“Our expectation hath this day an end”* - advocate general on Deutsche Telekom margin squeeze

Posted on April 22, 2010 | Filed Under communication technologies

Can there be a legitimate expectation that the European Commission would follow a national telecommunications regulatory authority (NRA) in its assessment of a margin squeeze situation? No, says advocate general Mazák in his opinion, delivered today in the Deutsche Telekom magenta margin squeeze case (C-280/08 P Deutsche Telekom AG) - because even though the NRA is “obliged like all organs of the State to respect the provisions of the EC Treaty”, it is not the competition authority, but responsible for regulating the telecommunications sector. The NRA decides whether an operator “satisfies the provisions of regulation” “the first barrier).

“Article 82 EC [now Article 102 TFEU] represents a second barrier and – independently of the obligation to respect the provisions of the EC Treaty imposed on [the NRA] – it falls within the competence of the relevant competition authority, in this case the Commission, to decide where necessary whether that second barrier was respected or not.”

The advocate general, after carefully exmanining the finer intricacies of margin squeeze, including the burden of proof, then comes to the conclusion that the ECJ should dismiss Deutsche Telekom’s appeal.

*) Shaekspeare, King Henry V, Act III, Scene 3

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When “I used to work in telecommunications” is not enough: US Supreme Court debates texting

Posted on April 21, 2010 | Filed Under communication technologies

Slightly off topic, but nice: Justice Scalia of the US Supreme Court used to take pride in his past experience in telecommunications (he served briefly as General Counsel in the Office of Telecommunications Policy, Executive Office of the President, in 1971-1972). In the oral argument in Bell v Twombly he tried to impress Counsel with the explicite statement: “I used to work in the field of telecommunications” (p 49 of the transcript). And of course. Scalia wrote the Court’s opinions in MCI v AT&T and Verizon v Trinko.

But today, in the argument on a privacy case, Ontario v. Quon, it showed that his telecommunications experience might not have equipped him with an understanding of how texting works. Neither Chief Justice Roberts nor Justice Scalia obviously knew that when a text message from a mobile device is sent to another mobile device, it does not go directly (without being routed over a network and processed there) to this device. Here’s an excerpt from the transcript, starting at page 48:

“CHIEF JUSTICE ROBERTS: Again, it depends upon their reasonable expectation. Do any of these other people know about Arch Wireless? Don’t they just assume that once they send something to Quon, it’s going to Quon?
MR. DAMMEIER: That’s — that is true. I mean, they expect –
CHIEF JUSTICE ROBERTS: Well, then they can’t have a reasonable expectation of privacy based on the fact that their communication is routed through a communications company.
MR. DAMMEIER: Well, they — they expect that some company, I’m sure, is going to have to be processing the delivery of this message. And –
CHIEF JUSTICE ROBERTS: Well, I didn’t — I wouldn’t think that. I thought, you know, you push a button; it goes right to the other thing.
MR. DAMMEIER: Well -
JUSTICE SCALIA: You mean it doesn’t go right to the other thing?
(Laughter.)
MR. DAMMEIER: It’s — I mean, it’s like with e-mails. When we send an e-mail, that goes through some e-mail provider, whether it be AOL or Yahoo, it it’s going through some service provider, just like when we send a letter or package, it’s going through — some provider is going to move that for us, until it gets to the recipient.
…
CHIEF JUSTICE ROBERTS: So we have to assume for your argument to succeed that they know this goes somewhere else and then it is processed and then it goes to Quon.
MR. DAMMEIER: Yes, but I think in today’s — I think in today’s society that’s — that’s a
reasonable assumption to make. One -
JUSTICE CALIA: Yeah, I didn’t know. ” (emphasis added)

The WSJ Law Blog already made fun of this (“Our Tech-Savvy Supreme Court”), as did Adam Liptak in the New York Times.

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“Be not afeard”*: costs and disincentives for number portability

Posted on April 16, 2010 | Filed Under communication technologies

Article 30 (2) of the Universal Service Directive 2002/22/EC states that “National regulatory authorities shall ensure that pricing for interconnection related to the provision of number portability is cost oriented and that direct charges to subscribers, if any, do not act as a disincentive for the use of these facilities.” (the recently adopted reform package did not change that in substance, the wording now - as amended by directive 2009/136/EC - is “that direct charges to subscribers, if any, do not act as a disincentive for subscribers against changing service provider”).

But how do you define the limit for direct charges, so that they will not act as disincentive - that subscribers will not be afeard** to change subscribers while keeping their number? Could you, for instance, just ask consumers which price they were willing to pay for the service? This is what the Polish Regulator did. And as the price charged by the mobile operator Polska Telefonia Cyfrowa sp. zoo was higher than what consumers where willing to pay, the regulator imposed a fine on the operator. In the judicial proceedings that ensued, the Polish Supreme Court asked the European Court of Justice for a preliminary ruling: “Is Article 30(2) of Directive 2002/22/EC … to be interpreted as meaning that the competent regulatory authority of a Member State, when ensuring that direct charges to subscribers do not act as a disincentive for the use of the additional facility of porting numbers, has an obligation to take account of the costs incurred by mobile telephone network operators in providing that facility?”

In this Case C-99/09 Polska Telefonia Cyfrowa v. UKE, advocate general Bot delivered his opinion (not yet available in English) on 15 April 2010. His conclusion is that when national regulatory authorities have to decide whether direct charges act as a disincentive to subscribers, they have to take into account - in a manner they see fit [”de la manière qu’elles jugent la plus appropriée”] - the costs that are incurred in connection with number portability.

The conclusion may not be surprising, even if in some member states operators currently are not allowed to charge anything to the subscriber wishing to change operator (advocate general Bot thinks - cf paragraph 72 of his opinion - that such a requirement is not compatible with the directive). What is more surprising, at least to me, is how the advocate general gets to his conclusion: by seeking and finding “principles” for price regulation in telecommunications directives starting with the ONP-framework directive 90/387/EEC (!), which is of course not in force any more and did not set any principles for enduser tariffs. But this does not matter to the advocate general, who also refers to several other historic directives as well, and also to the judgment of the ECJ in the case C-152/07 - 154/07, Arcor ao (which dealt with issues concerning the old ONP-interconnection directive and the ONP-competition directive).

I am less than convinced that just because at different times in telecommunication regulatory history there were (different) approaches to cost oriented tariffs, the “direct charges” for number portability also have to take costs into account, even though in the wording of Article 30 this is not explicitely expressed. It may well be so, but I’d like to see a reasoning more to the point [and by the way: the death of advocate general Colomer and the end of term for advocate general Poiares Maduro mean that the ECJ lost two AGs that were well versed in telecommunications law].

On the other hand, of course, defining the threshold of a “disincentive” just by taking a consumer survey hardly seems to satisfy a rule of law-concept, especially if fines are imposed on operators whose charges are above the average “disincentive-threshold”. The advocate general spells that out very clearly in paragraphs 61 to 69 of his opinion.

What I find interesting is the repeatedely emphasized “margin of appreciation” of the regulatory authority (”marge d’appréciation”, paragraphs 30, 39, 41, 53), which should not be confused with its discretionary power (”pouvoir discrétionnaire”), as the advocate general points out in paragraph 54. I am quite sure we will see more of these margin of appreciation/discretion-issues in the future.

*) Shakespeare, The Tempest, Act III, Scene 2.

**) As I do not know any Shakespeare text using the word “disincentive”, I had to stick with “afeard” for my title-quote.

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Codified version of the AVMS-Directive published

Posted on April 15, 2010 | Filed Under digital content

Just briefly: the codified version of the Audiovisual Media Services Directive was published in today’s Official Journal. Full title: “Directive 2010/13/EU of the European Parliament and of the Council of 10 March 2010 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services (Audiovisual Media Services Directive)“.

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Conference notice: What comes Next in Electronic Communications?

Posted on April 15, 2010 | Filed Under communication technologies

I have been asked to “advertise” (not commercially, of course - this blog is ad-free) a conference on the new EU regulatory framework for electronic communications, taking place on 30 April 2010 in Brussels: “What comes Next in Electronic Communications? A Review of the New EU Framework“, organized by the Institute for European Legal Studies (IEJE) of the University of Liège. Speakers include for instance John Doherty, ComReg-Commissioner and BEREC-Chairman, Nicolas Petit (who is also a blogger at Professor Gerardin’s blog) and Laurent De Muyter (who is also a blogger - just be careful accessing his site, as it is sporting the possibly longest disclaimer in the blawgosphere with over a thousand words ;-)  ). The registration form can also be found in this pdf-file (wouldn’t it be good for a conference to have more information, fully linked for instance with the speakers’ CVs etc, at a website?).

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