European concepts of Universal service

Paul NihoulLouvain (Be), Groningen (Nl)

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I. Introduction

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•« European »

Yes ./. Member States Concept does not exist at national level – maybe UK ?

No otherwise Europe, public services, public ownership, « no

regulation », no need for universal service, instructions to board of directors

US, « same services », private ownership, public involvement, regulation, universal service

Example : AT&T European universal serviceY= going American

application, in Europe, of a concept originating in the US

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« Concepts »

One concept … Meaning

Availability of a service To all members of a community At reasonable + equal conditions

Cause deemed essential to that community

Variation in time and space

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… But not an easy one Terminology Polyphony Interdisciplinarity

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Terminology Communication 1996

Universal service Public service Service of general (economic or non economic)

interest

Afterwards « Ambiguity » continues SIG used in case law SU in some regulations Public service in others

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Polyphony Several speakers Commission : liberalisation

Art. 86 EC Directive 1996 Communications 1996, 2003

Parliament/Council : ONP 90/387 as amended

ECJ On regulation Or on EC Ttreaty

« universal service without a name » Corbeau, Glöckner

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Interdisciplinarity, several sectors

Telecom > electronic communications

Postal services Energy? Transportation? « public utilities »

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…

« interdisciplinarity » Public utilities

Electronic communications postal services Energy ? Transportation ?

Social security Health Pensions Invalidity, etc.

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II. Universal service

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Electronic communications

Current situation - One directive – Mechanism

Step 1.- Definition of services which must be made available to all members of a community at certain conditions

What are they ? Can the list evolve ? Role of Member States

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…

Step 2.- Who will ensure their provision ? Market forces If not, authorities

Step 3.- How will they act ? Market forces : free markets Authorities :

Designation of undertakings Subsidies : authority, fund

Step 4.- How do they have to be performed ?

Quality Prices

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Postal services

97/67 as amended lately What is the US in that sector ?

3 and 5

Content ? 3.3 and 3.4

How will it be provided ? …

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Until 2008 Non universal service activities

Activities = free, general authorisations

Universal service activities Some cannot be reserved, g.a. or individual

licences Some can

Division of activities in 3 categories

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Now Non universal service activities

Activities = free, general authorisations

Universal service activities general authorisations, individual licences

possible

> Division of activities in 2 categories

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Other sectors

Public service obligations Electricity Gas Transportation

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III. Peculiarities

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« Revolution »

Beforehand The authority as source of all activities « Fiefs »

Summa divisio One part for markets, economic rules One part for authority, political rules

Change The part of authorities is opened to markets

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« New articulation Markets-Authorities »

Market failure Economic theory Markets first, authorities only if former fails

(subsidiarity) Universal service

Legal theory Authority first*, Markets second**, authorities third***

* Define services covered by the regime and conditions under which they must be provided : who ? Quality ? Prices

** provision *** Where not provided satisfactorily by markets

Authorities decide Authorities « provide » (designation, subsidy)

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« LDP » No relation to « P » : privatisation

Public undertakings still possible Submitted to the rules of competition Derogation if SGEI – to the same extent as private firms

No relation to « D » : deregulation Beforehand : public monopolies

one firm > no need to organise markets Public ownership > no need for regulation

Now : private firms Several firms > instruction to board Private ownership > need for regulation

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…

Relation to « L » : liberalisation Suppression of monopolies Abolition legal barriers to entry Diminution economic barriers to entry More firms carrying out activities at market

conditions Need for authorities to determine objectives

it wants to pursue in terms of accessibility of service

Universal service Cqfd : liberalisation => universal service

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« The issue of monopoly »

EC Treaty, 86 « GI » : general interest « E » : economic

« Conflict of rules » Internal market, service <= remuneration Competition, service = economic activity, no

remuneration requested

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./. SGIs Is there a universal service for SIGs : « Services of general (non economic) interest »?

Activities which are not economic in nature Case law 1.- Prerogative of sovereignty : police, army 2.- Solidarity essentiel : social security

These activities are, by nature, governed by the concept of universal service

Available to everyone at reasonable and equal conditions

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./. SGEIs

(a) ECJ Corbeau, Gl¨ckner « supplier must provide service to everybody

at derogatory conditions » These derogatory conditions may be financed

through monopoly On the relevant market : « Glöckner », « Afval », social security cases

On adjacent markets : « Corbeau »

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(b) regulation Derogatory conditions, financing ? Electronic communications

1.- auction Least asking undertaking

2. Subsidy Public budget or authority administered budget Extent of subsidy

communication, decision, state aid provisions

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… Postal directive

7, 4.2.

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… Compatibility between both ?

Regulated sectors Designated undertakings may not have an

exclusive right So much the better if other firms provide

service without subsidy

Non regulated sectors Firms may jhave an exclusive right to the

extent necessary of conditions 86 EC are fulfilled