Updated: pending telecoms/broadcasting-cases before ECJ and CFI

Posted on October 30, 2008 | Filed Under communication technologies

Once again, a list of possibly interesting cases concerning telecommunications and broadcasting currently pending at the European Court of Justice:

Pending at the Court of First Instance:

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CFI on Danish TV2: licence fee revenue “state resources”, but no adequate reasons for Commission’s overcompensation-claim

Posted on October 22, 2008 | Filed Under digital content, public services

_antenna_bird.jpgIn its judgment in the joined cases T-309/04 TV2 v. Commission, T-317/04 Denmark v. Commission, T-329/04 Viasat Broadcasting UK v. Commission, and T-336/04 SBS and SBS Danish Television v. Commission, handed down today (see also the press release), the Court of First Instance of the European Communities annulled the Commission’s decision in the Case C 2/2003 (published in the Official Journal on 23 March 2006).

Action had been brought by all sides concerned: by private broadcasters as well as by TV2 and Danmark. The judgment is based primarily on reasons of procedure, as the Court found that the Commission has failed to provide an adequate statement of reasons for its claim of overcompensation; the Commission also had not substantiated the claim that Danish authorities did not regularly check the level of the accumulated reserves of TV2. The Court therefore concluded that the Commission erred in finding a state aid and did not go on to fully examine all pleas brought by all complainants. It did, however, make a few important points:

The Court restates that “Member States enjoy a broad discretion for defining what they regard as services of general economic interest. Accordingly, the definition of such services by a Member State can be queried by the Commission only in the event of manifest error. … The possibility open to Member States to define broadcasting SGEIs broadly, so as to cover the broadcasting of full-spectrum programming, cannot be called into question by the fact that the public service broadcaster also engages in commercial activities, in particular the sale of advertising space. … [T]he power of the Member States to define broadcasting SGEIs [Services of General Economic Interest] in broad and qualitative terms, so as to cover the broadcasting of a wide range of programmes, cannot be disputed; nor can the Member States’ freedom to use advertising revenue to finance such SGEIs.”

The Court concludes for the Danish situation:

TV2’s mandate is perfectly clear and precise: to offer the entire Danish population varied television programming which aims to provide quality, versatility and diversity. … It is also necessary to reject the argument that TV2 should not have been recognised as a public service channel, on the ground that its programming is no different from that of the commercial channels, and that the Commission should have compared TV2’s programming with the programming of those commercial channels. … To accept that argument and thereby to make the definition of the broadcasting SGEI dependent – through a comparative analysis of programming – on the range of programming offered by the commercial broadcasters would have the effect of depriving the Member States of their power to define the public service.

As regards the licence fee, the Court noted that the amount is determined by the Danish authorities, the obligation to pay the licence fee does not arise from a contractual relationship (but simply from the ownership of a television or radio receiver), where necessary the licence fee is collected in accordance with the rules on the collection of personal taxes, and the Danish authorities determine TV2’s share; licence fee resources therefore are available to and under the control of the Danish authorities and constitute “State resources”.

The Court is, however, harshly critical of the Commission as regards the reasons given for the second and fourth “Altmark“-criteria*). The Court notes (inter alia) the “Commission’s complete failure to examine seriously, during the formal investigation procedure, the actual conditions which, during the period under investigation, governed the setting of the amount of licence fee income payable to TV2″ and also states that the Commission “failed to examine the file seriously” and that there was a “lack of a serious and detailed examination”.

So the Commission’s decision had to be annulled by the Court - and the story continues (very likely with an appeal to the ECJ).

*) No 90 and 93 of the Altmark Trans Judgment: “Second, the parameters on the basis of which the compensation is calculated must be established in advance in an objective and transparent manner, to avoid it conferring an economic advantage which may favour the recipient undertaking over competing undertakings.”
“Fourth, where the undertaking which is to discharge public service obligations, in a specific case, is not chosen pursuant to a public procurement procedure which would allow for the selection of the tenderer capable of providing those services at the least cost to the community, the level of compensation needed must be determined on the basis of an analysis of the costs which a typical undertaking, well run and adequately provided with means of transport so as to be able to meet the necessary public service requirements, would have incurred in discharging those obligations, taking into account the relevant receipts and a reasonable profit for discharging the obligations.”

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“a well-deserving pillar”: advocate general sees Community pillar ok for data retention

Posted on October 14, 2008 | Filed Under communication technologies

_control_tower.jpg
“The boundary between measures coming under the Community pillar and those which must be adopted within the framework of Title VI of the EU Treaty” (the “third pillar”) is at issue in the case C-301/06 Ireland v. Parliament and Council before the European Court of Justice. Today, advocate general Bot delivered his opinion, and he came to the conclusion that Art 95 of the EC-Treaty was the correct legal basis for the data retention directive (2006/24/EC) and Ireland’s action for annullment should therefore be dismissed (see also the Court’s press release).

“The triple pillar of the world” (Shakespeare, Antony and Cleopatra, Act I Scene 1) - or rather, of the European Community/Union - is a complicated matter, and even the advocate general has doubts about it:

“Although it is regrettable, the constitutional architecture consisting of three pillars nevertheless requires that the areas of action be split up. The priority in this context is to guarantee legal certainty by clarifying as far as possible the respective boundaries between the spheres of action covered by the different pillars.”

And that’s how he sees it in this case (Numbers 106-108 of the opinion):

“106. Measures which harmonise the conditions under which providers of communications services must retain traffic and location data which are generated or processed in the course of their commercial activities belong to the Community pillar. Such an approximation of national laws on data retention reduces the risk of obstacles to the development of the internal market in electronic communications by presenting operators with common requirements. The fact that the Community legislature deemed it necessary to impose an obligation to retain data by reason of the efficacy of this tool for the investigation, detection and prosecution of serious offences is not sufficient to remove such a measure from the Community pillar, since that overriding requirement of public interest may be taken into account by a harmonisation measure adopted on the basis of Article 95 EC. Furthermore, the mention of such an overriding requirement of public interest is vital in order to justify the interference by the Community legislature in the right to privacy of the users of electronic communications services.

107. On the other hand, measures harmonising the conditions under which the competent national law-enforcement authorities may access, use and exchange retained data in the discharge of their duties belong to the third pillar. The direct involvement of such authorities with private operators and the mandatory transmission by the latter of data for law-enforcement purposes fall, in my view, within the scope of ‘police and judicial cooperation in criminal matters’ within the meaning of Title VI of the EU Treaty. At that stage, the participation of private operators in a criminal investigation and their collaboration with the competent national authorities acquire a specific and certain character.

108. This dividing line is certainly not exempt from criticism and may appear artificial in some respects.”

*) Shakespeare, The Merchant of Venice, Act IV, Scene 1

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ECJ: striving for greater efficiency is no justification for delayed implementation

Posted on October 9, 2008 | Filed Under communication technologies

Just a brief note: the European Court of Justice today handed down judgment in the infringement case C-230/07 Commission v Netherlands concerning caller location for calls to the 112 European emergency number. Art 26 paragraph 3 of the Universal Service Directive states that

“Member States shall ensure that undertakings which operate public telephone networks make caller location information available to authorities handling emergencies, to the extent technically feasible, for all calls to the single European emergency call number ‘112′.”

The Netherlands had claimed technical and logistic problems, and maintained they wanted to introduce the “push”-method of providing caller location information (which means that the info is delivered automatically with every call), rather than the “pull”-method, where the emergency service has to “pull” the information from the network operator (the push-method was recommended by the Commission in its Recommendation 2003/558/EC of 25 July 2003 on the processing of caller location information in electronic communication networks for the
purpose of location-enhanced emergency call services).

The ECJ was not impressed: the Netherlands had not questioned the possibility of introducing the “pull”-method, and even striving for greater efficiency (or, in the Dutch original, “het streven naar grotere rendabiliteit” - the English translation is not yet available) is no justification for not fulfilling the obligations laid down in the directive.

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“The advantage of the time prompts me aloud / To call for recompense”

Posted on October 8, 2008 | Filed Under communication technologies

The title of this post, taken from Shakespeare (Henry VI, Part III, Act III, Scene 3),  could have been the motto of Bouygues Télécom in the case C-431/07 P before the European Court of Justice, in which advocate general Trstenjak today delivered her opinion (at the moment available only in French, Finnish and Latvian).

The issue at stake is whether a reduction in the fees charged for the award of the UMTS-licenses should be regarded as state aid. France, a late starter in the UMTS-mania at the end of the past millenium, had not opted for auctioning the spectrum, but rather set a fixed fee and asked for applications, with a deadline set for 31 January 2001. By then, many operators had lost interest, and so there were only two applicants, France Télécom (now: Orange), and SFR, who received their licence in July 2001. But the French authorities continued to look for other interested operators - and lowered the licence fee. Bouygues Télécom then was awarded a licence in December 2002, for a significantly lower fee. However, the fee was also reduced for Orange and SFR. Bouygues considered this reduction to be (non-notified) state aid, as it had provided Orange and SFR with an advantage, because they had to pay the same fee, although they had received their licences around one and a half year earlier than Bouygues. The Commission did not follow Bouygues’ view (Commission decision 20 July 2004, NN 42/2004). 

Bouygues brought an action before the Court of First Instance - and lost (judgment of 4 July 2007, T-475/04). The CFI concluded that the reduction of the fees for Orange and SFR had not been an advantage, or rather, that “in the present case the parties concerned did not benefit from this potential advantage.” Bouygues then appealed to the ECJ.

The advocate general does not follow the CFI’s view that there had not been an advantage for Orange and SFR, because this should not be judged in hindsight, but rather at the time of the state measure. It does not matter if the companies that received the advantage are not able to capitalize on it. However, the advocate general does join the CFI in the conclusion that Bouygues had not established that the earlier licensing of Orange and SFR had affected the competitive situation as regards the access to the UMTS-market. So the advocate general proposes to reject the appeal.

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“But weakly guarded, where the breach was made”*: was T-Mobile’s loss of data a “breach of security”?

Posted on October 6, 2008 | Filed Under communication technologies

In May this year, Deutsche Telekom CEO Oberman was “shaken to the core” by allegations that there were “cases of misuse of call records at Deutsche Telekom in 2005″: it seems Deutsche Telekom had been a bit too keen to know how confidential information on the company had found its way to journalists - and so it kept a close eye on the call records of these journalists (and some labour representatives, too).

And just last week, it was revealed that Deutsche Telekom maybe had taken its recent motto “Life is for sharing” to unexpected areas of its business: confidential data of 17 million T-Mobile subscribers had been stolen in 2006 (Deutsche Telekom press release here) - and not one of the subcribers whose data was stolen had been told.

Aside from the obvious criminal aspects of the case, it might be interesting how T-Mobile would have been required to respond under the proposed new regulatory framework for electronic communications.

The Commission’s proposal for an amendment to the e-Privacy-Directive would introduce a mandatory notification to the subscribers in case of security breaches resulting in users’ personal data being lost or compromised. A new paragraph 3 would be added to Article 4 of the e-Privacy-Directive, reading:

“In case of a breach of security leading to the accidental or unlawful destruction, loss, alteration, unauthorised disclosure of or access to personal data transmitted, stored or otherwise processed in connection with the provision of publicly available communications services in the Community, the provider of publicly available electronic communications services shall, without undue delay, notify the subscriber concerned and the national regulatory authority of such a breach. The notification to the subscriber shall at least describe the nature of the breach and recommend measures to mitigate its possible negative effects. The notification to the national regulatory authority shall, in addition, describe the consequences of and the measures taken by the provider to address the breach.”

A further paragraph 4 would be added to enable the Commission to set standards for technical implementation measures regarding the notifications. In the text adopted by the European Parliament, the requirement to notify subcribers is watered down: notfication of a breach of security in general needs only to be made to the national regulatory authority, and just “in cases where there is an imminent and direct danger for consumers’ rights and interests” an immediate notification to affected users would have to be made. Of other - less serious - breaches of security, users would have to be informed annually. I am not sure how all users could be notified (I guess the EP really meant subscribers), but it’s an interesting concept: once a year, most likely with your regular bill, you receive a notice that could read:

“You still owe us € xy for your subscription, and, by the way, all your data were stolen last July. We earnestly regret to say that we have not been able to protect our customer data in line with our standards.” (the last sentence is copyright Deutsche Telekom)

*) Shakespeare, King Henry VI, Part I, Act II, Scene 1

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