European concepts of
Universal service
Paul Nihoul
Louvain (Be), Groningen (Nl)
I. Introduction
2
•« 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
3
« 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
4

… But not an easy one



Terminology
Polyphony
Interdisciplinarity
5
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
6
Polyphony


Several speakers
Commission : liberalisation



Parliament/Council : ONP


Art. 86 EC Directive 1996
Communications 1996, 2003
90/387 as amended
ECJ


On regulation
Or on EC Ttreaty


« universal service without a name »
Corbeau, Glöckner
7
Interdisciplinarity, several sectors
 Telecom > electronic communications
 Postal services
 Energy?
 Transportation?
 « public utilities »
8
…
« interdisciplinarity »
 Public utilities





Electronic communications
postal services
Energy ?
Transportation ?
Social security



Health
Pensions
Invalidity, etc.
9
II. Universal service
10
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
11
…

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
12
Postal services


97/67 as amended lately
What is the US in that sector ?


Content ?


3 and 5
3.3 and 3.4
How will it be provided ?

…
13

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

14

Now

Non universal service activities


Activities = free, general authorisations
Universal service activities

general authorisations, individual licences possible
> Division of activities in 2 categories
15
Other sectors




Public service obligations
Electricity
Gas
Transportation
16
III. Peculiarities
17
« Revolution »

Beforehand



Summa divisio



The authority as source of all activities
« Fiefs »
One part for markets, economic rules
One part for authority, political rules
Change

The part of authorities is opened to markets
18
« New articulation MarketsAuthorities »

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)
19
« 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



Now : private firms



one firm > no need to organise markets
Public ownership > no need for regulation
Several firms > instruction to board
Private ownership > need for regulation
20
…

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
21
« 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
22
./. 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
23
./. 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 »
24

(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
25
…
 Postal directive

7, 4.2.
26
…
 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
27