NEWSLETTER

May 2002

 
TELECOMMUNICATIONS

New type of licence for the rendering of the virtual mobile telephone service
Order 601/2002 of the Ministry of Science and Technology, of May 14, 2002, creating a new kind of licence for the performance of the mobile telephone service available to the public (virtual mobile) and amending Order of 22 September, 1998, which sets out the applicable legal regime for individual licences for services and telecommunications networks and the conditions to be fulfilled by their holders, published in the BOE of 20 March, 2002.

Order 601/2002 regulates, through the modification of the Order of 22 September 1998, a new type of licence for operators other than those who operate the radio-electric access networks employed in mobile telephone services who, by using the same access networks as the latter, offer services in competition with them. These types of operators, known as “virtual mobile operators” have capabilities equivalent to those of conventional mobile operators, excepting the control and operation of the aforementioned radio-electrical access network, as they are capable of controlling and setting-up the user terminal through the issuance of their own subscriber’s identity modules, or equivalent appliances, in third-generation systems, as well as operating the user’s control registers and commutation and transmission elements which form the core of mobile networks.

Order 601/2002 sufficiently defines the concept and activities peculiar to virtual mobile operators and sets forth a balanced set of rights and obligations related to these types of operators which, on the one hand, grants them access to the essential resources for the performance of their activities and, on the other, makes up a fair competition scenario with regard to conventional mobile operators in the supply of the services.

The new operators shall be able to offer, through the mobile networks’ radio-electric segment, both the services for which they have been licensed and telephone services, on equal terms with the current public mobile network operators.

In line with the provisions of the Communication of the European Commission, of March 20, 2001, on the introduction of third-generation mobile communications within the Community, Order 601/2002 includes a provision enabling the shared use of networks by the operators, allowing the execution of roaming agreements of national scope, but safeguarding the obligations arising from the relevant licences.

Conditional upon the conclusions to be obtained from the process of negotiation with the Member States foreseen in the aforesaid Communication of the European Commission, roaming based on voluntary agreements between operators is permitted in order to allow all users of mobile telephone services available to the public to benefit from the currently existing complementarity between the various established technologies and networks.

Order 601/2002 also amends annexes II and III to the Order of September 22, 1998, on the parameters for the calculation of the tax for the reserve of the radio-electric public domain, and the application forms for individual licences managed by the Ministry of Science and Technology, both due to the adoption of the Euro as official currency as of January 1, 2002, and the need to envisage new telecommunications services which had so far not been included in such annexes.

Order 601/2002 came into force on March 21, 2002.

New National Frequency Allocation Table
Order 630/2002 of the Ministry of Science and Technology, of March 14, 2002, which approves a new National Frequency Allocation Table (CNAF), published in the BOE of 22 March, 2002.

The recent technological development of radiocommunications and the decisions and recommendations of the international organisms to which Spain is a party have made a new edition of the National Frequency Allocation Table necessary, replacing the former one, approved by the Order of the Ministry of Development of July 22, 1998, and amendments thereof.

Order 630/2002 entered into force on March 23, 2002.

Subscribers’ numbers telephone enquiry service
Order 711/2002 of the Ministry of Science and Technology, of March 26, 2002, which sets forth the conditions for the performance of the subscribers’ numbers telephone enquiry service, published in the BOE of 4 April, 2002.

Firstly, Order 711/2002 regulates the conditions for listing the personal details which are strictly necessary to identify a certain subscriber, in order for the directory service providers to be granted access to such information, as set out in Article 67.1 of the Regulations implementing Title III of the General Telecommunications Law, regarding the Universal Telecommunications Service, the remaining public service obligations and the public obligations for the performance of services and the operation of telecommunications networks, approved by Royal Decree 1736/1998. In this regard, Order 711/2002 determines which personal details may be included in telephone directories, whether printed or electronic, as well as those details which may be obtained via telephone enquiries. In addition, Order 711/2002 states that providers of subscribers’ numbers enquiry services shall be able to use other personal details pertaining to subscribers, provided that the latter have given their unequivocal consent thereto.

It shall be necessary to obtain the express consent of the subscribers of the mobile telephone service available to the public and the subscribers of network intelligence services in order to be entitled to use the available information for the purposes of rendering telephone enquiry services, when such users have not executed a subscription agreement, such as permitted users other than the subscriber, or holders of telecommunications service prepaid cards. In these cases, such information may only be used when the interested parties have expressed their desire to be included in the directories or subscribers’ numbers enquiry services.

Subscribers of telecommunications services available to the public may request from operators and service providers that they be excluded from telephone directories or enquiry services, to be informed that their personal details may not be used for purposes of direct sales, that their address or personal details be partially or totally excluded, or to amend any errors in their personal data.

In addition, following the guidelines of ECTRA (“European Committee for Telecommunications Regulatory Affairs”), a body belonging to the European Conference on Mail and Telecommunications (CEPT), Order 711/2002 assigns code “118” to the subscribers’ numbers telephone enquiry service, and sets out the conditions for the performance of the same in a framework of full competition between suppliers. Likewise, Articles 14 and 67.1 of the aforesaid Regulations, approved by Royal Decree 1736/1998, are developed to the extent necessary for suppliers to be granted access to the centralised information. Finally, the situation of number “1003”, which corresponds to the information service until now provided by the dominant public fixed telephone operator, is regulated in a way so as to make it compatible with the new competition framework and so that it may be used by all operators which provide access networks to their subscribers, for a period of one year as of the date on which Order 711/2002 shall enter into force. Once this period has elapsed, said number shall be liberated.

Order 711/2002 states that the rendering of the subscribers’ numbers telephone enquiry service shall require a type D general authorisation; however, operators with a valid authorisation to render telephone services available to the public may provide subscribers directly connected to their access networks with subscribers’ numbers telephone enquiry services by means of number “1003”, avoiding any discrimination. For the performance of subscribers’ numbers telephone enquiry services, the holders of public telephone networks which are considered as dominant shall attend the requests of special access to their networks from holders of type D general authorisations, if and when such requests are technically viable and duly justified.

Providers of subscribers’ numbers telephone enquiry services may freely set the prices to be charged to the subscribers of operators of the telephone service available to the public with whom they have executed agreements of special access to their networks, on the basis of the technical capacity of the latter. Such prices shall be communicated to the Council of Consumers and Users (“Consejo de Consumidores y Usuarios”) ten days prior to their effectiveness.

Finally, Order 711/2002 sets out the details which operators must submit to the Commission for the Telecommunications Market (“Comisión del Mercado de las Telecomunicaciones”) and the details with which the latter must provide the operators authorised to render subscribers’ numbers telephone enquiry services.

Order 711/2002 entered into force on April 5, 2002.

Decision on European Community radio spectrum policy
Decision 676/2002/EC of the European Parliament and of the Council of March 7, 2002, on a regulatory framework for radio spectrum policy in the European Community, published in the Official Journal of the European Communities (DOCE) of April 24, 2002.

Decision 676/2002/EC (the “Radio Spectrum Decision”) sets out a Community political and legal framework in order to ensure co-ordination of the political approaches and harmonised conditions which allow for the availability and efficient use of the radio spectrum, which are necessary for the settlement and functioning of the internal market within Community policies, such as electronic communications, transport, and research and development.

To this end, a committee is created (the “Radio Spectrum Committee") which shall assist the Commission in matters relating to radio spectrum policy. The Commission shall submit the necessary technical implementing measures to the Radio Spectrum Committee in order to ensure harmonised conditions for the availability and efficient use of radio spectrum. For the development of technical implementing measures which fall within the remit of the European Conference on Mail and Telecommunications (CEPT), such as the harmonisation of radio frequency allocation and of available information, the Commission shall issue mandates to the CEPT, and shall subsequently decide whether the results of the works carried out in accordance with such mandates shall be applied in the Community. Both the agreements adopted by the Radio Spectrum Committee and those adopted by the CEPT in the performance of mandates may include the possibility of approving transitional periods and/or radio spectrum sharing arrangements in a Member State, where justified, taking into account the specific situation in the Member State, on the basis of a reasoned request by the relevant Member State and provided such exception does not unduly defer implementation of the Radio Spectrum Decision or creates undue differences between Member States in what concerns their competitive or regulatory situations.

The Radio Spectrum Decision also imposes on Member States the obligation to publish their national radio frequency allocation table and information on rights, conditions, procedures, charges and fees concerning the use of the radio spectrum.

Finally, the Radio Spectrum Decision imposes a confidentiality obligation on what concerns the confidential information to which Member States have access on by reason of the performance of their competence regulated in the same.

The Radio Spectrum Decision entered into force on April 24, 2002.

Framework Directive on electronic communications networks and services
Directive 2002/21/EC of the European Parliament and of the Council of March 7, 2002, on a common regulatory framework for electronic communications networks and services, published in the Official Journal of the European Communities (DOCE) of April 24, 2002.

The convergence of the telecommunications, media and information technology sectors means that all transmission networks and services should be covered by a single regulatory framework. Said regulatory framework consists of this Directive 2002/21/CE (the “Framework Directive”) and four specific Directives: (i) Directive 2002/20/EC of the European Parliament and of the Council of March 7, 2002 on the authorisation of electronic communications networks and services (the “Authorisation Directive”), analysed below, (ii) Directive 2002/19/EC of the European Parliament and of the Council of March 7, 2002 on access to, and interconnection of, electronic communications networks and associated facilities (the “Access Directive”), analysed below, (iii), Directive 2002/22/EC of the European Parliament and of the Council of March 7, 2002 on universal service and users' rights relating to electronic communications networks and services (the “Universal Service Directive”), analysed below, and (iv) Directive 97/66/EC of the European Parliament and of the Council of December 15, 1997 on the processing of personal data and the protection of privacy in the electronic telecommunications sector (all of them hereinafter referred to as the “Specific Directives”). In this way, the regulation of transmission has been separated from the regulation of contents.

The Framework Directive sets out a harmonised framework for the regulation of electronic communications services, electronic communications networks and associated facilities and services. It sets the tasks of national regulatory authorities and establishes a set of procedures to ensure the harmonised application of the regulatory framework throughout the Community.

In this regard, it is set forth that national regulatory authorities, which shall be independent bodies from all organisations providing electronic communications networks, equipment or services, must contribute to the consolidation of the internal market by adopting the necessary measures which are reasonable for the achievement of its goals, including, especially (i) to promote the development of the internal market, suppressing hindrances to the supply of networks or services at a European scale, and promoting the development of trans-European networks and services interoperability; and (ii) to promote the interests of the European Community citizens, so that all of them are granted access to a universal service, specified in the Universal Service Directive, and to guarantee protection of consumers, personal data and intimacy.

The Framework Directive contains a series of provisions on the management of radio frequencies for electronic communications services, stating that Member States shall promote the harmonisation of the use of radio frequencies across the Community, meeting the need to guarantee the effective and efficient use of the same, in accordance with the Radio Spectrum Decision (see above). Likewise, transfer of radio frequencies is permitted as an effective way to promote an efficient use of the spectrum, national regulatory authorities being responsible for avoiding a distortion in competition as a result of those transfers.

Regarding the management of numbering resources, the Framework Directive states that all elements of the national numbering plans must be managed by the national regulatory authorities, including point codes used in network addressing. Access to numbering resources shall be based on transparent, objective and non-discriminatory criteria. Should there be a need for the harmonisation of the numbering resources in the Community to support the development of pan-European services, the Commission may take technical implementing measures using its executive powers. Member States must co-ordinate their national positions in international organisations and for where numbering decisions are taken, if this is appropriate to ensure full global interoperability of services.

The Framework Directive imposes the need for timely non-discriminatory and transparent procedures for the granting of rights to install facilities in favour of undertakings authorised to supply public or private communications networks, in order to guarantee the conditions for fair and effective competition. It is also stated that the national regulatory authorities shall favour the shared use of such resources. Particularly, where undertakings have no access to viable alternatives due to the need to protect the environment, public health or public security, or to meet town and country planning objectives, Member States may impose the sharing of facilities or property (including physical co-location) on an undertaking operating an electronic communications network, or take measures to facilitate the co-ordination of public works only after an appropriate period of public consultation.

Concerning undertakings which supply public communications networks or electronic communications services available to the public, holding special or exclusive rights for the performance or services within other sectors, the Framework Directive sets forth that the Member States shall require such undertakings to keep separate accounts for the activities associated with the provision of electronic communications networks or services, or to have structural separation for such activities. This requirement may be chosen not to apply to undertakings with an annual turnover of less than EUR 50 million for activities associated with said networks or services.

In general, the Framework Directive also imposes a series of ex ante obligations on networks and service operators in certain circumstances - where undertakings are determined to have significant market power in the relevant sector - in order to ensure the development of a competitive market. Such obligations are further defined by, among others, the Universal Service and Access Directives. In this regard, the Framework Directive modifies the definition of “significant market power” contained in Directive 97/33/CE, which shall be equivalent to the notion of “dominant position” contained in the case law of the European Court of Justice and the Court of First Instance of the European Communities. Thus, two or more undertakings shall be deemed to have a joint dominant position, not only where there are structural or other links between them, but also if they operate in a market, the structure of which is considered to be conducive to co-ordinated effects, that is, where it serves parallel or alienated conducts which are non-competitive.

The ex ante obligations may only be imposed where there is not effective competition in the market, and thus, the Framework Directive states that the Commission shall publish a series of guidelines for market analysis and evaluation of significant market power, which the national regulatory authorities shall employ in determining the need to apply the relevant measures, save for the case of certain trans-national markets, where the relevant national regulatory authorities shall effect a joint market analysis.

The provisions of the Framework Directive imply that the normalisation of the supply of networks and services shall continue to be a process mainly induced by the market. It is set forth that the Commission shall issue a list of rules and specifications which may serve as a basis to promote harmonisation of the sector, and shall request from the European normalisation bodies to issue norms in such regard, the Member States being responsible for promoting the use of such norms. The Commission may declare some rules to be obligatory, in order to ensure interoperability of services in one or more Member States.

The Framework Directive also contains provisions promoting the interoperability of digital interactive television services, encouraging the use of open application program interfaces (“API”).

Finally, the Framework Directive sets forth the guidelines for conflict resolution procedures regarding the obligations arising from the Framework Directive, and creates a Communications Committee, which shall replace the ONP Committee founded by Article 9 of Directive 90/387/CEE and the Licences Committee founded by Article 4 of Directive 97/13/CE.

The Framework Directive shall be incorporated into the national legal systems no later than July 24, 2003, and the provisions thereof shall be applicable as of July 25, 2003.

The Framework Directive entered into force on April 24, 2002.

Directive on the authorisation of electronic communications networks and services
Directive 2002/20/EC of the European Parliament and of the Council of March 7, 2002, on the authorisation of electronic communications networks and services, published in the Official Journal of the European Communities (DOCE) of April 24, 2002.

Directive 2002/20/EC (the “Authorisation Directive”) is one of the specific Directives that, together with the Framework Directive, forms the new regulatory framework of transmission services and networks, which shall achieve convergence in the telecommunications, media and information technology sectors.

The Authorisation Directive is aimed at the implementation of an internal market in electronic communications networks and services through the harmonisation and simplification of authorisation rules and conditions in order to facilitate their supply throughout the Community, and it applies to authorisations for the supply of electronic communications networks and services.

The Directive sets out the Member States’ obligation to ensure the freedom to supply electronic communications networks and services, subject only to a general authorisation, limitatively listing the conditions and obligations to whose compliance it may be subject. In this regard, the undertaking in question may be required to submit a notification of its intention to begin the supply activity, together with the minimum information necessary in order to keep a register of suppliers, but may not be required to obtain an explicit decision or any other administrative act by the national regulatory authority. Likewise, the Authorisation Directive sets out the following minimum list of rights arising from the referred general authorisation: (i) to supply electronic communications networks and services; (ii) to install facilities which are necessary to carry out supply, considered in accordance with the Framework Directive, (iii) to negotiate interconnection with, and, where applicable, obtain access to or interconnection from, other suppliers of publicly available communications networks and services covered by a general authorisation anywhere in the Community, in accordance with the Access Directive, and (iv) to be given an opportunity to be designated to provide different elements of a universal service and/or to cover different parts of the national territory, in accordance with the Universal Service Directive.

Regarding the rights of use of radio frequencies and numbers associated to the supply of electronic communications networks and services, the Authorisation Directive states that those must not be unduly restricted, and shall be granted to any undertaking which renders this service, whenever possible, e.g., when the risk of harmful interference is insignificant. In accordance with the Framework Directive, different comparative or competitive selection procedures may be carried out regarding numbers of extraordinary economic value. The number of rights of use of radio frequencies may only be limited by the Member States in certain cases, and the selection criteria for their granting must be objective, transparent, non-discriminatory and proportionate; time limits are also set out for the resolution of selection procedures.

The Authorisation Directive provides for the possibility of verification by the national regulatory authorities of compliance with the conditions and obligations to which a general authorisation is subject. For such purpose, the relevant authorities may gather information from the holders of general authorisations in this regard and also for statistical purposes, always specifying to which end certain information is required. The consequences of an undertaking’s non-compliance with such conditions and obligations are also set out, with a maximum penalty of preventing an undertaking to continue supply of electronic communications services and networks, or discontinue or cancel an undertaking’s right of use of radio frequencies or numbers.

Regarding authorisations already in existence prior to the entry into force of the Authorisation Directive, those must be adapted to the provisions thereof prior to the established date for the incorporation of the Authorisation Directive into the national legal systems. An extension of up to nine months of the validity of rights and obligations deriving from earlier authorisations which are reduced by this Directive may be requested from the European Commission.

The authorisation Directive shall be incorporated to the national legal systems of the Member States no later than July 24, 2003, and the provisions thereof shall be applicable as of July 25, 2003.

The Authorisation Directive entered into force on April 24, 2002.

Directive on access to, and interconnection of, electronic communications networks
Directive 2002/19/EC of the European Parliament and of the Council of March 7, 2002, on access to, and interconnection of, electronic communications networks and associated facilities, published in the Official Journal of the European Communities (DOCE) of April 24, 2002.

Directive 2002/19/CE (the “Access Directive”) harmonises, within the structure of the Framework Directive, the way in which the Member States regulate access to, and interconnection of, electronic communications networks and associated facilities, and their interconnection, setting forth the rights and obligations of the operators and the firms wishing to interconnect and/or be granted access to their networks or associated resources. It sets out objectives for national regulatory authorities regarding access and interconnection, and lays down procedures to ensure that obligations imposed by national regulatory authorities are reviewed and, where appropriate, withdrawn once the desired objectives have been achieved. The Access Directive does not refer to access by end-users.

Thus, the Access Directive is aimed at suppressing the restrictions which prevent undertakings in the same Member State or in different Member States from negotiating between themselves access and/or interconnection agreements. The undertaking requesting access or interconnection does not need to be authorised to operate in the Member State where access or interconnection is requested, if it is not providing services and does not operate a network in that Member State. Operators of public communications networks shall have a right and, when requested by other undertakings so authorised, an obligation to negotiate mutual interconnection.

Likewise, the Access Directive states that public electronic communications networks settled for the distribution of digital television services must be capable of distributing wide-screen television services and programmes. Network operators which receive and redistribute wide-screen television services or programmes shall maintain such format.

In accordance with the Access Directive, national regulatory authorities shall ensure adequate access, interconnection and interoperability of services. In particular, national regulatory authorities shall be able to impose obligations on undertakings that control access to end-users to the extent that is necessary to ensure end-to-end connectivity, and to ensure accessibility for end-users to digital radio and television broadcasting services, but, where necessary, to ensure normal operation of the network, the national regulatory authorities may lay down technical or operational conditions to be met by the beneficiaries of such access. The national regulatory authorities shall have the power to intervene at their own initiative where justified or in the absence of agreement between undertakings.

The Access Directive maintains the regulatory framework set out by Directive 95/47/CE concerning the obligation to provide conditional access in the digital television sector in equal, reasonable and non-discriminatory conditions. However, it sets an obligation for the Member States and the Commission to periodically review these obligations, and to suppress them in connection with operators with no significant market power.

In order to ensure the continuity of the currently existing agreements and avoid an eventual legal void, the Access Directive sets out that obligations concerning access and interconnection imposed by virtue of Directive 97/33/EC, special access obligations imposed in accordance with Directive 98/10/EC and obligations of supply of transmission capacity in leased lines pursuant to Directive 92/44/EC, shall be initially incorporated to the new regulatory framework, aiming at their immediate review in the light of the market conditions.

The Access Directive maintains the obligations laid down by Directive 97/33/CE, which the national regulatory authorities may impose on operators with significant market power in a specific market, i.e.: (i) transparency obligations regarding access and interconnection, according to which operators shall publish certain information, or even a reference offer; (ii) non-discrimination obligations, which shall ensure that the operator applies equivalent conditions in similar circumstances to undertakings rendering equivalent services; (iii) obligations to keep separate accounts, in order for the wholesale and transfer prices charged by the vertically integrated undertakings to be clearly shown; (iv) obligations to attend reasonable requests to access specific network or associated resources; and (v) obligations on price control, imposing the duty on undertakings to base prices on costs in the cases where lack of effective competition would allow operators to maintain excessive prices.

The Access Directive shall be incorporated into the national legal systems of the Member States no later than July 24, 2003, and the provisions thereof shall be applicable as of July 25, 2003.

The Access Directive entered into force on April 24, 2002.

Directive on universal electronic communications service
Directive 2002/22/EC of the European Parliament and of the Council, of March 7, 2002, on universal service and users' rights relating to electronic communications networks and services, published in the Official Journal of the European Communities (DOCE) of April 24, 2002.

Directive 2002/22/EC (the “Universal Service Directive”) is one of the specific Directives that, together with the Framework Directive, forms the new regulatory framework of transmission services and networks, which shall achieve convergence in the telecommunications, media and information technology sectors.

The Universal Service Directive is aimed at ensuring the existence of good quality electronic communications at affordable prices, at the disposal of all end-users, regardless of their geographical location, through effective competition and freedom of choice and to deal with circumstances in which the needs of end-users are not satisfactorily met by the market. With a view to ensuring the performance of a universal service, the Directive sets forth the minimum aggregate of services of a specified quality to which all end-users must have access, taking into account specific national conditions, at an affordable price and without distorting competition

The first universal service obligation is to attend all reasonable requests of connection to the public telephone network from a fixed location, and access to publicly available telephone services at affordable prices. The connection shall allow end-users to make and receive phone calls, facsimile communications and data transmissions at a speed sufficient to permit functional Internet access.

Likewise, the Universal Service Directive sets out the obligation to make at least one comprehensive directory available to end-users, which shall be updated, at least, annually, together with a general information service on subscribers’ numbers, which shall also be made available to the users of public pay phones. Another universal service obligation is to ensure that the offer of public pay phones meets the reasonable needs of end-users in terms of geographical coverage, number of telephones and accessibility of such telephones to disabled users. Also, certain measures may be imposed on operators in order to ensure that disabled users are granted access to telephone and equivalent services available to the remaining end-users.

The Member States may appoint one or more undertakings to ensure the performance of the universal services, so that the whole of the national territory can be covered. Member States may designate different undertakings or groups of undertakings in part or all of the national territory for the performance of different universal service elements, using an efficient, objective, transparent and non-discriminatory designation mechanism, whereby no undertaking is a priori excluded from being designated.

National regulatory authorities shall monitor the evolution and level of retail tariffs of the services falling under the universal service obligations and provided by designated undertakings, in particular, in relation to national consumer prices and income. In the light of national conditions, Member States may require that designated undertakings provide tariff options or packages to consumers which depart from those provided under normal commercial conditions, in particular to ensure that those on low income or with special social needs may access or use the publicly available telephone service. Member States shall ensure that end-users are not forced to pay for additional services which are not necessary for the service requested, and that designated undertakings provide users with facilities which allow them to monitor and control their expenses.

Regarding the quality of the universal service, the Universal Service Directive gives the national regulatory authorities the power to set out performance targets for designated undertakings with universal service obligations. Such undertakings shall publish adequate and up-to-date information concerning their performance in the provision of universal services. Likewise, the national regulatory authorities may monitor compliance with the established performance targets.

The Universal Service Directive gives Member States the power to maintain all obligations on retail tariffs for the provision of access to and use of the public telephone network, imposed under Directive 98/10/EC, on carrier selection or pre-selection, imposed under Directive 97/33/EC, and on leased lines, imposed under Directive 92/44/EEC, until national regulatory authorities have carried out a market analysis in order to decide whether to maintain, modify or suppress such obligations, pursuant to the procedure set out by the Framework Directive for this purpose.

Where national regulatory authorities consider that the universal service obligations imposed amount to an unfair burden on designated undertakings, they shall calculate the net cost of the performance -pursuant to the parameters set out by the Universal Service Directive- in order to share said net cost between the providers of electronic communications networks and services, or introduce a compensation mechanism from public funds and under transparent conditions, in favour of the designated undertaking in question.

The Commission shall periodically review the scope of the universal service obligations, in the light of the social, economic and technological evolution.

Regarding control over undertakings with significant market power in specific markets, the Universal Service Directive sets out that, where a national regulatory authority considers a market not to be effectively competitive, and that the obligations imposed under the Access Directive (i.e. transparency, non-discrimination, separate accounts, specific resources and price control) would not result in the achievement of the objectives set out in the Framework Directive, it may impose regulatory obligations on undertakings with significant market power (in accordance with the Framework Directive). The obligations imposed shall be justified and proportionate, and may consist of requirements that the undertakings do not charge excessive prices, inhibit market entry or restrict competition by setting predatory prices, show undue preference to specific end-users or unreasonably bundle services.

On the other hand, where the national regulatory authority determines that the market for the provision of part or all of the minimum set of leased lines is not effectively competitive, it shall identify undertakings with significant market power in the provision of those specific elements of the minimum set of leased lines services in all or part of its territory, in accordance with the Framework Directive. The national regulatory authority shall impose obligations regarding the provision of the minimum set of leased lines, as provided for in the Framework Directive, and on certain conditions for such provision (non-discrimination, cost orientation of tariffs and transparency, etc.) concerning the market of leased lines in question.

As a last control mechanism, the national regulatory authorities shall require from undertakings notified as having significant market power for the provision of connection to and use of the public telephone network at a fixed location to enable their subscribers to access the services of any interconnected supplier of publicly available telephone services on a call-by-call basis, by dialling a carrier selection code and by means of pre-selection, with a facility to override any pre-selected choice on a call-by-call basis by dialling a carrier selection code. It shall be ensured that pricing of these facilities does not act as a disincentive for the use thereof.

The Universal Service Directive sets out a list of end-users’ rights, which entail obligations to all service and electronic communications networks providers. In this regard, it sets forth the minimum contents of the agreements by means of which consumers subscribe to services which enable connection or access to the public telephone network, and states that subscribers shall always have the power to withdraw from their contracts without penalty upon notice of proposed modifications in the contractual conditions, and be given adequate notice thereof, not shorter than one month. It is also set out that Member States shall ensure that end-users are provided with transparent and up-to-date information on applicable prices and tariffs and on service quality.

Member States shall take all necessary steps in order to ensure the network’s integrity from a fixed location, and, in the event of network breakdown due to catastrophes or force majeure, the availability of the public telephone network and publicly available telephone services at fixed locations. They shall also ensure the interoperability of the consumer digital television equipment.

The Universal Service Directive sets out a list of obligations concerning numbers with European scope. In this regard, all end-users shall be able to call the emergency services free of charge, by using the single European emergency call number "112”. The authorities receiving emergency calls shall be provided with information concerning the location of the persons making such call, to the extent that this is technically viable. Likewise, certain rules are adopted on European telephonic access codes and non-geographic numbers.

The Universal Service Directive requires that the national regulatory authorities have the power to require all undertakings that operate public telephone networks to make available to end-users tone dialling and calling-line identification facilities, subject to technical feasibility and economic viability. It shall also be ensured that all subscribers of publicly available telephone services, including mobile telephones, can retain their number or numbers when so requested, regardless of the undertaking providing the service, at a specific location in the case of geographic numbers, and in the case of non-geographic numbers, at any location.

Finally, it is set out that the Member States may impose reasonable "must carry" obligations for the transmission of specified radio and television broadcast channels and services on undertakings under their jurisdiction providing electronic communications networks used for the distribution of radio or television broadcasts to the public where a significant number of end-users of such networks use them as their principal means to receive radio and television broadcasts. Such obligations shall only be imposed where they are necessary to meet clearly defined general interest objectives and shall be proportionate and transparent. The obligations shall be subject to periodical review.

The Universal Service Directive shall be incorporated into the national legal systems of the Member States no later than July 24, 2003, and the provisions thereof shall be applicable as of July 25, 2003.

The Universal Service entered into force on April 24, 2002.

EC Regulation on the “.eu” top level domain
Regulation 733/2002/EC of the European Parliament and of the Council of April 22, 2002, on the implementation of the “.eu” Top Level Domain, published in the Official Journal of the European Communities (DOCE) of April 30, 2002.

The implementation of the “.eu” top level domain (ccTLD) was one of the targets for the progress of electronic commerce within the Community, set out in the e-Europe initiative approved by the European Council at its meeting of March 23 and 24, 2000, in Lisbon.

Regulation 733/2002 sets forth the conditions for the application of the “.eu” domain within the Community, setting the basis for the designation and the general operating framework of the so-called “Registry”, a private non-profit entity created in accordance with the laws of a Member State, to which the domain’s organisation, administration and management shall be entrusted, subject to the principles of quality, efficiency, reliability and accessibility. Once the Registry is designated by the Commission pursuant to an open, transparent and non-discriminatory selection procedure, the Commission and the Registry shall enter into a contract for a limited period, renewable thereafter.

The Registry shall not act as registrar. Undertakings, resident individuals and organisations settled in the European Union may request the registry of an “.eu” top level domain from any accredited registrar, who shall have entered into an agreement with the Registry for this purpose.

The Commission, after consulting the Registry, shall adopt public policy rules concerning the implementation and functions of the ".eu" top-level domain and the public policy principles on registration. Such rules and principles shall refer to (i) an extra-judicial settlement of conflicts policy; (ii) public policy against speculative and abusive registration of domain names (including the possibility of registrations of domain names in a phased manner); (iii) criteria for the possible revocation of domain names, (iv) language issues and geographical concepts; and (v) treatment of intellectual property and other rights.

The Community shall retain all rights relating to the “.eu” top level domain, including, in particular, intellectual property rights and other rights to the Registry databases required to ensure the implementation of the Regulation and the right to re-designate the Registry.

Regulation 733/2002 entered into force on April 30, 2002.

INDUSTRIAL PROPERTY

Competence of the Autonomous Communities on new plant varieties
Law 3/2002, of March 12, 2002, which amends Law 3/2000, of January 7, 2000, on the Legal Regime of the Protection of New Plant Varieties, published in the BOE of March 13, 2002.

Law 3/2002 amends Law 3/2000, on the legal regime of the protection of new plant varieties (i.e. commercial varieties protected by a legal regime similar to industrial property), in order to adapt it to the distribution of competence between the State and the Autonomous Communities, set out for industrial property matters by the Resolution of the Constitutional Court, of June 3, 1999.

Law 3/2000 provided for a plant varieties’ titles granting procedure centralised at the Ministry of Agriculture, Fisheries and Food ("Ministerio de Agricultura, Pesca y Alimentación"). Resolution 103/199 of the Constitutional Court (issued in connection with the Trademarks Law) showed that, while the State has legislation competence on Industrial Property (Article 149.1.9 of the Spanish Constitution), the Autonomous Communities have competence concerning the reception of applications and the verification of their compliance with formal requirements.

In accordance with Resolution 103/199 of the Constitutional Court, Law 3/2002 recognises certain powers of the Autonomous Communities regarding (i) the reception of applications and verification of their compliance with formal requirements, (ii) exercise of punitive powers, (iii) requesting information for monitoring maintenance of the variety and (iv) verifying that the variety remains unchanged.

Law 3/2002 provides for its development through regulations in connection with the co-ordination mechanisms between the Ministry of Agriculture, Fisheries and Food and the Autonomous Communities for the access by the latter to the information contained in the Official Registry.

Law 3/2002 entered into force on March 23, 2002

Biotechnological inventions
Law 10/2002, of April 29, 2002, which amends Law 11/1986, of Patents, for the implementation of Directive 98/44/CE of the European Parliament and of the Council, of July 6, 1998, on the legal protection of biotechnological inventions, published in the BOE of 30 April, 2002.

Law 10/2002 incorporates Directive 98/44/EC on the legal protection of biotechnological inventions, into the Spanish legal system, through the modification of the Patents Law in four important areas: (i) delimitation of biotechnological inventions which can be patented, (ii) conditions for the deposit and access to biological material; (iii) the scope of protection conferred by the patent, and (iv) patent protection’s reach, and (iv) compulsory licences per interdependency.

(i)     Delimitation of biotechnological inventions which can be patented

Law 10/2002 sets out a positive and negative delimitation of biotechnological inventions, which can be patented.

Concerning positive delimitation, Law 10/2002 expressly states the patentability of products composed of or containing biological material (defined as material which contains genetic information capable of reproducing itself or being reproduced in a biological system) and of the processes by means of which biological material is produced, processed or used, of course provided that the inventions meet the patentability requirements set forth in Article 4.1 of the Patents Law. In this regard, Law 10/2002 specifies that, in order to be the subject of an invention, the biological material must be isolated from its natural environment or produced by means of a technical process.

Concerning negative delimitation of biotechnological inventions which can be patented, Law 10/2002 lays down certain exclusions, already provided for under the formerly applicable legislation. Regarding the possibility of denying patentability of inventions on ethical or public policy grounds, it sets forth four excluded cases: (i) processes for cloning human beings; (ii) processes for modifying the source genetic identity of human beings; (iii) uses of human embryos for industrial or commercial purposes; and (iv) processes for modifying the genetic identity of animals which are likely to cause them suffering without any substantial benefit. Likewise, regarding the non-patentability of plant varieties and animal breeds, it provides for the patentability of inventions having said subject, where the invention is not limited to a given plant variety or animal breed. A definition of essentially biological procedures for obtaining plants or animals is included, regarding the non-patentability of the same.

On the other hand, Law 10/2002 excludes patents on the human body, at the various stages of its formation and development, as well as the simple discovery of one of its elements, including the sequence or partial sequence of a gene. However, in line with the aforesaid patentability of biological material, elements isolated from the human body or otherwise produced by means of a technical process, (including the sequence or partial sequence of a gene) may constitute an invention which can be patented.

(ii)    Deposit and access to biological material

Law 10/2002 adapts the Patents Law to the provisions on deposit and access to biological material contained in Directive 98/44/EC, regulating the deposit obligation for the cases where the invention refers to a biological material not available to the public, and where the biological material may not be described in the patent application in such a way that an expert may reproduce the invention, as well as the conditions for the access to the deposited biological material through the supply of a sample.

(iii)   The scope of the patent right.

For the effective protection of the patent on a biological material, Law 10/2002 sets out that such protection shall extend to any biological material derived from that same biological material through propagation or multiplication in an identical or divergent form and possessing those same characteristics. Exceptions from this general principle are provided regarding farmers.

Given the peculiarities of the scope of the protection regarding biological reproduction or multiplication of the protected biological material, the Law expressly provides for the Community exhaustion of the biotechnological invention.

(iv)    Compulsory licences per interdependency.

Although Law 3/2000, of January 7, 2000, already implemented the provisions on compulsory licences of Directive 98/44/CE , Law 10/2002 extends the possibilities to apply for compulsory licences. In accordance with Law 10/2002, said licences may be applied for in the following cases: (i) where exploitation of the invention protected by a patent is not possible without infringing rights conferred by a prior patent or plant variety right; (ii) where it is not possible to obtain or exploit a plant variety right without infringing rights conferred by a prior patent, and (iii) where a patent’s subject is a process for the obtaining of a chemical of pharmaceutical substance protected by a patent in force. It should be noted that the person who applies for such licences must demonstrate that the plant variety or the invention constitutes a significant technical “process” of considerable economic interest compared with the invention claimed in the patent or the protected plant variety.

Law 10/2002 entered into force on May 2, 2002.

INTELLECTUAL PROPERTY

No communication to the public in hotel rooms
Resolution of the Provincial Court of Vizcaya (4th Section) of January 9, 2002.

Unlike the previous resolutions of other Provincial Courts on this matter, the Provincial Court of Vizcaya (4th Section) reaffirms in its Resolution of January 9, 2002, its position that making television sets available in hotel rooms does not amount to an act of communication to the public.

The Provincial Court of Vizcaya reproduces its Resolution of September 26, 2001, where it stated that a hotel room is a domestic space, and not a public space for the purposes of the Intellectual Property Law, on the basis of the constitutional, criminal and civil notion of “domicile” and excluding the applicability of the Supreme Court Resolutions of July 19, 1993 and March 11, 1996. Likewise, the Provincial Court of Vizcaya points out the similarity existing between the broadcast distribution system in the hotel with the systems used by residents’ associations ("comunidades de vecinos").

Intellectual property falls mainly within Community competence
Resolution of the European Court of Justice, of March 19, 2002, in case C-13/00. Commission of the European Communities vs. Ireland.

The Resolution of the European Court of Justice, of March 19, 2002 declares Ireland’s failure to fulfil its obligations under the EC Treaty (concerning the European Economic Area Agreement) by not adhering to the Berne Convention in its drafting by the Paris Act of July 24, 1971, prior to January 1, 1995.

In order determine the existence of such failure, the European Court of Justice firstly examines whether the corresponding obligations come within the scope of Community Law.

In this regard, the European Court of Justice states that the provisions of the Berne Convention cover an area which comes “in large measure” within the scope of Community competence, given that the protection of literary and artistic works is to a very great extent governed by Community legislation and falls within the scope of application of the EC Treaty.

Since the Berne Convention creates rights and obligations in areas covered by Community law, there is a Community interest in ensuring that all Contracting Parties to the EEA Agreement adhere to that Convention.

It should be noted that, in accordance with the information currently available on the web site of the World Intellectual Property Organisation and the Ministry of External Affairs, Ireland has at present only adhered to the Stockholm version and the Brussels version (Articles 22 to 38) of the Berne Convention.

PHARMACEUTICAL LAW

Parallel importation of pharmaceutical products with repackaging of the trademarked product
Resolutions of the European Court of Justice of April 23, 2002. Cases C-443/99 and C-143/00.

The European Court of Justice settles several pre-judicial questions relating, mainly, to the interpretation of Article 7.2 of Directive 89/104/EEC, of the Council, of December 21, 1998, First Council Directive on the to approximation of the laws of the Member States relating to trade marks, in connection with the case law of the Court itself in the framework of Articles 30 and 36 of the EC Treaty.

The two Resolutions take into account the case law of the European Court of Justice regarding the interpretation of Article 7.2 of Directive 89/104/EEC, stating that the holder of a trademark may call upon such trademark right in order to prevent a parallel importer marketing the pharmaceutical products in the Member State of importation where the importer has repackaged it and re-affixed the trade mark, unless the invocation of such trademark right amounts to a disguised restriction on trade between Member States, which would occur, among other cases, if it is capable of producing an artificial partitioning of the markets between Member States, contrary to Community Law. Having reaffirmed its case law on this matter, the European Court of Justice states in both Resolutions that opposition of the trade mark proprietor to the repackaging of pharmaceutical products is to be regarded as constituting artificial partitioning of markets where repackaging is objectively necessary to allow the product imported in parallel to be marketed in the relevant market or in an important part of the same, due to the fact that a significant proportion of the consumers of pharmaceutical products is suspicious of pharmaceutical products which have been relabelled.

Additionally, the Resolution issued in case C-143/00 insists on the importer’s obligation to notify the holder of the trademark of the marketing of the repackaged and relabelled pharmaceutical product prior to marketing in the Member State of importation. In this sense, the Court states that breach of this obligation by the importer allows the trademark holder to oppose the marketing of the repackaged product in the Member State of importation.