Regulators without Frontiers? European Regulators Group for Audiovisual Media Services (ERGA) and the Audiovisual and Media Services Directive 2.0

Professor Lorna Woods, University of Essex

The European Commission established ERGA, by a Decision in 2014, to facilitate the implementation of the Audiovisual Media Services Directive (AVMSD, or Directive 2010/13/EU) and thus further the internal market.  This seems to have been a development of the High Level Group of Regulatory Authorities, which was organised by the Commission (its inaugural meeting was 27 March 2003) and brought together the Member State authorities responsible for the enforcement in this field for twice yearly meetings. The aim was to reinforce cooperation between national regulatory authorities with the aim of ensuring the consistent application of the AVMSD.  It may be seen as forming part of a trend at EU level to create networks – even those involving Member State actors – to support or even intensify harmonisation. As such they may be part of a shift away from decentralised enforcement to a more centralised approach.  Such a development is by no means certain, but it suggests that discussions about the role and powers of any such body has a more than technical significance.

The Decision establishing ERGA described its tasks as:

(a) to advise and assist the Commission, in its work to ensure a consistent implementation in all Member States of the regulatory framework for audiovisual media services;

(b) to assist and advise the Commission, as to any matter related to audiovisual media services within the Commission's competence. If justified in order to advise the Commission on certain issues, the group may consult market participants, consumers and end-users in order to collect the necessary information;

(c) to provide for an exchange of experience and good practice as to the application of regulatory framework for audiovisual media services;

(d) to cooperate and provide its members with the information necessary for the application of the Directive 2010/13/EU, as provided for in Article 30 of Directive 2010/13/EU, in particular as regards Articles 2, 3 and 4 thereof (the basic rules on cross-border broadcasting).

ERGA’s establishment was thus not foreseen by the 2007 version of the AVMSD, and ERGA operated in addition to the Contact Committee that had been created by Article 29 of the directive.  Implicitly, this suggests that the Contact Committee was not sufficient in the Commission’s view for consistent and effective implementation of the AVMSD across the Member States. A European Parliament resolution from 2004 already ‘[r]egret[ed] that the Contact Committee established under the television without frontiers is mostly composed of representatives of the national government ministries and not by members of independent media regulatory authorities’. 

In the eyes of some, the Contact Committee did not – as a matter of form – allow for the cooperation of the national regulatory authorities, as those regulators did not necessarily participate in the Contact Committee. That situation could adversely affect consistency in pan-EU application of the AVMSD and give rise to concerns about enforcement, especially in the cross-border context and the risks of an unequal playing field (as between the approaches of the various Member States). The introduction of another forum for experts to share experience also raises questions about the difference between ERGA and the Contact Committee (if any) and their respective roles – especially given that there is already a platform for media regulators (EPRA), albeit one that lies outside the EU framework. 

Is the significance of the proposal an attempt to delineate between effective enforcement (which would fall to ERGA) and the development of policy (which is the responsibility of the more political body, the Contact Committee)? This point has indeed been made by the Chair of ERGA. Or is ERGA just ‘more European’ than the Contact Committee by virtue of its members’ independence from national political objectives, for example?  That ERGA is about more than effective enforcement finds some support in the report of EPRA which describes ERGA as holding ‘strategic EU policy-oriented discussions’ and ‘intend[ing] to adopt common positions or declarations on the implementation of the audiovisual EU regulatory framework’.

Moving to the directive, Art. 30A of the revised AVMSD (re-)establishes ERGA, a seemingly uncontroversial point from the Commission’s proposal which was unchanged through the legislative process. The Commission envisaged that ERGA would be composed of national ‘independent regulatory authorities’ in the field of audiovisual media services, thus linking this to the new provisions on the independent regulatory authorities introduced in Article 30 (containing provisions to ensure independence).  By contrast, the Contact Committee is ‘composed or representatives of the competent authorities of the Member States’ and is chaired by a Commission representative.  Apart from an attempt by the European Parliament to install 4 MEPs on the Contact Committee (unsuccessfully), this structure remained unchanged.  So while the Contact Committee may have representatives from the relevant national regulatory authorities, it may not in respect of all Member States.

The difference in membership is significant: the Commission’s proposal sought to ensure that it was the independent regulators, rather than Government ministers or senior civil servants, which participated in ERGA. The Commission here would no longer be controlling the meetings (as chair) but be ‘down-graded’ to participant.  This too is important in terms of ensuring that ERGA itself is independent from the Commission, as well as from Member States and commercial interests.  The wording has been amended slightly through the legislative process to include the reference to national regulatory authorities and/or bodies in the field of audiovisual media services.  This change may be semantic to reflect the actual nature of the relevant institutions, but arguably weakens the link to the independent regulators required by Article 30.  Insofar as this independence requirement might be seen as a fact making these regulators more EU focussed rather than open to national policy initiatives (as has been seen in other sectors, e.g. telecommunications), the change might be an attempt to limit the supranational element of the proposal. This is in contrast to the Contact Committee, which could well have (national) political undercurrents, given that its membership might include politicians and civil servants as well as or instead of technical experts. 

The original Commission proposal more or less tracked the tasks ascribed to ERGA in its 2016 decision with the addition of the task of giving opinions, when so requested, ‘..on the issues envisaged in Articles 2(5b) [new provisions on allocation of jurisdiction], 6a(3) [co-regulatory systems and the development of Union codes of conduct], 9(2) [self/co-regulation in relation to food and drink that are high in salt, sugars or fat (HFSS)], 9(4) [sharing best practice/union codes of conduct in respect of HFSS foods and drink] and on any matter relating to audiovisual media services, in particular on the protection of minors and incitement to hatred’.  This may reflect the power of the Commission, under Article 3(1) of the Decision, to consult ERGA ‘on any matter relating to audiovisual media’ - wording that is reflected in the recitals to the AVMSD (recital 37). With the focus on new forms of governance, it could be said that the Commission envisaged ERGA as having a significant role that maybe went beyond the idea of enforcement alone, though the involvement in jurisdiction and anti-circumvention decisions is in itself important (though note that the database containing the details of which service provider is established where is the responsibility of the Commission rather than – as suggested by the Parliament in its AMD 52, the responsibility of the Commission and ERGA).

These provisions did not remain unchanged. The initial view of the European Parliament’s joint rapporteurs was that ERGA should remain a consultative body without decision-making power and that more competences should be given to the Contact Committee (with a revised constitution to include four MEPs). To this end, the Parliament proposed that the Contact Committee should be provided with relevant information as regards Article 3 [freedom of reception/derogation procedures], 4 [circumvention provisions] and 7 [accessibility provisions] – the first two points of which are now in the directive. 

The Council’s view of ERGA’s role here was also more limited than the Commission’s proposal, though it seems that there were some differences in views between the Member States. Council amendments limited ERGA to giving technical advice – though what ‘technical’ in this context means is rather uncertain – does it relate to matters relating to technology (surely not) or instead advice in the practical implementation of the rules? It seems that general policy advice may lie outside ERGA’s competence, reflecting in broad terms the division of roles between ERGA and the Contact Committee. The Council proposals also resulted in the deletion of ERGA’s role in the reference to self and co-regulation in Article 9.  The Council also pushed back against the Commission’s control of ERGA in that the Commission proposal envisaged that the Commission was to be empowered to adopt ERGA’s rules of procedure.  According the Council’s view, this falls to ERGA itself.  Under the 2016 Decision, ERGA had a limited ability to raise issues. Article 2(2) provided that:

The chairperson of the group may advise the Commission to consult the group on a specific question.

This task does not appear in the list of tasks enumerated in the AVMSD – it is, perhaps, a reflection of the fact that ERGA does not or should not have a policy role.

ERGA seems to be more limited than the Contact Committee. The tasks of the Contact Committee are quite open-ended. It is to ‘facilitate effective implementation’ of the AVMSD – all of it – but in addition its scope is extended to ‘any other matters on which exchanges of views are deemed essential’ (Article 29(2)(a) and recital 32a). There is overlap with the tasks of ERGA in that both are concerned in the exchange of best practice in relation to the derogation provisions in Article 3(5). The AVMSD identifies further specific areas where the Contact Committee is to be consulted. For example, it is the Contact Committee and not ERGA that is to be consulted on the development of Union codes of conduct (the development of which is stated to be ‘in accordance with the principles of subsidiarity and proportionality (Article 4a(2) 3rd para)).  In the context of the development of guidance on the calculation of market share (Article 13(5a)) and listed events (Article 14(2)), the Commission is empowered to consult the Contact Committee not ERGA. While ERGA may be requested to give an opinion, the Contact Committee may provide opinions on its own initiative. Further, in addition to responding to requests from the Commission, the Contact Committee may also respond to Member States’ requests. The Contact Committee’s role extends to ‘examin[ing] any development arising in the sector on which an exchange of views appears useful’ (Article 29(2)(f)).  This gives the Contact Committee an agenda setting function which can also be seen in the fact that the Contact Committee discusses what should be included in the reports that are submitted by the Member States to the Commission on implementation of the AVMSD (see guidance issued by Contact Committee).

In sum, ERGA is confirmed as part of the apparatus for consistent enforcement of the AVMSD.  While it may be the case that there is a distinction between the policy discussions and the coordination of enforcement, it seems that there have been different views within the institutions as to the role of ERGA and these might not go away on the coming into force of the revised AVMSD. While we wait to see how ERGA operates in practice and interacts with the Contact Committee it can be said that, on a sliding scale of pan-EU regulators ranging from EU agencies at the top to informal groupings at the bottom, the ERGA lies near the bottom with its narrowly drawn, technical advisory role.

Photo credit: flickr

Net Neutrality: New EU Regulatory Guidelines

Professor Lorna Woods, University of Essex

After a long legislative process, a new EU regulation amending the EU telecommunications package was agreed last Autumn and came into force in April 2016. It contained rules relating to roaming and to universal service. These latter rules are the EU’s provisions on net neutrality and they aim ‘to establish common rules to safeguard equal and non-discriminatory treatment of traffic in the provision of internet access services and related end-users’ rights. The intention is ‘to protect end-users and simultaneously to guarantee the continued functioning of the internet ecosystem as an engine of innovation’ (point 1 in the preamble). 

At the time, there was debate as to whether these rules were good, bad or just ugly.  The Commission at that stage made big claims about the achievement.  Indeed, according to point 9 in the preamble:

[w]hen providing internet access services, providers of those services should treat all traffic equally, without discrimination, restriction or interference, independently of its sender or receiver, content, application or service, or terminal equipment. According to general principles of Union law and settled case-law, comparable situations should not be treated differently and different situations should not be treated in the same way unless such treatment is objectively justified. 

The rights of end-users are found in Art. 3 of the Regulation.  Art. 3(1) contains the rights of end-users to access and use the Internet.  Subsequent sub-provisions deal with possible exceptions.  Due to the open-textured nature of the drafting in the Regulation, and the inclusion of certain exceptions to the basic principle, the level of protection to end-users as well as the scope of providers’ activities in practice were uncertain. 

BEREC, the Body of European Regulators of Electronic Communications, was then tasked with producing guidelines to cut down on some of these uncertainties.  BEREC launched a public consultation on the Guidelines on 6th June 2016 which will run until 18th July. In the Guidelines, as with the Regulation, there are three problematic issues: zero-rating, traffic management and ‘specialised services’.

Zero-rating

The Issue: Zero-rating is the practice whereby traffic from certain sources does not count towards a subscriber’s monthly data cap.  Essentially this allows providers to charge different rates in respect of comparable services.  Zero rating makes ‘free’ sources more attractive to subscribers and potentially has an impact on the actual content consumed.  There are concerns that a provider will prioritise content it, or a linked company, provides; or provides only a ‘walled garden’. There are questions here about the impact on diversity of platforms (particularly where we are looking at vertically integrated conglomerates) and diversity of content, as well as the impact on the ability of users to use strong end-to-end encryption.

The Regulation: does not prohibit zero-rating

The Guidelines: BEREC notes that different forms of zero rating may have different consequences.  In determining the acceptability of a given form of zero rating, it takes a case-by-case approach based on criteria developed from the terms of the Regulation and set down in the Guidelines.

Circumvention of general aims of Regulation (see Art. 1, Rec 7)

Market position of ISPs and content and application providers involved (Rec 7)

Any effects on end-user rights of consumers/businesses

Any effects on end-user rights of content and application providers

The scale of the practice and availability of alternative offers

Any effects on freedom of expression and media pluralism (rec 13). 

We could suggest that this is a middle ground, allowing regulators to assess the threats to diversity in the specific instance. There are however questions as to whether practice will provide an adequate safeguard given that BEREC reiterates that the impact on users must be material, and be sufficiently predictable.  Predictability may be particularly problematic for start-ups. In such a circumstance, it could be that providers would be tempted to push the limits of the permissible, at least adversely affecting diversity of platform and content. It should be noted that zero rating in particular has been seen as especially problematic in competition law terms, and has even been banned in some countries.

Traffic Management

The Issue: Historically, transfer of data has been carried out on a ‘best efforts’ basis, with all traffic in principle treated equally. Traffic management is the way operators prioritise or restrict the flows of data on the network.  It is envisaged as a way of dealing with congestion, or in ensuring that time sensitive applications work (consider the differential impact with regards an ‘Internet of Things’ (IoT) health device, the function of which is disrupted by comparison with spam email). The problem is that slowing down some services can make them less attractive, so a telecoms provider might have an incentive to slow down (throttle) an OTT voice chat service. It is difficult to assess if services have objectively different requirements.   As the Regulation noted, ‘a significant number of end-users are affected by traffic management practices which block or slow down specific applications or services’ (recital 3 in the preamble). 

The Regulation: permits traffic management, but subject to certain safeguards.  So, the Regulation allows ‘reasonable traffic management’ which may be used to differentiate between ‘categories of traffic’.  There are three additional exceptions in Art. 3(3) which are allowed for the following reasons: a) compliance with other laws; b) preservation of integrity and security; and c) congestion management measures (see also Rec. 13, 14 and 15).

The Guidelines: in principle support the idea that traffic management should be service neutral, reiterating the Regulation on this issue.  At para 74 it lists traffic management practices that (subject to Art. 3(3) of the Regulation) are not permitted.  The guidance and limitations on reasonable traffic management focus on application-agnostic traffic management, specifically not allowing an operator to manage specific application traffic as part of their traffic management policies. Note, however, that non-discrimination does not mean that the quality of service is the same, provided application-agnostic traffic management can be shown.  Following the requirements of the Regulation,

[i]n order to be deemed to be reasonable, such measures shall be transparent, non-discriminatory and proportionate, and shall not be based on commercial considerations but on objectively different technical quality of service requirements of specific categories of traffic. Such measures shall not monitor the specific content and shall not be maintained for longer than necessary.

Nonetheless according to para 63, operators are permitted to distinguish between different classes, even when the network is not congested: an operator can differentiate between ‘objectively different’ categories of traffic – such as video, gaming, web browsing – as long as the purpose is to optimize the overall quality and user experience ‘based on technical quality of service requirements (for example, in terms of latency, jitter, packet loss, and bandwidth) of the specific categories of traffic’. An ISP must be able to detail the traffic management rationale when implemented to the national regulatory authorities (NRAs), and be transparent to the end user. The rationale seems to be to allow the network providers to optimize their networks, thereby putting off the day when the networks need to be upgraded. The issue of who should pay for the ultimate upgrade (or in what proportions) is hotly debated, reflecting concerns of the broadcasting ‘must carry’ debate.

‘Specialised services’

The Issue: the term, which is not in the Regulation, refers to those services which require special treatment (think about some IoT health apps) as an exception to the principle that paid prioritisation of certain content is not permissible.  BEREC suggests that ‘specialised services’ is a shorthand for the terminology in Art. 3(5) of the Regulation. In effect, ‘specialised services’ would not fall within the net neutrality rules. The question was how wide would this exceptional class be? In effect, would this open up the possibility of a ‘fast lane’ for those prepared to pay the toll?

The Regulation: the definition was open to interpretation, though there were some safeguards provided.  Specifically, the provision of specialised services should not be detrimental to regular Internet services and may only be offered if the provider has sufficient capacity.  Essentially this requires a test of necessity and capacity.

The Guidelines: BEREC has opted for a narrower perspective on these services. ‘Specialised services’ have to be new services that cannot function over the open Internet, so the extra speed must be ‘objectively required’ thus closing down the possibility of a two-tiered internet generally.  The Guidelines give examples: high-quality voice calling on mobile networks; live television delivered over the internet; and remote surgery but national regulatory authorities will be free to assess this on a case by case basis.  The justification for this was the inability to predict what new services will develop, especially in the context of the IoT. There are some concerns.

It seems that BEREC has decided that the provision of specialised services which will require some of the relevant subscriber’s own bandwidth for ‘normal’ Internet use will be acceptable, provided that there is no impact on the quality of other users’ experience (para 118).  This is the choice of the user in BEREC’s view.  Further, the Guidelines seem to envisage that it will be the service wanting to be designated as specialised that will ‘objectively determine’ whether the criteria are satisfied. Does this risk undermining the safeguards? BEREC seems to be aware of the risk: it suggests that the NRAs should monitor these services closely to check that the reasons given are plausible and not just about circumventing the rules.

It remains to be seen how open to movement BEREC is in terms of changes to the draft.  While the net neutrality campaigners have expressed concern about threats to the open Internet, equally the operators have voiced concern about the balance achieved in the draft as can be seen from ETNO’s response.  While the competition and pluralism issues are significant, underpinning this significant divide is the issue of where we expect the money to come from for network infrastructure and its development. There are a number of competing sectors in the mix: infrastructure, access, platforms/intermediaries, content providers and aggregators as well as the end-users – but who should pay and how should that payment be assessed and structured?

Photo credit: www.dontcomply.com

Testing EU experimentalist governance in the Telecoms sector

Marta Cantero (Postdoctoral Researcher, University of Helsinki | FiDiPro Project)

The building of a Digital Single Market for telecommunications is one of the main priorities of the current European Commission.^[i] Yet, the achievement of an actual single market for telecoms is still far from becoming a reality. The designed (multi-level) regulatory model for telecommunications places sector-specific National Regulatory Authorities at the core in the system for the implementation of the EU regulatory framework for telecoms. Moreover, the enforcement of the framework corresponds to the Member States under the national procedural autonomy. However, in order to preserve the legal integrity of the EU rules, the consistent application of the EU telecoms framework and the achievement of its policy objectives builds on a sector-specific supervisory mechanisms that grants the European Commission greater powers to monitor the different regulatory approaches of national regulators: Articles 7 and 7a of the Framework Directive on telecoms regulation.[ii] These articles put in place a consultation and monitoring system of a post-legislative nature that aims at consolidating the internal market for telecoms based on a combination of hard and soft law techniques, but is this system up to the task?

This brief post examines a pending case (Case C‑28/15, Koninklijke KPN NV and Others v Autoriteit Consument en Markt) that highlights the deficiencies of the market-consolidating mechanism put in place.

Background

In a nutshell, the case deals with a clash between the Dutch telecoms regulator, which issued a regulatory decision implementing a Commission Recommendation on termination rates,[iii] and the Dutch Trade and Industry Appeals Tribunal, which overruled the National Regulatory Authority’s (NRA) decision in the context of a procedure of judicial review following the appeal of the regulatory decision by some market telecoms operators. In particular, the national Court required the NRA to deviate from the Commission Recommendation on the grounds that there were no reasons for justifying a modification in the methodology used for calculating caps on termination rates.

However, this is the second time that the regulatory decision following the Recommendation is contested in front of the national court in The Netherlands. Already in 2010, the Dutch regulator (at that time OPTA, now ACM^[iv]) issued a decision in line with the guidance provided in the Commission Recommendation on termination rates. That triggered an initial response by the telecoms operators, who appealed the regulatory decision. In very broad terms, and leaving aside further competition concerns and issues of market analysis that were also object of the plea, the Court, upholding the appeal, argued that despite the Commission’s Recommendation on termination rates, conditions on the national market remained unchanged and, therefore, there was no reason to adjust the methodology for cost calculation in accordance with the Recommendation. Essentially, the court concluded that the inefficiencies in retail pricing cannot be resolved by imposing a “more invasive measure” at wholesale level, given that the retail mobile market was already considered competitive.^[v] As a result, the Court established new cap prices for termination rates and compelled the regulator to take a new decision setting the relevant rates on the basis of a different cost-methodology than that suggested by the European Commission. As part of the consultation procedure enshrined in Article 7a Framework Directive, the national regulator notified the European Commission the new decision compliant with the court’s judgment. In view of the Commission, that decision could create a barrier to the Internal Market. This led to the opening of a Phase II investigation under Article 7a procedure. Such a situation placed the NRA in the middle of a “tug-of-war” between the European Commission and the national judiciary. At that time, the national regulator could do anything but to give effect to the judgment of the highest administrative court in The Netherlands. However, two years later, in the context of a new market analysis, the regulator –perhaps pressured by the Commission’s investigation under the 7a procedure– issued a new decision following the European Recommendation. As expected, the new decision was again appealed in front of the national court. However, on this occasion, the national court decided to refer the case to the European court for preliminary ruling.

Issues at stake

In brief, the national judge asked the European court to clarify the discretion of the national judge[vi] to depart from a EU Recommendation on the basis national legal and factual(!) circumstances. The national court also seeks clarification as to the competence of the national court to assess the proportionality of the NRA’s performance within the context of the judicial review of regulatory decisions (Article 4 of the Framework Directive). Accordingly, the case addresses three fundamental legal (and institutional) tensions: 1) the legal and factual effect of soft-law; 2) the institutional and substantial limits of the judicial review of the activity of the national regulator; and 3) the proportionality of the NRA’s regulatory activity when giving effect to a EU Recommendation in a situation where the factual circumstances of a national market remain unchanged (reflecting a clash between the national regulator and the national judiciary).

So far, we do not have a final Judgment from Luxembourg. However, the analysis of the recently issued Opinion (28^th April) already provides warnings about the institutional problems that this case entails, in particular, for those other NRAs in Europe that are facing a similar situation and that, therefore, are awaiting a decision.

AG Opinion

In the Opinion, AG Mengozzi holds that, despite its non-binding nature (para. 54), the national court has to “take into consideration” the Recommendation on termination rates (para. 57). Moreover, he also posits that the national judge must act with “extreme caution” when deciding to depart from the methodology suggested by the Commission (paras.53 and 64). Advocate General also considers that it is not a problem of incompatibility of the national law with the EU legal provisions. In particular, he states that he finds (para. 72)

“very difficult to conceive that the national law, as it has stated that court, namely, as proceeds from Union law, requires, by its wording and its capacity, departing from the calculation model recommended by the Commission”

However, and given that that does not mean that there is only one appropriate model to give effect to the provisions contained in the Access Directive[vii], Mengozzi acknowledges, the specific characteristics of the Dutch market could lead the national court to depart from the recommended model (para. 75).

The second part of the Opinion focuses on the assessment of proportionality of the regulatory decision in accordance to the regulatory objectives to be pursued by NRAs under the Framework Directive as part of the judicial review. In Mengozzi’s view, the scope of judicial control of the regulatory activity reaches the proportionality assessment (paras. 80 and 84). As to this proportionality assessment, he holds that, in his view, following the Recommendation would entail a presumption of proportionality with the EU regulatory objectives enshrined in Article 8 of the Framework Directive; namely, promotion of competition, contribution to the development of the Internal Market, and promotion of the interests of the citizens of the European Union. This is important because the regulator’s justification to impose an obligation in a regulated market (wholesale) was based on the effects to be produced on a non-regulated market (retail). Accordingly, when it comes to the burden of proof, and given that it would require the demonstration of an impossible (or excessively difficult to provide) evidence, he concluded that the national court cannot require the NRA to sufficiently prove the effective achievement of the regulatory objectives (paras. 92 and 96).

Comments

Harmonizing the Internal market under a multi-level governance structure is not an easy task, and this case overly illustrates the difficulties that such endeavor entails. The underlying issues that the case involves can be summarized as follows:

1.      First, should the European court follow AG’s Opinion it would mean that the national judge, when deciding on the appeal, can overturn the analysis performed by the regulatory authority, as it already did with the first national ruling; i.e. the national judiciary would be acting as a de facto regulator. This results in an institutional conflict that slows down the integration of the telecoms market –the case has been ongoing since 2010. In my view, this judicial spillover raises the question as to whether the intervention of the national judiciary into the regulatory activity needs to be balanced against the principles of equivalence and effectiveness in the context of the implementation of a non-binding instrument.

2.      Secondly, the case casts doubts on the effectiveness of the sector-specific supervisory mechanism put in place under Articles 7 and 7a procedures of the Framework Directive, and the limits and actual effect of soft law as an integration tool.

3.      Thirdly, the multi-level governance design upon which the sector is build raises the question as to whether the national court should be entitled to determine the effective influence of national regulatory measures beyond the domestic marketplace. If the ECJ agrees with the Opinion, it would be for the national judge to decide on the effect of a national measure on the Internal Market – something that should belong to the ECJ. This calls for further answers concerning the viability of the telecoms market, as a fast-paced market, to coexist with divergences in Europe or, rather, whether the regime should be upgraded (e.g. more formal powers to the European Commission or the creation of a European Telecoms Agency, something that has failed so far).

4.      Finally, the related problem of building a single market for telecoms under a multilevel governance system. Given the relevance of the case for other NRAs around Europe that are facing similar situations, most of the regulatory decisions from European NRAs involved investigations initiated by the Commission under the abovementioned Article 7a procedure are on hold until the case is decided.

Conclusions

The case addresses classic and timely questions about the role and legal effect of EU soft law. In particular, when it comes to the effectiveness of soft law mechanisms for market-integration purposes; which is perhaps the most interesting aspect of the case.

Whatever the final outcome will be, it will have remarkable consequences for the current configuration of the telecoms institutional and procedural framework. One possibility is that the European court does not allow the national judiciary to depart from the Recommendation. In such case, it would mean that there is no room for domestic adaptation and Article 7a procedure would then help to boost non-binding decisions from the Commission. However, the other possibility is that the court follows AG’s interpretation. In my view, allowing departure from the Recommendation would render Article 7a procedure ineffective, provided that the national court would define to what extent the effect on the Internal Market of a national regulatory decision is sufficient so as to justify a mandatory compliance with a non-binding European instrument.

Photo credit: ispreview.co.uk

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[i] Political Guidelines for the next European Commission – A New Start for Europe: My Agenda for Jobs, Growth, Fairness and Democratic Change (15 July 2014), Jean-Claude Juncker.

[ii] Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (Framework Directive), as amended by Directive 2009/140/EC and Regulation 544/2009.

[iii] Without much elaboration on the technical details, termination rates are the rates which telecoms networks charge each other to deliver calls between their respective networks; i.e. how much mobile phone operators can charge to connect calls on each other’s networks. The Commission Recommendation aims at harmonizing the costing methodology used in the calculation of price caps for termination rates; Commission Recommendation (2009/396/EC) of 7 May 2009 on the Regulatory Treatment of Fixed and Mobile Termination Rates in the EU. OJ L 20.5.2009, pp. 67-74.

[iv] OPTA (Onafhankelijke Post en Telecommunicatie Autoriteit, "Independent Post and Telecommunications Authority", in English) was replaced by a single “super watchdog” body: the Netherlands Authority for Consumers and Markets (‘ACM’) after the merger of the Netherlands Competition Authority (NMa), the Netherlands Consumer Authority, and the Independent Post and Telecommunications Authority of the Netherlands (OPTA). ACM became operational as of 1^st April 2013.

[v] CBb Judgment of 31^st August 2011, 4.8.3.4.

[vi] Interestingly, the national court poses question(s) of the legitimacy of the court to deviate from the Recommendation, but it does not refer to the NRA’s discretion to not follow the recommended costing methodology, which is the situation in some other Member States.

[vii] Directive 2002/19/EC of the European Parliament and of the Council of 7 March 2002 on access to, and interconnection of, electronic communications networks and associated facilities (Access Directive).