Update: new ERG Roaming-Report

Posted on January 29, 2009 | Filed Under communication technologies

_mz2.jpgAbout a year ago, the European Regulators Group (ERG) published a first benchmark report on international roaming. In this earlier post - where I thought European Monitors Group might be a more appropriate name for the ERG - I pointed out that even in the accompanying ERG guidelines on the “International Roaming Regulation” there was little guidance; especially in the matter of “billable minutes”, the ERG thought it best to leave it to the market players “to adopt a convenient charging interval” (of course, in the ERG’s understanding, only the operators are “market players” - or could it be left to the consumers to chose a charging interval that might be convenient for them?).

So what’s new in the new (third) Roaming-Report that the ERG published this week? Not much: the prices for the regulated voice calls (retail and wholesale) surprisingly almost exactly match the upper limits set in the Regulation (or are just a tiny bit below these limits). And as for the charging interval?

“There is also an indication that Eurotariff voice minutes billed exceeded actual elapsed minutes by a significant margin (typically 25% at the retail level for calls made and 19% for call received) as a consequence of the practice of many providers of using charging intervals of more then one second.”

Just an indication??? Does that mean the ERG is still not really sure about that? It might be, or it might not be? What have they been monitoring? I think the ERG could be satisfied with its success: after all, the operators followed excactly the ERG’s guidance and picked a convenient charging interval.

But the report does not only provide information on voice calls, it also looks at SMS and data roaming. Whereas prices for SMS were stable, the cost of data roaming has significantly decreased over the past year. However, as the ERG points out, “it is not yet clear how effective these [market] forces will be in further reducing prices in future, especially in some countries. … ERG also noted that it would be difficult to assess the extent to which threats of regulatory intervention hadstimulated the price cuts.”

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“I subscribe in silence”*: ECJ on the definition of “subscriber”

Posted on January 22, 2009 | Filed Under communication technologies

In today’s judgment in the case C-492/07 Commission v. Poland (currently only available in French and Polish), the European Court of Justice held that Poland had not correctly implemented the definition of “subscriber” as it is found in Art 2 (k) of the Framework Directive 2002/21/EC. “Subscriber” according to this definition “means any natural person or legal entity who or which is party to a contract with the provider of publicly available electronic communications services for the supply of such services”. The definition in Poland’s Telecommunications Act was almost identical - except that it demanded “a written contract” instead of just “a contract”.

The Commission argued that by requiring a written contract, users without such a contract (mainly users of pre paid-mobile phones) were being denied the rights awarded to them in the regulatory framework for electronic communications (as the definition of subscriber is also relevant for the universal service directive, the authorisation directive, the access directive and the e-privacy directive). Poland claimed that to give these rights (such as the right to itemized billing) to users of pre paid phones was technically not possible.

The ECJ followed the Commission’s line. It stated that users of pre paid-phones could renounce their anonymity and thus wish to benefit from the rights given to them in the directives, even if no written contract exists. 

*) Shakespeare, King Henry VI, Part I, Act II, Scene 4

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“The law … will give him cable”*: ECJ on “must carry” in cable networks

Posted on January 13, 2009 | Filed Under communication technologies, digital content

Cable-TV was at the heart of another ECJ judgment that was handed down on 22 December 2008: C-336/07 Kabel Deutschland. And although the directive that the Court had been called upon to interpret - the Universal Service Directive 2002/22/EC - belongs to the world of “infrastructure” (electronic communications networks and services), the main conclusions that can be drawn from the judgment will be for the “content” side.

The case originated in Germany’s complicated system of deciding which programmes have to be carried by cable-tv operators. The Land of Lower Saxony required cable tv-operators to use 18 (!) of their available 32 analogue channels to carry programmes that were also distributed via digital terrestrial tv (although not in all parts of Lower Saxony). One channel had to be set aside for citizens’ tv, and for the remaining channels, the regulatory authority “established an order of priority”. Not surprisingly, a cable operator questioned whether this heavy regulation was compatible with Art 31 of the Universal Service Directive.

The Court established that the basic requirements of that article - “the television channels must be specified and a significant number of end-users must use the electronic communications networks as their principal means to receive television broadcasts” - were met:

  • Transmission on the analogue cable network covers around 57% of households in Germany “and thus constitutes the most widely-used means of transmission.”
  • As regards “the specified nature of the channels which may be covered by ‘must carry’ status,” the Court held that the “mere fact that the result of applying the national legislation is that the cable operator is required, first, to provide access, on more than half of the available channels, to programmes broadcast terrestrially, and, secondly, to set aside all channels still available on its network for transmission of the selected programmes, in accordance with an order of priority established by the competent authority, does not prevent those obligations from being regarded as relating to the transmission of ‘specified’ television channels within the meaning of Article 31(1) of the Universal Service Directive. By requiring that the television channels to be broadcast be ‘specified’, the directive does not seek to lay down a quantitative condition.”

And then the Court sets out ot clarify the distinction “between the regulation of transmission and the regulation of content.” Citing article 1(3) and the fifth recital of the Framework Directive 2002/21/EC, the Court notes that the Community regulatory framework does not cover broadcasting content. The Universal Service Directive is without prejudice to measures taken at national level, in compliance with Community law, to pursue general interest objectives, in particular relating to content regulation and audio-visual policy. In Nr. 33 to 37, the Court holds:

“33      In particular, it is appropriate to stress the importance of the fundamental freedom to receive information of which the recipients are end-users and which the Member States must guarantee, in accordance with Article 10 of the European Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950.
34      It follows that Article 31(1) of the Universal Service Directive cannot be interpreted so as to undermine national legislation which, in compliance with Community law, pursues general interest objectives, in particular those relating to regulation of content and audio-visual policy. In accordance with that division of powers, Article 31(1) of the Universal Service Directive, which falls under Chapter IV thereof, entitled ‘End-user interests and rights’, does not establish a right for a cable operator to choose which channels to broadcast, but limits that right in so far as it may exist under applicable national law.
35      In order to examine whether the obligations to broadcast under Article 31(1) are proportionate, it must be stated that, as regards the general interest objectives pursued by the national legislation at issue in the main proceedings, it is apparent … that this legislation seeks to ensure media pluralism and diversity of the service on the analogue cable network. …
37      In that regard, it should be noted that the maintenance of the pluralism which the legislation in question seeks to guarantee is connected with freedom of expression, as protected by Article 10 of the European Convention on Human Rights and Fundamental Freedoms, which freedom is one of the fundamental rights guaranteed by the Community legal order …”

It is for the national court then to determine whether the obligations are unreasonable because they are likely to prevent the cable operator from performing them in conditions which are economically acceptable. It is also for the national court to ascertain whether the obligations imposed are such as to make the payment of remuneration to the cable operator necessary.

As the German legislation makes a distinction between “telemedia services” and broadcasting, the Court - with a reference to the definition of “television broadcasting services” under the Television Without Frontiers-Directive - also holds that the concept of “television services” within the meaning of Article 31(1) of Directive 2002/22/EC includes services of television broadcasters or providers of media services, such as teleshopping, provided that the conditions laid down in that provision are met, which again is a matter for the national court to establish. So even teleshopping channels could be “must carry”-channels, if a member state can think of a public interest objective (language, culture, whatever). At any rate, the ECJ draws a strict line between infrastructure and content regulation and seems very determined to avoid any appearance of interfering with member states’ decisions in audiovisual policy.

*) Shakespeare, Othello, Act I, Scene 2 (Full sentence: “The law, with all his might to enforce it on, will give him cable.”)

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“gone to France for aid”*: ECJ voids state aid scheme for French local broadcasters

Posted on January 12, 2009 | Filed Under communication technologies, competition/mergers/state aid

Catching up on December’s ECJ judgements, here is a quick note on a broadcasting-related case: in the judgment delivered on 22 December 2008 in the Case C-333/07 Régie Networks, the Court declared the Commission’s decision of 10 November 1997 not to raise any objections to the new version of an aid scheme to support local radio stations (State aid No N 679/97 – France) invalid. However, the Court also suspended the effects of this declaration, pending the adoption of a new decision by the Commission under Article 88 EC.

Under the aid scheme local radio stations that derived less than 20% of their revenue from advertising and sponsoring were eligible for aid (a “setting-up grant”, equipment aid, and an annual operating grant). To fund that aid, a charge was levied on the revenue from advertisements broadcast on (commercial) radio and television. Régie networks, a company selling advertising space for the NRJ GROUP’s local radio stations, claimed reimbursement for the charges it had paid, and the Administrative Court of Appeal of Lyonrequested a preliminary ruling. The ECJ stated that:

“94 Where a charge constitutes the means by which an aid scheme such as that at issue in the main proceedings is financed, it is clearly in the Community interest that the Member State notifies that scheme, including the method of financing which forms an integral part of it, so that the Commission may have available to it all the information necessary to assess the compatibility of that measure with the common market, an assessment which falls within its exclusive competence, subject to review by the Community judicature (see to that effect, inter alia, Case C‑119/05 Lucchini [2007] ECR I‑6199, paragraph 52 and the case‑law cited). …
112 It must be concluded from the above that the charge on advertising companies forms an integral part of the radio broadcasting aid scheme which that charge is intended to finance.
113 Accordingly, the Commission should have taken that charge into account when it examined the aid scheme in question, namely following notification of that scheme, at the preliminary stage of the procedure for reviewing aid under Article 93(3) of the EC Treaty.
114 It is not in dispute that, while the method by which the scheme was financed was indeed notified to the Commission, … the Commission did not review it in the course of the procedure which concluded with the adoption of the contested decision. …
116 Since, for the purpose of assessing whether the aid scheme in question was compatible with the rules of the Treaty on State aid, the Commission failed to take account of the method by which that aid was financed, even though it formed an integral part of that scheme, its assessment of the compatibility of that scheme with the common market is necessarily vitiated by an error.”

I have not yet looked into the new French regime for compensating the public service broadcaster for loss of advertising revenue under the rules that came into effect a few days ago (see e.g. this press report). I wonder whether the Régie Networks case might have some implications for the planned taxes or charges (on commercial TV advertising and on internet and telephone providers), that are to be introduced to raise the necessary €450 million in 2009, making up for the public service broadcaster’s loss of advertising revenue.

*) Shakespeare, King Henry VI, Part III, Act III, Scene 1

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“O, make them joyful, grant their lawful suit!”*: Top 3 pending cases at the ECJ

Posted on January 7, 2009 | Filed Under communication technologies

Around New Year, “TOP 3″ (10, 100, whatever) lists pop up all around the blogosphere and the old/new media. So instead of just providing you with the updated version of our list of pending telecoms- and broadcasting-cases to watch out for at the ECJ and CFI (earlier update here), why not make it a TOP 3-list? So here they are, the top cases where we expect ECJ decisions any time this year:

At number three, a competition case: C-202/07 P France Télécom v. Commission, concerning predatory pricing practices for wholesale broadband products, dating back to 2001. The Court of First Instance had upheld the Commission’s decision against France Télécom, including a fine of around 10 Million Euro; but the advocate general found fault in the CFI’s reasoning (see here). If the Court follows the advocate general, this would highlight the limits of general competition law when dealing with presumed predatory pricing in the telecoms sector (where the the possibility to recoup losses now seems rather difficult to prove). Still more interesting will be ECJ’s decision on the appeal of Deutsche Telekom in the margin squeeze-case C-280/08 P Deutsche Telekom; however, I am not sure this case will be decided still in 2009.

At number two, the regulatory holidays: C-424/07 Commission v. Germany is a case of a highly symbolic nature, probably more than of real practical importance. We have not yet seen an advocate general’s opinion in this case, but still I expect it to be decided in 2009 (the hearing before the Court is set for 5 February 2009). Commissioner Reding has fought hard against efforts by Member States to encroach on the powers of the national regulatory authorities (not always with full success, see C-387/06 Commission v. Finland, blog-post here, and C-227/07 Commission v.  Poland), and the German defiance seems to have motivated her most. At an official speech two years ago, she even called the German arguments for their regulatory holiday-proposal (limiting the powers of the NRA in emerging markets) “eines wahren Winkeladvokaten würdig” (”worthy of a real shyster”). The proposal was watered down, but not as far as to win the approval of the Commission, for which it is an important issue of prinicple. So we can look forward to a decision that will, whatever the outcome, be hotly debated in the “regulatory community”. (Update: the advocate general’s opinion will be delivered an 23 April2009)

And at number one, of course, the data retention directive: C-301/06 Ireland v. Council and European Parliament is the oldest relevant case in the field of telecommunications and/or broadcasting now pending at the ECJ, the advocate general’s opinion was delivered on 14 Oct 2008 (see here), so a decision of the Court is to be expected any time soon (update: judgment will be delivered on 10 February 2009). After the advocate general’s opinion, annulment of the directive does not seem very likely, but one cannot be certain until the decision is handed down. [update 11.02.2009: now we are certain - the ECJ followed the advocate general’s opinion, see here]

So that’s it - no broadcasting case made it to the top 3-list; closest candidate would be the case C-222/07 UTECA, where I expect the Court to follow the advocate general’s line of trying not to interfere with Member States’ policy decisions for promoting audiovisual content, as long as they do not lead to internal market barriers (update 06 March 2009: expectation fulfilled - see here).

*) Shakespeare, King Richard III, Act III, Scene 7

PS: The full list of pending cases is below the break:

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