LeX-Ray

Commission Directive 1988/301 of 16 May 1988 on competition in the markets in telecommunications terminal equipment ( 1 ) has been substantially amended ( 2 ) . In the interests of clarity and rationality the said Directive should be codified.

In all the Member States, telecommunications were, either wholly or partly, a State monopoly generally granted in the form of special or exclusive rights to one or more bodies responsible for providing and operating the network infrastructure and related services. Those rights, however, often used to go beyond the provision of network utilisation services and used to extend to the supply of user terminal equipment for connection to the network. The last decades have seen considerable technical developments in networks, and the pace of development has been especially striking in the area of terminal equipment.

Member States have, in response to technical and economic developments, reviewed their grant of special or exclusive rights in the telecommunications sector. The proliferation of types of terminal equipment and the possibility of the multiple use of terminals means that users must be allowed a free choice between the various types of equipment available if they are to benefit fully from the technological advances made in the sector.

The existence of exclusive rights has the effect of restricting the free movement of telecommunications terminal equipment either as regards the importation and marketing of terminal equipment (including satellite equipment), because certain products are not marketed, or as regards the connection, bringing into service or maintenance because, taking into account the characteristics of the market and in particular the diversity and technical nature of the products, a monopoly has no incentive to provide these services in relation to products which it has not marketed or imported, nor to align its prices on costs, since there is no threat of competition from new entrants on the market. Taking into account the fact that in most equipment markets there is typically a large range of telecommunication equipment, any special right which directly or indirectly limits the number of the undertakings authorised to import, market, connect, bring into service and maintain such equipment, is liable to have the same kind of effect as the grant of exclusive rights. Such exclusive or special rights constitute measures having equivalent effect to quantitative restrictions incompatible with Article 28 of the Treaty. Thus it is necessary to abolish all existing exclusive rights in the importation, marketing, connection, bringing into service and maintenance of terminal and telecommunications equipment, as well as those rights having comparable effects — that is to say, all special rights except those consisting in legal or regulatory advantages conferred on one or more undertakings and affecting only the ability of other undertakings to engage in any of the abovementioned activities in the same geographical area under substantially equivalent conditions.

The special or exclusive rights relating to terminal equipment are exercised in such a way as, in practice, to disadvantage equipment from other Member States, notably by preventing users from freely choosing the equipment that best suits their needs in terms of price and quality, regardless of its origin. The exercise of these rights is therefore not compatible with Article 31 of the Treaty in all the Member States.

The provision of installation and maintenance services is a key factor in the purchasing or rental of terminal equipment. The retention of exclusive rights in this field would be tantamount to retention of exclusive marketing rights. Such rights must therefore also be abolished if the abolition of exclusive importing and marketing rights is to have any practical effect.

The maintenance of terminal equipment is a service within the meaning of Article 50 of the Treaty. The service in question, which cannot from a commercial point of view be dissociated from the marketing of the equipment terminals, must be provided freely in accordance with Article 49 of the Treaty and in particular when provided by qualified operators.

The situation in the market continues to produce infringements of the competition rules laid down by the Treaty and to affect adversely the development of trade to such an extent as would be contrary to the interests of the Community. Stronger competition in the terminal equipment market requires the introduction of transparent technical specifications which meet the essential requirements mentioned in Directive 1999/5 of 9 March 1999 on radio equipment and telecommunications terminal equipment and the mutual recognition of their conformity ( 3 ) and allow the free movement of terminal equipment. In turn, such transparency necessarily entails the publication of technical specifications.

Special or exclusive rights to import and market terminal equipment give rise to a situation which is contrary to the objective of Article 3(g) of the Treaty, which provides for the institution of a system ensuring that competition in the internal market is not distorted, and requires a fortiori that competition must not be eliminated. Member States have an obligation under Article 10 of the Treaty to abstain from any measure which could jeopardise the attainment of the objectives of the Treaty, including Article 3(g). The exclusive rights must therefore be regarded as incompatible with Article 82 of the Treaty in conjunction with Article 3 thereof, and the grant or maintenance of such rights by a Member State is prohibited under Article 86(1) of the Treaty.

To enable users to have access to the terminal equipment of their choice, it is necessary to know and make transparent the characteristics of the interface points of the public network to which the terminal equipment is to be connected. Member States must therefore ensure that the characteristics are published and that users have access to interface points of the public network.

To be able to market their products, manufacturers of terminal equipment must know what technical specifications they must satisfy. Member States should therefore formalise and publish the specifications, which they must notify to the Commission in draft form, in accordance with Directive 1998/34 of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations ( 4 ) . The specifications may be extended to products imported from other Member States only in so far as they are necessary to ensure conformity with the essential requirements specified in Article 3 of Directive 1999/5 that can legitimately be required under Community law. Member States must, in any event, comply with Articles 28 and 30 of the Treaty, under which an importing Member State must allow terminal equipment legally manufactured and marketed in another Member State.

To ensure that type-approval specifications are applied transparently, objectively and without discrimination monitoring applications cannot be entrusted to a competitor in the terminal equipment market in view of the obvious conflict of interest. Member States should therefore ensure that the responsibility for monitoring is assigned to a body independent of the operator of the network and of any other competitor in the market in question.

This Directive should be without prejudice to the obligations of the Member States relating to the time limits for transposition into national law of the Directives set out in Annex II, Part B,