EC Praises Luxembourg For Telecoms Action

by Ulrika Lomas, for LawAndTax-News.com, Brussels

03 July 2007

The European Commission announced last week that it has closed an infringement procedure against Luxembourg, initiated as a result of the government's failure to comply with a Court of Justice judgement concerning the Luxembourg telecommunications markets.

In January 2007, the Commission asked Luxembourg to comply with a Court of Justice ruling of 12 June 2003, confirming that Luxembourg had failed to fully transpose Directive 90/388/CEE on competition in the markets for telecommunication services into national law.

Following the adoption of two regulations establishing transparent access conditions for new operators, the Commission considers that Luxembourg now complies with EU law.

Competition Commissioner Neelie Kroes observed that:

"It is in every Member State's interest to enact clear rules and procedures for potential market entrants and so attract investment and employment. I am satisfied that Luxembourg has now a clear framework for obtaining the necessary permits. The ball is now in the market entrants' court."

Explaining the reasoning behind the now closed infringement procedure against the Luxembourg authorities, the Commission stated that:

"Effective competition in the telecommunications sector is only possible if network competition is made possible. This implies that new entrants can obtain the necessary permits ("rights of way") to roll out their infrastructure alongside roads and railways. Since rolling out a network is a costly process and requires careful planning, new entrants need clear procedures and deadlines in order to be able to plan their investments ahead."

"Without rights of way, network competition is not possible. When the EU telecommunications markets were opened to competition in 1998 through the Directive on Telecommunications Services (90/388/CEE as amended by Directive 96/19/EC, the Member States were required to introduce objective, non-discriminatory and transparent procedures for granting rights of way, to enable competitors of incumbent operators to obtain the permits needed to roll out their networks on the public domain alongside highways or railroads."

"Following a complaint by a market entrant, the Commission opened a first infringement procedure under Article 226 of the EC Treaty and referred Luxembourg to Court for failure to implement the Telecommunications Directive into national law...The Court of Justice ruled on 12 June 2003 that Luxembourg had failed to put in place transparent and non-discriminatory procedures for obtaining rights of way."

"On 16 December 2006...the Commission formally requested Luxembourg to comply with the Court ruling in a second infringement procedure under Article 228 of the EC Treaty."

"By adopting the two new regulations establishing transparent conditions of access to the public domain for all telecommunications operators, with a view to roll-out their network, the Commission is satisfied that Luxembourg finally complies with the judgment of the Court."

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