Apple Inc. v. Samsung Electronics Co. Ltd. et al

Filing 847

Administrative Motion to File Under Seal Samsung's Opposition to Apple's Motion for Partial Summary Judgment filed by Samsung Electronics Co. Ltd.. (Attachments: #1 Trac Declaration in Support of Motion to File Under Seal, #2 Samsung's Opposition to Apple's Motion for Partial Summary Judgment, #3 Hecht Declaration in Support of Opposition to Motion for Partial Summary Judgment, #4 Ex A, #5 Ex B1, #6 Ex B2, #7 Ex C1, #8 Ex C2, #9 Ex D, #10 Ex E, #11 Ex F1, #12 Ex F2, #13 Ex F3, #14 Ex F4, #15 Ex G, #16 Ex H, #17 Ex I, #18 Ex J1, #19 Ex J2, #20 Ex J3, #21 Ex J4, #22 Ex J5, #23 Ex J6, #24 Ex J7, #25 Ex J8, #26 Ex J9, #27 Ex J10, #28 Ex J11, #29 Ex K1, #30 Ex K2, #31 Ex K3, #32 Ex L, #33 Ex M, #34 Ex N, #35 Ex O1, #36 Ex O2, #37 Ex P1, #38 Ex P2, #39 Ex Q1, #40 Ex Q2, #41 Ex Q3, #42 Ex Q4, #43 Ex Q5, #44 Ex Q6, #45 Ex Q7, #46 Ex R, #47 Ex S1, #48 Ex S2, #49 Rosenbrock Declaration in Support of Opposition to Motion for Partial Summary Judgment, #50 Ex 1, #51 Ex 2, #52 Ex 3, #53 Ex 4, #54 Ex 5, #55 Ex 6, #56 Ex 7, #57 Ex 8, #58 Ex 9, #59 Ex 10, #60 Ex 11, #61 Ex 12, #62 Ex 13, #63 Ex 14, #64 Ex 15, #65 Ex 16, #66 Ex 17, #67 Ex 18, #68 Proposed Order Denying Apple's Motion for Summary Judgment, #69 Proposed Order Granting Samsung's Administrative Motion to File Under Seal)(Maroulis, Victoria) (Filed on 4/2/2012) Modified on 4/3/2012 Attachment #1 Trac Declaration placed under seal. Posting of attachments #16, 18, 19, 20 through 33, 37, 38, 47 and 48 are NOT in compliance with General Order 62 (dhm, COURT STAFF).

EXHIBIT 4

TOWARDS A DYNAMIC EUROPEAN ECONOMY

SOMMARYREPORT

concerning the

GREEN PAPER
ON THE DEVELOPMENT OF THE COMMON MARKET
FOR TELECOMMUNICATIONS SERVICES AND EQUIPMENT

(Communication from the Commission)

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TABLE OF CONTENTS

Io

II.

ACHIEVEMENTS OF COMMUNITY TELECOMMUNICATIONS POLICY
4
TO DATE .....................................................

III

CURRENT ADJUSTMENT OF INSTITUTIONAL AND
REGULATORY CONDITIONS ....................................... 7

IV

CONVERGENT TRENDS IN THE CURRENT DEBATE IN THE COMMUNITY
ON STRUCTURAL ADJUSTMENT IN
i0
TELECOMMUNICATIONS .........................................

V

POINTS TO BE CONSIDERED FOR A COMMON APPROACH ..............

VI

PROPOSED COMMUNITY POSITIONS ...............................

VII

LINES OF ACTION TO HELP IMPLEMENTATION
OF THESE POSITIONS ......................................... 19

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16

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I.

INTRODUCTION

The strengthening of European telecommunications has become one of
the major conditions for promotin9 a harmonious development of
economic activities and a competitive market throughout the
Community and for achieving the completion of the Community-wide
market for goods and services by 1992.

The current wave of technical innovation resulting from the
convergence of telecommunications and computer technology has now
led to reviews in all Member States, and elsewhere, of the future
organisation of the telecommunications sector and its necessary
regulatory adjustment. The Commission considers it timely to aim
atachieving maximum synergy between current developments and
debates in the Member States, drawing fully on the potential
offered by them to meet the objectives of the Treaty.

This report is intended to launch a debate and to attract comment
from a broad spectrum of opinion : the Council ; the European
Parliament and the Economic and Social Committee ; the
Telecommunications Administrations and Recognized Private
Operating Agencies, hereinafter referred to as the
"Telecommunications Administrations" ; the European
telecommunications, data processing and services industry ; the
users who must be the main beneficiaries of the new
opportunities ; and the trade unions and other organisations who
represent the social interests in this area.
Ensuring that the varying national situations are fully taken into
account in a European approach requires a wide-ranging debate over
the whole of the Community.

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The Paper advances proposals for common positions and lines of
action, in order to ease the current transition.
The overriding aim is to develop the conditions for the market to
provide European users with a 9reater variety of
telecommunications services, of better quality and at lower cost,
affording Europe the full internal and external benefits of a
strong telecommunications sector.

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II° ACHIEVEMENTS OF COMMUNITY TELECOMMUNICATIONS POLICY TO DATE

A technically advanced, Europe-wide and low-cost telecommunications network will provide an essential infrastructure for
improving the competitiveness of the European economy, achieving
the Internal Market and strengthening Community cohesion - which
constitute priority Community goals reaffirmed in the Single
European Act° Telecommunications have a great influence not only
on services in general, such as financial services, transport and
tourism, but also on trade in goods and on European industrial
co-operationo

The emerging new telecommunications services - and notably
so-called value-added and information services - will have a major
impact on the future tradeability of services in general and on
the location of economic activities.

By the end of the century up to seven per cent of the Gross
Domestic Product of the Community will result from
telecommunications, as against over two per cent today. The
combined world equipment and services market for
telecommunications and information technology already represents
more than ECU 500 billion. It is estimated that, via information
technology, more than 60% of community employment may depend on
telecommunications by the end of the century°

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Since 1984, the Community has made substantial progress in this
field, by implementing a policy aimed at :

promoting the creation of an advanced European telecommunications infrastructure ;
contributing to the creation of a Community-wide market for
services and equipment ;
contributing to the competitiveness of European industry and
service providers°

In following these objectives, the Commission hasr within the last
two years, made proposals and achieved ~apid agreement by Counci!
along five main lines :

co-ordination regarding future development of telecommunications in the Community and common infrastructure projects°
This concerns in particular the principal future stages of
network development -

the Integrated Services Digital

Network (ISDN), digital mobile communications, and the
introduction of future broadband communications ;
creation of a Community-wide market for terminals and
equipment° This concerns in particular the promotion of
Europe-wide open standards, in order to give equal opportunity
to all market participants ;

the launch of a programme of pre-competitive and "prenormative" R&D covering the technologies required for
integrated broadband communications (the RACE programme) ;

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promoting the introduction and development of advanced
services and networks in the less-favoured peripheral regions
of the Community ;
building up common European positions with regard to
international discussions in this area.

During 1986 alone, Council achieved agreement, on proposal by the
Commission, on six major measures which will become fully
effective during 1987. ~ gives an overview of decisions
taken and of proposals currently before Council.

In parallel, the Commission has taken up a number of cases,
related to the opening of telecommunications markets, under the
Treaty’s competition rules.

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Figure I

COUNCIL DECISIONS TAKEN IN THE FIELD OFTELECOMMUNICATIONS

SINCE 1984

COUNCIL RECOMMENDATION OF 12 NOVEMBER 1984 concerning the
implementation of a common approach in the field of
telecommunications (84/549/EEC)
COUNCIL RECOMMENDATION OF 12 NOVEMBER 1984 concerning the first
phase of opening up.access to public telecommunications contracts
(84/550/EEC)
COUNCIL DECISION OF 25 JULY 1985 on a definition phase for an R&D
programme in advanced communications technologies for Europe (RACE)
(85/372/EEC)
COUNCIL RESOLUTION OF 9 JUNE 1986 on the use of videoconference and
videophone techniques for intergovernmental applications (86/C
160/01)
COUNCIL DIRECTIVE OF 24 JULY 1986 on the initial stage of the
mutual recognition of type approval for telecommunications terminal
equipment (86/361/EEC)
COUNCIL REGULATION OF 27 OCTOBER 1986 instituting a Community
programme for the development of certain less-favoured regions of
the Community by improving access to advanced telecommunications
services (STAR programme) (86/3300/EEC)

COUNCIL DIRECTIVE OF 3 NOVEMBER 1986 on the adoption of common
technical specifications of the MAC/packet family of standards for
direct satellite television broadcasting (86/529/EEC)
COUNCIL DECISION OF 22 DECEMBER 1986 on standardisation in the
field of information technology and telecommunications (87/95/EEC)
COUNCIL RECOMMENDATION OF 22 DECEMBER 1986 on the co-ordinated
introduction of the Integrated Services Digital Network (ISDN)in
the European Community (86/659/EEC)

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III CURRENT ADJUSTMENT OF INSTITUTIONAL AND REGULATORY CONDITIONS

To complement the progress achieved to date, it now seems timely
to initiate a common thinking process regarding the fundamental
adjustment of the institutional and regulatory conditions which
the telecommunications sector now faces. This world-wide
transformation is due to the profound technical change which is
currently taking place : the progressive merger of
telecommunications andcomputing technology, and the growing
integration of spoken, written and audio-visual communication..

Telecommunications has taken 140 years to develop from a single
service to a dozen services in the early eighties. The new
technological capabilities will now lead to considerable growth
and multiplication of services and applications within a single
decade. [Fig. 2]

Mastering this transformation requires certain readjustments in
the organisation of the sector in all Member States. The form of
these adjustments must take into account the particular position
of European countries and the requirements of the establishment of
a unified market.

As set out in this Green Paper, the Community must make sure
that :
the necessary European scale and dimension are introduced into
the current phase of transformation ;
no new barriers are created within the Community during the
adjustment of regulatory conditions ;

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r igure i .................

PROPOSALS CURRENTLY BEFORE COUNCIL

PROPOSAL FOR A COUNCIL REGULATION OF 29 OCTOBER 1986 on a Community
action in the field of telecommunications technologies (RACE)
PROPOSAL FOR A COUNCIL REGULATION OF 1 DECEMBER 1986 introducing
the preparatory phase of a Community programme on trade electronic
data interchange systems (TEDIS)
PROPOSAL FOR A COUNCIL RECOMMENDATION OF 9 FEBRUARY 1987 on the
co-ordinated introduction of public pan-European digital mobile
communications in the European Community and PROPOSAL FOR A COUNCIL
DIRECTIVE on the frequency bands to be made available for the
co-ordinated introduction of public pan-European digital mobile
communications in the European Community (*).

(*) approved by Council on llth June 1987

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rn
u. I-I1

(1) H"

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0 F,.

TELECOMMUNICATIONS:
PROSPECTS FOR THE YEAR 2000

11

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Colour t~l~vi~l~n’~"-"--’"---~ S!ere0 n,-’ " Colour television
_
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Mobile telephony
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-Mobiledata "
Mobile videotex
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1980

1975

Source: Consortium Brillsh TelconsulllConsultellDeteconlNeposlellSofrecom el ol,

1984

2 000

existing barriers are removed in the course of this
adjustment.

The search for common positions in the complex field of future
regulation of the telecommunications sector must take into account
a number of major requirements, if it is to contribute to
strengthening the European economy :
firstly, differing regulatory traditions in the sector.
Careful analysis of current reviews and debates in the Member
States must identify those areas on which common positions can
be reached° It is on those areas that efforts towards
developing consensus should be concentrated, in order to
increase convergence over time in the Community ;

secondly, opportunities and obligations deriving from the
Treaty, in particular regarding : the free movement of
goods ; the freedom to provide services ; competition rules ;
the common commercial policy ;
thirdly, the external relations of the Community, in
particular regarding its major trading partners - the EFTA
countries, the United States and Japan, the Third World. The
opportunities and obligations deriving for the Community from
the GATT agreement and the new GATT round must be taken into
account. The impact on the Community’s industrial and trading
position must be kept clearly in mind ;

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fourthly, the evolution of social perceptions in the Member
States regarding the new technologies. This concerns the
social consequences of the new technologies and associated
regulatory policies, the conditions for the integration of
these technologies into both private and work life, and
measures to facilitate the transition by generating new
employment opportunities and protecting legitimate interests.

The convergence of telecommunications, data processing and
audio-visual technologies is outdating traditional boundary lines
between the telecommunications network and the terminals sector,
and between services traditionally provided under monopoly and
those provided in a competitive environment. Satellites are now
able to provide services within andbetween countries, at a world
level.

There are now many service functions and features that can be
performed either by the public network or by a private network or
the terminal equipment attached to the network. All countries are
confronted by two options :
either to try to maintain the current regulatory framework,
which would imply imposing additional and permanent
restrictions and regulations on the use of data processing
equipment connected to the network ;
or to define the telecommunications regulatory framework more
narrowly and to give more room for competition.

The worldwide trend points towards the latter.

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IV

CONVERGENT TRENDS IN THE CURRENT DEBATE IN THE COMMUNITY ON
STRUCTURAL ADJUSTMENT IN TELECOMMUNICATIONS

In the Community, the situation is in flux. The United Kingdom
has substantially modified the organisation of its
telecommunications sector and issued recently a new general
licence for value-added and data services. France has seen
sqbstantial changes of legislation in the telecommunications
audio-visual field and will introduce major new proposals for its
future telecommunications policy in 1987. Reviews or changes are
underway in Germany, the Netherlands, Belgium, Italy, Spain,
Portugal, and other Member States. For its part, the European
Conference of Postal and Telecommunications Administrations (CEPT)
is reviewing its organisation, in response to, and in close
interaction with, the development of Community telecommunications
policy, and in close co-operation with the Commission.

Analysis of the regulatory situation and of current trends of
adjustment in the Member States shows that there are convergent
trends in current thinking. There is therefore the 9enuine
possibility of finding agreement for broad common regulatory aims
for the telecommunications sector in the Community.

There seems to be agreement on the following basic orientations :
New services and terminal equipment require market conditions
which favour innovation, experimentation, and a high degree of
flexibility.

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the current and future integrity of the basic network
infrastructure must be maintained or created. This implies in
particular a continuing strong role for Telecommunications
Administrations in the provision of network infrastructure,
and strong emphasis on Europe-wide standards in this area. It
also implies safeguarding the financial viability of
Telecommunications Administrations in order to ensure the
build-up of the new generations of telecommunications
infrastructure and the necessary level of investment.

securing a wide range of choice for the consumer requires that
Telecommunications Administrations be able to provide,
alongside other suppliers, those services which are opened to
competition even if this may involve complex problems of
regulation.

employment growth requires a growth-oriented policy,
particularly in the future conglomerate sector of telecommunications / information technologies within which jobs will
shift from traditional activities to new opportunities. An
intense dialogue with the social partners will be necessary,
in order to ensure a smooth transition.

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V

POINTS TO BE CONSIDERED FOR A COMMON APPROACH

The following points to be considered for a solution are discussed
iD more detail in the Green Paper :
Given their importance and wide ramifications, regulatory
changes in telecommunications can only be introduced
progressively. Time must be allowed for present structures,
which have grown up historically over a long period, to adjust
to the new environment. The major objective must be the
completion of the Internal Market by 1992.
Regulatory changes in telecommunications must take account of
the views of all parties concerned, in particular private and
business users, Telecommunications Administrations, the
Administrations’ work force, competing enterprises and the
telecommunications and data-processing industry ;
There is consensus in the Community that
telecommunications services and terminal
must be substantially expanded, in order
technological, economic and world market

competition in the
equipment sectors
to react to
trends ;

There is also consensus that the role of the Telecommunications Administrations in the provision of network infrastructure must be essentially safeguarded, in order to allow
them to fulfil their public service mandate ;
A stable "natural" boundary line between a "reserved services"
sector and a "competitive services" sector (including in
particular "value-added services") is not possible. Due to
technological development - the trend towards integration any definition (and reservation) of a service can only be

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temporary and must be subject to review if it is not to impede
the overall development of telecommunications services. There
is however in practice consensus between the Member States
that voice telephone service is a basic service. Currently,
this service is reserved in all Member States for provision by
the Telecommunications Administrations. At present, this
service corresponds to 85% - 90% of telecommunications
revenues.
As one counterpart of a more open market environment, the time
it takes for the establishment and common application of
international standards must be substantially reduced, in
order to maintain future network integrity and to promote the
availability and interoperability of efficient Europe-wide and
worldwide services.
Telecommunications Adminstrations generally are - and should
be - allowed to participate in the newly emerging
competitive services and terminal equipment market. This
requires that in the future regulatory responsibility must be
separated from operational responsibility. Regulation
concerns in particular licensing, control of conformity
testing and obligatory interface specifications, frequency
administration, and general surveillance including tariff
principles
Entry of the Telecommunications Administrations but also of
the computer and data-processing multi-nationa! companies
into a competitive telecommunications sector implies the
danger of abuse of a dominant position. Control measures with
regard to both types of dominant market participants will have
to be strengthened ;

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Action at Community level must be taken towards narrowing the
differences between Member States regarding the provision of
network facilities to the newly emerging competitive services
and terminal equipment sector. Otherwise a Community market
for services will not develop rapidly. This has implications
both for technical regulations and network termination points
and for usage conditions and tariff principles
The long-term convergence of telecommunications with
audio-visual technologies must be taken into account, in
addition to the current convergence between the
telecommunications and data-processing sectors. This affects
in particular policies concerned with satellite communications
and cable-TV networks.
Where cable-TV network infrastructure and satellite
communications are also used for two-way communications, close
surveillance with regard to their relationship and interfacing
with the overall telecommunications network will be needed, in
order to ensure the long-term overall integrity of the
telecommunications infrastructure°
Two-way satellite communications and the regulation of
up-links will need case-by-case consideration. Closely
monitored competition should be a possibility in those cases
where unacceptable interference with other satellite or radio
communications systems is not to be expected and where the
revenue base and financial viability of the general network
infrastructure provider is not put into question. In the case
of very small satellite antennae (VSAT or "microterminals")
suitable for data exchange only, this situation should
normally be assumed automatically°

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Given the trend in satellite communications towards point to
multi-point ,broadcasting’ applications for closed user
groups, the regulatory regime for receive only earth stations
(ROES) for satellite communications should be assimilated to
the regime for telecommunications terminals and TV
receive-only satellite antennae and fully opened to
competition.

With the growing importance of services, the Community will
face in its external relations a growing number of telecommunications-related issues. Consensus must be achieved in
time for the preparation of the new GATT round which will
include telecommunications services.
Consensus must be further developed at Community level
regarding telecommunications issues and the Community’s
overall framework of external relations, in particular with
the EFTA countries and CEPT, with the United States and Japan
and with the international organisations in this field, such
as the International Telecommunications Union (ITU).

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VI

PROPOSED COMMUNITY POSITIONS

With these points in mind, in the Green Paper proposals for
positions are developed, which are set out in Fig. 3.

The proposals concentrate on those issues which must be resolved
at Community level for all Member States. They leave out
questions which are important but fall to the national level, such
as which status for Telecommunications Administrations is best
suited to facing the developing competitive market environment,
and related questions of finance, organisation, and employment
relations.

The proposals foresee the continuation of those aspects of the
current regimes where there is compatibility with the Treaty.
Within the framework of the current adjustment and according to
their economic appreciation and perception, Member States may, of
course, choose their own position with regard to these aspects,
such as a more liberal regime regarding the whole or parts of the
network infrastructure. As regards required change at the
Community level, the proposals in ...... insist on three essential
modifications :

PHASED COMPLETE OPENING OF THE TERMINAL EQUIPMENT MARKET TO
COMPETITION
In the long run this must include all terminals including the
subscriber’s first telephone set, given the trend towards
integration of functions and the Integrated Services Digital
Network.

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t
I
I

PROPOSED POSITIONS

!

The general objective of the positions set out is the development in the Community
of a strong telecommunications infrastructure and of efficient services :
’ providing the European user with a broad variety of telecommunications services on
the most favourable terms, ensuring coherence of development between Member
States, and creating an open competitive environment, taking full account of the
dynamic technological developments underway.

A)

i

!
1

i
t

Acceptance of continued exclusive provision or special rights for the
Telecommunications Administrations regarding provision and operation of the
network infrastructure. Where a Member State chooses a more liberal regime,
either for the whole or parts of the network, the short and lone term
integrity of the general network infrastructure should be safeguarded.
Closely monitored competitive offering of two-way satellite communications
systems will need further analysis. It should be allowed on a case-by-case
basis, where this is necessary to develop Europe-wide services and where
impact on the financial viability of the main provider(a) is not
substantial .

i

Common understanding and definition regarding infrastructure provision should
be worked out under E) below.

s)

Acceptance of continued exclusive provision or special rights for the
Telecommunications Administrations regarding provision of a limited number of
basic services, where exclusive provision is considered essential at this
stage for safeguarding public service goals.
Exclusive provision must be narrowly construed and be subject to review
within given time intervals, taking account of technological development and
particularly the evolutio~ towards a digital infrastructure. "Reserved
services" may not be defined so as to extend a Telecommunications
Administration service monopoly in a way inconsistent with the Treaty.
Currently, given general understanding in the Community, voice telephone
service seems to be the only obvious candidate.

c)

Free (unrestricted) provision of all other services ("competitive services",
including in particular "value-added services") within Member States and
between Member States (in competition with the Telecommunications
Administrations) for own use, shared use, or provision to third parties,
subject to the conditions for use of the network infrastructure to be defined
under E).
"Competitive services" would comprise all services except basic services
explicitly reserved for the Telecomnmhications Administrations (see B).

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D)

.................
regarding standards for the network infrastructure and
services provided by the Telecommunications Administrations or service
providers of comparable importance, in order to maintain or create
Community-wide interoperability. These requirements must build in parEicular
on Directives 83/18g/EEC and 86/361/EEC, Decision 87/95/EEC and
Recommendation 86/659/EEC.
Member States and the Comity should ensure and promote provision by the
Teleco~mmications Administrations of efficient Europe-~de and worldwide
communications, in particular regarding those services (be they reserved or
competitive) recommended for Co~mmity-~de provision, such as according to
Recommendation 85/659/EEC.

E)

Clear definition by Community Directive of general requirements imposed by
Telecommunications Administrations on providers of competitive services for
use of the network, including definitions regarding network infrastructure
provision.

z

This must include clear interconnect and access obligations by
Teleco~mmications Administrations for trans-frontier service providers in
order to prevent Treaty infringements.

Consensus must be achieved on standards, frequencies, and tariff principles,
in order to agree on the general conditions imposed £or service provision on
the competitive sector. Details of this Directive on Open Network Provision
(0 N P) should be prepared in consultation ~th the Member States, the
Telecommunications Administrations and the other parties concerned, in the
framework of the Senior Officials Croup on Telecommunications (SOG-T).

F)

Free (unrestricted) provision of terminal equipment within Member States and
between Member States (in competition with Teleco~nunications
Adnfinistrations), subject to type approval as compatible with Treaty
obligations and existing Directives. Provision of the first (conventional)
telephone set c~ld be excluded fr~unrastricted provision on R temporary
basis.
Receive Only Earth Stations (ROES) for satellite doen-links should be
assimilated with terminal equipment and be subject to type approval only ;

4)

Separation of regulatory and operational activities of Teleco~nuntcations
Administrations. Regulatory activities concern in particular licensing,
control of type approval and interface specifications, allocation of
frequencies, and general surveillance of network usage conditions ;

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.)

3 (cont’ed)

Strict continuous review of operational (commercial) activities of
Telecommunications Adainistrations according to Articles 85, 86 and 90, EEC
Treaty. This applies in particular to practices of cross-subsldisation of
activities in the competitive services sector and of activities in
manufacturing ;

I)

Strict continuous review of all private providers in the newly opened sectors
according to Articles 85 and 86, in order to avoid the abuse of dominant
positions ;

J)

Full application of the Community’s common commercial policy to
telecomaunicatious- Notification by Telecommunications Administrations under
Regulation 17/62 of all arrangements between them or with Third Countries
which may affect competition within the Community° Provision of information
to the extent required for the Community, in order to build up a consistent
Community position for CATT negotiations and relations with Third Countries.

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In the short term,
found, taking into
majority of Member
covering the first

transitional solutions will have to be
account that at the present stage the large
States wish to maintain their monopoly
(conventional) telephone set.

ACCEPTANCE BY THE TELECOMMUNICATIONS ADMINISTRATIONS OF CLEAR
OBLIGATIONS TO INTERC~ONNECT WITH AND PROVIDE ACCESS TO
TRANS-FRONTIER SERVICE PROVIDERS

Generally, the network must be opened, under fair competitive
conditions, to service providers from other Member States.
This is a pre-condition for implementation of the Internal
Market for the Community’s future service economy.
Insofar as Member States continue, for the time being, to
reserve certain basic services for exclusive provision by
their Telecommunications Administrations, reserved services
must be construed narrowly and not interfere with service
provision from other Member States, in accordance with Treaty
rules.

CLEAR SEPARATION OF REGULATORY AND OPERATIONAL FUNCTIONS OF
TELECOMMUNICATIONSADMINISTRATIONS,
in those Member States where this still has not been carried
out. In a more competitive environment, the Telecommunications Administrations cannot continue to be both regulator and
market participant, i.e. referee and player. Regulatory
functions concern in particular licensing, control of type
approval and binding specifications, frequency allocation, and
surveillance of usage conditions~

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The need for this separation is confirmed by the trends and
debates in all Member States which are envisaging more
competition for the sector.
The Telecommunications Administrations should be market
participants in the competitive sectors, in an improved
competitive environment, in order to ensure full service to
the whole spectrum of users and industry.

Substantial differences will continue to exist between Member
States but must be accommodated. This concerns the different
status of the network operators (public/private) but also the
policy regarding provision of leased lines and resale of capacity.
All Member States agree currently on the necessity of securing the
financial viability of their Administrations, either by excluding
pure resale of voice (telephone) on leased lines or by tariff
schemes which make resale of voice to third parties unattractive,
such as usage-based tariffs. Both methods will have to be
accommodated in the Community. However, both methods must be
limited to a legitimate level of protection of financial viability
and must not represent the abuse of a dominant position. Current
charges for leased lines both at the national and Community level
show in some cases wide and unexplained divergences.

The proposals aim at progressively introducing full Community-wide
competition to the terminal equipment market, and as far as
possible and justified at this stage to telecommunications
services. In pursuing the implementation of these proposals, and
the lifting of existing restrictions, the Commission will take
full account of the fact that the competition rules of the Treaty
apply to Telecommunications Administrations, in particular to the
extent that they engage in commercial activities.

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VII LINES OF ACTION TO HELP IMPLEMENTATION OF THESE POSITIONS

In order to create the environment for reaching the objectives set
out, the Commission proposes a number of actions :
to smooth the transition towards a more competitive
Community-wide market ;

to promote a strong European presence in both the services and
industrial field ;
to prepare the Community for its discussions of future trading
relations in this field with its outside partners, in
particular in the framework of GATT.
It is envisaged:
to accelerate the implementation of existing action lines ;
to initiate a number of new action lines needed to complement
and facilitate the transition.

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VII.I

ACCELERATION OF EXISTING ACTION LINES

As regards the acceleration of implementation of the action lines
defined by Council in December 1984 for the Community’s telecommunications policy, the Commission foresees :

ACCELERATED ADOPTION OF THE PROPOSALS FOR ENSURING THE LONG
TERM CONVERGENCE AND INTEGRITY OF THE NETWORK INFRASTRUCTURE
IN THE COMMUNITY
A pan-European telecommunications infrastructure with full
interoperability is the only basis on which a Community-wide
open competitive terminal equipment and services market can
thrive. Intensified industrial cooperation within the
Community must ensure that European industry will fully
benefit from the opening of this market.
This concerns in particular :
rapid adoption of the RACE MAIN programme which is
fundamental to longer term network development in the
Community and for community-wide standards for the future
Integrated Broadband Communications, and promotion of
related projects for the progressive Community-wide
introduction of broadband communications ;
rapid adoption of the proposals for the introduction of
digital mobile communications ;
full application of Recommendation 86/659/EEC on the
co-ordinated introduction of the Integrated Services
Digital Network (ISDN) ;

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rapid application of the STAR programme for advancing
infrastructure in the regions, with the aim of increasing
economic cohesion during the current transition.

RAPID EXTENSION OF DIRECTIVE 86/361/EEC TO INCLUDE FULL MUTUAL
RECOGNITION OF TYPE APPROVAL FOR TERMINAL EQUIPMENT

According to the current Directive 86/361/EEC on the mutual
recognition of testing required for type approval, proposals
for full mutual recognition of type approva! must be submitted
by July 1989 at the latest. The Commission proposes to
accelerate this measure which is vital for the development of
a competitive, Community-wide terminal market.

REPLACING RECOMMENDATION 84/550/EEC ON THE FIRST PHASE OF
OPENING UP ACCESS TO PUBLIC TELECOMMUNICATIONS CONTRACTS BY A
DIRECTIVE

on the opening of procurement contracts applying to public and
private Telecommunications Administrations to which the Member
States confer exclusive or special rights.
The future participation of Telecommunications Administrations
in the competitive markets requires more transparency in their
purchasing behaviour~

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VII.2 INITIATION OF NEW ACTION LINES
As regards new action lines needed to facilitate the transition
towards a more competitive, Community-wide environment, the
Commission believes that the following are necessary :

SUBSTANTIAL REINFORCEMENT OF THE DEVELOPMENT OF STANDARDS AND
SPECIFICATIONS IN THE COMMUNITY / CREATION OF A EUROPEAN
TELECOMMUNICATIONS STANDARDS INSTITUTE

based on the current co-operation of the Telecommunications
Administrations within CEPT and with CEN-CENELEC. A
substantial reinforcement of resources applied to
standardisation is a necessary requirement for a truly open
competitive market.
Jointly financed, the institute, based on a small core team of
permanent staff and independently managed according to best
business practice, should draw flexibly on experts from both
the Telecommunications Administrations and industry, in order
substantially to accelerate the elaboration of standards and
technical specifications, indispensable for an open
competitive market environment and the development of
Europe-wide services.
This action would build on and complement the Community’s
current policy on telecommunications and information
technology standards.

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II

COMMON DEFINITION OF AN AGPEED SET OF CONDITIONS FOR OPEN
NETWORK PROVISION ("0 N P") TO SERVICE PROVIDERS AND USERS

Working out in common the principles of the provision of the
network to competitive service providers is a necessary
requirement for a Community-wide competi£ive market for
terminal equipment and for competitive services, including in
particular value-added services, if a long period of
case-to-case decisions is to be avoided.

This concerns in particular the definition of clear
Europe-wide network termination points, usage conditions and
tariff principles and availability of frequencies where
relevant.

The work should be carried out by the Commission in close
collaboration with the Senior Officials Group on
Telecommunications (SOG-T), based on hearings with all parties
concerned. Subsequentlyt the Commission would submit a
corresponding Directive on ONP to Council.

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III COMMON DEVELOPMENT OF EUROPE-WIDE SERVICES

Future intra-Community communications will depend on achieving
three objectives :

Europe-wide compatibility and inter-operability of those
services provided by the Telecommunications
Administrations. In addition to efficient telephony and
telex, new services such as teletex, videotex,
packet-switched and circuit-switched data services, mobile
communications and the future ISDN, as defined in
Recommendation 86/659/EEC should be available universally
at the European level. This could concern joint
Community-wide service provision, network planning, and
tariff principles ;
Rapid development of intra-Community provision of
value-added services. It is proposed to set into motion
at the Community level a number of measures aimed at
promoting the emergence of European value-added services,
building on current efforts such as the TEDIS initiative.

Rapid development of the Community’s policy on the
information market, to promote Europe-wide information
services, in particular fully mobilising the potential of
private initiatives.

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IV

COMMON DEFINITION OF A COHERENT EUROPEAN POSITION REGARDING
THE FUTURE DEVELOPMENT OF SATELLITE COMMUNICATIONS IN THE
COMMUNITY

The international satellite communications sector is currently
going through rapid changes. In the light of the positions
described in Fig. 3, based on prevailing technological trends,
common positions will in particular be required regarding :
development of the earth station market in Europe, in
particular with regard to common standards ;
future development of satellite links (space segment), in
particular the relationships between EUTELSAT, national,
and private systems, and the full use of the technological
potentia! of the European Space Agency ;
development of international satellite communications, in
particular with regard to INTELSAT and INMARSAT.

V

COMMON DEFINITION OF A COHERENT CONCEPT ON TELECOMMUNICATIONS
SERVICES AND EQUIPMENT WITH REGARD TO THE COMMUNITY’S
RELATIONS WITH THIRD COUNTRIES

An intensification of co-ordination with regard to Third
Countries and the position on the international regulatory
environment is urgently needed.

This concerns in particular the preparation of the new GATT
ROUND and future relations with international organisations
such as the International Telecommunications Union.

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It concerns further the evolving relationship in this field
with the EFTA countries, with the United States and Japan and
with the Third World.

VI

COMMON ANALYSIS OF SOCIAL IMPACT AND CONDITIONS FOR
TRANSITION

A SMOOTH

future
In the long term, the most important factor for the
technology
evolution of the telecommunications and information
sector and its regulatory environment, both at the national
and the Community level, will be the degree of social
consensus which can be achieved regarding the new
technologies.
Common discussions and positions will be needed regarding the
best ways to master the shift in job qualifications required
by the change in technology and to expand employment in new
service provision.
An essential condition for achieving a true Common Market in
this area will therefore be the development of a Europe-wide
consensus in the analysis of the social consequences of the
new technologies and the associated regulatory evolution and
policies. Analysis of the conditions for acceptability of new
services and activities, and the impact on work life and
employment will be a permanent task.

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This must include continuous in-depth research of evolving
user requirements for the new services, taking fully into
account broader trends in economic activity, in the
transformation of life-styles and in the social concerns of
the European citizen.

A vital contribution which can be made at Community level
towards evolving this consensus should be the launching of
joint analysis and study, in order to lay a better factual
basis of knowledge, increase the perception of developments in
the other Member States, prepare informed debate and
facilitate discussions and negotiations between the social
partners.

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