The EU Licensing Directives

The 1997 EU Licensing Directives provides a detailed framework for telecommunications licensing in Europe. This framework is consistent with the WTO commitments of the EU; the Directive provides a good approach for other countries to consider in developing their own licensing regimes.

EU has recently published a proposal for a new licensing Directive (Proposal for a Directive on the authorisation of electronic communications networks and services, 12 July 2000). However, as discussed below, this new proposal largely represents a renewed effort to implement the harmonised and deregulatory approach set out in the 1997 Directive. Therefore, we will focus on the 1997 Directive below.

 

Box 2-1:

Licensing Rules in WTO Regulation Reference Paper

Commitments on Licensing Process:

Public Availability of Licensing Criteria Where the license is required, the following shall be made publicly available: All the licensing criteria and the period of time normally required to reach a decision concerning an application for a license The terms and conditions of individual licenses The reasons for the denial of a license will be known to the applicant upon request.

Allocation and Use of Scarce Resources Any procedures for the allocation and use of scarce resources, including frequencies, numbers and rights of way, will be carried out in an objective, timely, transparent and non-discriminatory manner. The current state of allocated frequency bands will be made publicly available, but detailed identification of frequencies allocated for specific government uses is not required.

The objectives of the EU in adopting the Directive are set out in Box 2-2.

The directives encourage the use of general authorisations, which the British refer to as class licenses. The proposed use for individual licenses is restricted to public voice telephony and services using scarce resources. Conditions of general authorisations should be limited to those relating to essential requirements. The contents of this type of condition are described in Box 2-3. The license conditions and eligibility criteria for general authorisations are to be published by the licensing authority. Any person who meets the criteria will be authorised to provide service without any further selection process, regulatory decision or individual licensing requirement.

Under the 1997 Licensing Directive, restrictions are also placed on the types of conditions that may be applied to individual licenses. These conditions are described in Box 2-4. Specific provisions of the Directive relating to the form and content of licenses are discussed in more detail later in this Module.

In its July 2000 proposal for a new Licensing Directive, the European Commission renewed its efforts to harmonise and reduce European licensing requirements. Although the 1997 Licensing Directive gives priority to general authorisation, the EC determined that it still leaves too wide a margin for a Member State to use individual licenses. In fact, the EC found that individual licenses have become the rule rather than the exception in most European national licensing regimes. In order to further promote market entry, the EC's July 2000 proposal would cover all services and networks under a general authorisation scheme, and would limit the use of individual licenses to the assignment of radio frequencies and numbers only. The proposed directive would also further limit the number of conditions that may be imposed on service providers. It requires strict separation between conditions established under general law (applicable to all operators), conditions under the general authorisation and conditions attached to individual licenses.

Box 2-2:

EU Licensing Objectives

Objectives of the 1997 EU Licensing Directives To extend competition in telecommunications markets by means of licensing regime which: Eliminates all barriers to entry except for objectives, transparent, non-discriminatory and proportionate restrictions relating to the availability of scarce resources, such as numbers, spectrum and right of way Simplifies and harmonise licensing processes across the EU Establishes license conditions that are transparent and constitute "the lightest possible regulation, compatible with the fulfilment of applicable requirements"

The EU's July 2000 proposal aims to ensure that no information is required as a prior condition for market entry. It also places limits on subsequent verifications of compliance with conditions. In addition, the proposed Directive would reduce administration charges considerably, and would require regulators to publish annual overviews of costs and charges. If charges collected by regulators would be required to adjust the level of charges the following year.

Learning Activity

Compare the items listed below as explained in the text to that of your local telecommunications regulatory authority and explain in not less than 1000 words detail:

a) the licensing objectives

b) the types of licensing regimes