But judging from the press release, the Parliament continues to favour a “Body of European Regulators in Telecommunications (BERT)” as an advisory body which should “help ensure fair competition and high-quality services across the EU by ensuring that national regulators use similar tools”. So in following the metaphor of Tim Wu, one could say that BERT would not be a (very good or even very bad) butcher, but rather something like a vocational trainer, advising butchers on the knives they should use.

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“O truant Muse, what shall be thy amends”*: Reding’s Roaming Regulation, amended

Posted on September 24, 2008 | Filed Under communication technologies

_demand_function_sms.jpgYesterday, Commissioner Reding presented the key points of the Commission’s proposal to amend the Roaming Regulation; it took until today to also get a text of the proposal on the website, and it still is a “version provisoire”. But anyway, here are the links to the proposal, the accompanying staff working paper and the Communication on the outcome of the review of the functioning of the Roaming Regulation (all provisional versions).

As the explanatory memorandum says, the regulatory actions chosen are simple (”Due to the nature and the simplicity of the regulatory actions chosen in the proposal … the administrative and financial burden on the Community, national governments and authorities will be minimised.”):

  • price limit (retail) for “Euro-SMS” 11 cents (4 cents wholesale for SMS-termination),
  • wholesale price cap for data roaming: 1 € / MB, no price limit for retail
  • automatic message for customers when they are roaming, including personalised tariff information, from 1 July 2010 additionally a “cut- off limit” (where customers can determine a “maximum financial limit” they are prepared to spend on roaming)
  • the voice roaming regulation will be prolonged, with further reductions of retail and wholesale limits (retail active 0.40 € per 1 July 2010, 0.37 € per 1 July 2011, 0.34 € per 1 July 2012; retail passive 0.16€ / 0.13 € / 0.10 €; wholesale 0.23 € / 0.20 € / 0.17 €). For active calls, per-second billing will be mandatory after 30 seconds, for passive calls per-second billing is required right from the first second of the call.

The Commission backs up its proposal with a detailed staff working paper, coming up with a nice exercise in economic fortunetelling by analysing the welfare impact of the regulatory options. To sum it up: not much is known, and most of the rest is either assumed or disregarded (or “a first approximation of the virtually unknown”, here: concerning the characteristics of the functional form of the demand functions for international roaming, an example of the demand function for SMS-roaming is shown above). But still, miraculously, it all sums up nicely and the regulatory options chosen are exactly those that maximize overall welfare.

*) Shakespeare, Sonnet 101.

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What’s good enough for Anderlecht …

Posted on September 16, 2008 | Filed Under communication technologies

… is not good enough for regulators. While the Royal Sporting Club Anderlecht celebrates its centennial this year, Commissioner Reding uses every opportunity (here, here) to denounce the “Belgian football club approach” for the more recent phenomenon of the European “Super-Agency” for telecoms regulation. Obviously, in the view of the Commission, the European Regulators Group (ERG) has failed to deliver, and quite as obviously, ERG-members do not feel very comfortable with the role assigned to them by the Commission. So the Commission proposed to create EECMA, while the national regulators finally - after some ten years of having it around on an informal basis - wanted to formalize their own club, the “Independent Regulators Group” (IRG) - it was proposed to be set up as an association according to Belgian law (”Belgian football club approach”), but on the spot I  can find no evidence now that this really happened. 

In fact the IRG-Website does not give any useful information and remains wholly unclear on the legal status of IRG: in the contact information, a phone-number in the Commission is given, and the same fax number as for the ERG-secretariat; a physical address is missing as is an indication of who is responsible for the content of the website (the domain was reserved by someone from the Portuguese regulator Anacom, and the Site also seems to be hosted/maintained by Anacom). And the documents on the Website are mostly ERG-documents.

 So given this experience, I am not surprised that Reding speaks out strongly against a “private club”-version of a new European regulatory body. Of course a “Belgian football club” serves a different purpose than a public authority involved in devising binding legal rules for businesses, and I would have thought it unimaginable that anyone would believe a “Belgian fotball club”-IRG could have any formal role in the “New ‘New Framework’”. So why such a strong-worded attack? I still strongly suspect that all the fuzz about the Super- or not so Super-Agency is just deliberately raised so as to distract from the one core issue (apart from the spectrum issues) that the Commission wants to achieve in the reform: the “Article 7-Veto” for remedies. Neither the ERG, nor BERT (or Ernie!) nor EECMA really are crucial to the success of the Commission’s strategy, the veto on remedies is.

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Mandatory attempt at conciliation?

Posted on September 15, 2008 | Filed Under communication technologies

A new reference for a preliminary ruling in telecom matters has been lodged at the European Court of Justice by the Giudice di Pace of Ischia. In the cases C-317 /08, C-318/08, C-319/08 and C-320/08 (Alassini, Califano, Iacono, and Multiservice; the question put to the ECJ is the same in all four cases), the Giudice di Pace essentially wants to know whether a mandatory attempt at conciliation (before court proceedings can be initiated), to be undertaken either at a regional communications committee or at an “out-of-court body involved in the consensual resolution of consumer disputes” (according to Recommendation 2001/310/EC), would contravene Community rules that have direct effect.

The reference seems a bit strange, as it quotes not only the Universal Service Directive, but also to the Sale of Consumer Goods-Directive, Art 6 of the European Convention in Human Rights, and two Commission Recommendations on out-of-court dispute resolution (98/257/EG and 2001/310/EG) as “Community rules” that possibly could have direct and binding effect for the provision of eletronic communications services. As I have already written in a bit more detail (in German) here, I do not see where these rules could possibly stand in the way of a mandatory conciliation procedure as it is foreseen in the Italian decree in question (see especially Art 3 of the Annex A), at least if this conciliation procedure would come to a result (or an end) within reasonable time. But we will have to see whether or not the ECJ might take this reference as an opportunity to elaborate a little more on the nature of the dispute-resolution-procedures according to Art 34 of the Universal Service Directive.

And just for information, something completely different from the Agenda of the ECJ: the opinion of the advocate general in the case C-301/06 Ireland/Council und Parliament, concerning the validity data retention directive, will be presented on 14 October 2008.

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Promoting culture without controlling content: AG’s opinion in UTECA-Case

Posted on September 9, 2008 | Filed Under communication technologies, digital content

_barcelona_tv-tower.jpg Last week, advocate general Kokott delivered her opinion in the case C-222/07, UTECA, before the European Court of Justice (not yet available in English). UTECA, a Spanish association of commercial broadcasters, had challenged the Spanish system of requiring television broadcasters to spend at least 5% of their revenue to finance European movies and tv-films, 60% of which has to go to movies/tv-films whose original language is an official language in Spain (español, catalán, gallego, euskera). The Spanish Supreme Court asked for a preliminary ruling, touching three main issues:

The advocate general gave a very clear message: the “Television Without Frontiers”-Directive (89/552/EEC, as amended by directive 97/36/EC) is a minimum directive - member states remain “free to require television broadcasters under their jurisdiction to lay down more detailed or stricter rules in the areas covered by this Directive“. This gives member states a very wide spectrum of possible national measures that can be applied to the broadcasters under their jurisdiction. Also, the directive does not make a difference between commercial or public service broadcasters, and it explicitely includes quota for European and independent productions. Applying stricter national rules does not (necessarily) compromise the directive’s aim to ensure the free transmission of tv broadcasts. There is no definite last word whether or not the Spanish system is proportionate, but the advocate general indicates that 5% of the revenues might not be an excessive burden.

As to the “four freedoms”, the advocate general concedes that the Spanish system might lead to restrictions - however, these restrictions are justified by the legitimate aim to promote culture. Setting the case apart from the case C-17/92, Distribuidores Cinematográficos, the present scheme did not require “Spanish films”, but chose the criterium of language. The advocate general points out that for that reason, the scheme cannot be dismissed as being protectionist, as promoting diversity of language is a valid aim, under the directive as well as under primary law.

And addressing the issue of whether there would have to be some sort of quality control, the advocate general expressely stresses the negative consequences of content- and quality-control in culture and media. It seems, she writes, virtually impossible to lay down objective and just criteria to define culture or to decide what would be “cultural products” worthy to receive funding.Any state-sponsored body deciding funding on qualitative tems would create the impression of pre-censorship. So Community law, according to the advocate general, does not require content- or quality-based criteria for such a funding scheme. And as for the last issue, state aid, the advocate general also finds - as the broadcasters pay out of their own pockets and there is no difference between commercial and public servie broadcasters - that the whole scheme is not a question of state aid.

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Roaming on the Rock: an action devoid of purpose before the CFI

Posted on September 1, 2008 | Filed Under communication technologies

In telecommunications, the Court of First Instance often serves a rather historic purpose: for instance it recently dealt with Magenta margin squeeze issues that dated back more than ten years (the Commission decision that was challenged before the CFI was taken in 2003 - the case is now pending at the ECJ).

The Official Journal of 30 August 2008 now communicates a decision by the CFI to finally close a case that goes back to complaints first raised vis-a-vis the Commission in 1996 (the first action at the CFI was brought in 2003). The joint cases T-433/03, T-434/03, T-367/04 and T-244/05 Gibtelecom obviously touched rather sensitive issues concerning the status of Gibraltar and thus the (external) relations between the UK and Spain, even though on the face of it it was only about roaming agreements, possibly about the abuse of a dominant position and alleged failure of the Commission to act on a complaint based on Art 86 (3) - formerly Art 90 (3) - of the Treaty.

The complaints were brought by Gibtelecom, “the main provider of telecommunications services on the Rock” (as it states on its Website), because it could not conclude roaming agreements with Spanish providers and because Spanish operators did not recognise the international dialling code for Gibraltar assigned by the ITU, so Gibtele was compelled to apply the Spanish numbering plan to Gibraltar. It turned out - not surprisingly - that the measures were attributable to the Spanish Government. The complaints were re-classified as complaints based on Art 90 (3), now Art 86 (3), of the Treaty. After years of investigation, the Commission failed to act.

The case was brought before the CFI which then asked the parties for the views on the implications of the ECJ’s judgment in the case C-141/02 P max mobil, where the ECJ came to the conclusion that the Commission is not obliged to bring proceedings under Art 90 (3) - now 86 (3) -, as individuals cannot require the Commission to take a position in a specific sense. Still, the case rested for another three years, as meanwhile tripartite agreements between Spain, the UK and Gibraltar, had been signed in 2006 that were capable of resolving all matters to the satisfaction of Gibtele. The CFI obviously waited until the agreements were implemented, and then asked Gibtele once more whether the matters were resolved. As Spain now recognized the international dialling code for Gibraltar (in case you wonder: it is 350, right between Spain’s 34 and Portugal’s 351) and Gibtele was also able to conlude roaming agreements with Spanish operators, the Court came to the conclusion that it was no longer necessary to adjudicate on the actions, as they had become “devoid of purpose”. Twelve years after the initial complaints, customers of Gibtele can finally roam in Spain - and vice versa customers of Spanish operators can finally roam on the Rock.

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