ECJ: the holiday season is coming

Posted on June 22, 2007 | Filed Under communication technologies 

justice “Regulatory holidays” meet judicial vacation: while the European Court of Justice has just published the schedule for the remaining three weeks before retreating for judicial vacation (from 16/07/2007 until 02/09/2007), the European Commission is getting ready to bring the German “regulatory holidays” to the Court before the summer. The deadline set by the Commission in its reasoned opinion has now expired, and Germany is definitely not going to amend its Telecommunications Act. So within the next few days, the Commission is expected to file infringement proceedings with the ECJ.

In the Commission’s view, Section 9a of the German Telecommunications Act as amended in February 2007 violates Community law (German Text here, the English version of the Act available from the server of the Federal Ministry of Economy and Technology has not yet been updated to include the amendment). Under the headline “new markets”, Section 9a states that “new markets” in principle are not subject to regulation. New markets are defined as markets for services or products that differ substantially (in fact the text says “not just insubstantially”) from services and products that were already available and which do not merely replace them. Without explicitely stating it, the definition was drawn up with VDSL-roll out of the Deutsche Telekom in mind. Deutsche Telekom has repeatedly threatened it would not invest in new infrastructure for VDSL if it isn’t granted a “regulatory holiday”, meaning there would not be any mandated access for third parties or regulated wholesale or retail prices. The text of the amendment as it was finally adopted tried to reduce the fear of alternative operators and also of the Commission that there would not be any regulation under any circumstance. So the Act now states that the markets could be regulated if otherwise the development of a competitive market would be strongly obstructed. Still, at least outside Germany, it is hard to see how the Act can be reconciled with the provisions of the Framework and Access directives, which basically state that the national regulatory authorities have to have the full range of regulatory options as provided for in these directives available - without interference from the legislator.

We will see - after the (judicial) holidays. Before the Court will retreat, we can look forward to decisions on the VAT with regard to the UMTS-auctions and to two opinions of the Advocate General:

On 26 June 2007 the Grand Chamber will serve the decisions in the cases C-369/04 Hutchison 3G and Others and C-284/04 T-Mobile Austria and Others, both dealing not with questions of the electronic communications directives, but rather with value added taxes. The issue is basically whether or not the allocation of spectrum to the operators should be subject to VAT.

On 28 June 2007 the Advocate General will deliver the opinion in the case C-262/06 Deutsche Telekom, on questions of the transitory regime.

And finally, on 18 July 2007, the Advocate General will present the opinion in the case C-55/06 Arcor, on questions concerning cost orientation under the Regulation (EC) No 2887/2000 (Unbundling Regulation).

Most notably missing in the list of cases to be decided before the judicial vacation is the case C-426/05 Tele2UTA, concerning the legal standing of other operators in market analysis-cases before the national regulatory authorities. We’ll have to wait a few more months before this issue will be clarified by the Court.

About this Post
author: hans peter | Permalink | | Print This Article |


Comments

6 Responses to “ECJ: the holiday season is coming”

  1. Penco Kuzev on July 30th, 2007 1:30 am

    Definitely cool site… Do you know how I can find the reasoned opinion of the Commission for the „regulatory holiday”- case?

  2. hans peter on July 30th, 2007 10:02 am

    The Commission’s policy is not to publish the reasoned opinions - so I am afraid there is no official way to get hold of it.

  3. simon muys on August 9th, 2007 3:23 am

    Great summary. Thanks. Is there somewhere I can get a full English translation of the new section 9a?

  4. hans peter on August 9th, 2007 3:13 pm

    Simon,
    It is interesting to note that the German Federal Ministry of Economics published an English text of the Telecommunications Act 2004 in the original version (here: http://www.bmwi.de/BMWi/Redaktion/PDF/Gesetz/telekommunkationsgesetz-en,property=pdf,bereich=bmwi,sprache=de,rwb=true.pdf), but no translation of the amendment. I am sure the Commission services have a perfect translation, but I am not aware of it being available on the web.
    Being on holidays myself, I have no access to further information, but I can give you a rough translation of section 9a as follows:
    “Section 9a New Markets
    (1) Subject to the provisions of the following paragraph, new markets in principle are not subject to regulation according to part 2 [of the Telecommunications Act]
    (2) If facts warrant the assumption that in the absence of regulation the development of markets with sustainable competition in telecommunications services and networks will be precluded in the long run, the Bundesnetzagentur [national regulatory authrority] may – notwithstanding paragraph 1 – subject, according to sections 9, 10, 11 and 12, a new market to regulation according to part 2. In evaluating the need for regulation and the imposition of remedies, the Bundesnetzagentur takes the aim of encouraging efficient investment in infrastructure and promoting innovation particularly into account.”

    This section has to be read together with section 3, number 12b, of the Telecommunications Act, defining a “new market” as a market for services and products, which - from a prudential demand-side viewpoint - differ substantially (in fact the text says: “not just insubstantially”) from existing services and products with regard to performance, reach, availability for a large number of users, price or quality, and do not merely replace them.

    Again, this is a rough translation, but I hope it is of help to you.

  5. Cases to watch out for at the ECJ (another update) : contentandcarrier on October 3rd, 2007 12:37 am

    […] As I promised then, this blog kept you updated as these cases evolved (see for instance here, here and […]

  6. “Thus hath the course of justice wheel’d about”*: decided cases : contentandcarrier on December 3rd, 2009 7:43 pm

    […] effectively declared “regulatory holidays” for “new markets” (more details here). I have blogged about the case before here and on the opinion of the advocate general […]

Leave a Reply