Thursday, 25 December 2008

EU procurement: Telecommunications networks and services

The EC (EU) Procurement Directive 2004/18/EC defines public telecommunications networks, network termination points, public telecommunications services and telecommunications services in Article 1.15:



15. For the purposes of Article 13, Article 57(a) and Article 68(b), the following phrases shall have the following meanings:

(a) ‘public telecommunications network’ means the public telecommunications infrastructure which enables signals to be conveyed between defined network termination points by wire, by microwave, by optical means or by other electromagnetic means;

(b) a ‘network termination point’ means all physical connections and their technical access specifications which form part of the public telecommunications network and are necessary for access to, and efficient communication through, that public network;

(c) ‘public telecommunications services’ means telecommunications services the provision of which the Member States have specifically assigned, in particular, to one or more telecommunications entities;

(d) ‘telecommunications services’ means services the provision of which consists wholly or partly in the transmission and routing of signals on the public telecommunications network by means of telecommunications processes, with the exception of broadcasting and television.


***

Recital 21

Recital 21 of the Procurement Directive or Classic Directive makes an effort to explain and to delimit the exclusion of public telecommunications contracts from the scope of the Directive:

(21) In view of the situation of effective market competition in the telecommunications sector following the implementation of the Community rules aimed at liberalising that sector, public contracts in that area should be excluded from the scope of this Directive insofar as they are intended primarily to allow the contracting authorities to exercise certain activities in the telecommunications sector. Those activities are defined in accordance with the definitions used in Articles 1, 2 and 8 of Council Directive 93/38/EEC of 14 June 1993 coordinating the procurement procedures of entities operating in the water, energy, transport and telecommunications sector, such that this Directive does not apply to contracts which have been excluded from the scope of Directive 93/38/EEC pursuant to Article 8 thereof.


***

Excluded contracts

Under Section 3 Excluded contracts, Article 13 of the Procurement Directive lays down the following rules:

Article 13
Specific exclusions in the field of telecommunications

This Directive shall not apply to public contracts for the principal purpose of permitting the contracting authorities to provide or exploit public telecommunications networks or to provide to the public one or more telecommunications services.


***

Article 57(a) and 68(b) contain further exclusions.


***

Utilities Directive 2004/17/EC

The Utilities Directive, officially the Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors (OJ 30.4.2004 L 134/1; later amendments) excluded purchases by telecommunications entities from the new Utilities Directive, as described in Recital 5:


(5) The scope of Directive 98/38/EEC covers, at present, certain contracts awarded by contracting entities operating in the telecommunications sector. A legislative framework, as mentioned in the Fourth report on the implementation of the telecommunications regulations of 25 November 1998, has been adopted to open this sector. One of its consequences has been the introduction of effective competition, both de jure and de facto, in this sector. For information purposes, and in the light of this situation, the Commission has published a list of telecommunications services which may already be excluded from the scope of that Directive by virtue of Article 8 thereof. Further progress has been confirmed in the Seventh report on the implementation of telecommunications regulations of 26 November 2001. It is therefore no longer necessary to regulate purchases by entities operating in this sector.


***

The exclusion of public telecommunications contracts from the scope of the new Utilities Directive would have brought them under the new general Procurement Directive.

The contracts by contracting authorities would have fallen under the new Procurement Directive, but Article 13 specifically excludes this.







***

Background: Effective competition

A Communication from the Commission evaluated the development of effective competition within the telecommunications sector:

Communication from the Commission pursuant to Article 8 of Directive 93/38/EEC List of services regarded as excluded from the scope of Council Directive 93/38/EEC of 14 June 1993 coordinating the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors pursuant to Article 8 thereof (OJ 30.4.2004 C 115/7)


Directive 93/38/EEC is applicable in particular to contracts awarded by telecommunications operators; however its constraints are no longer justified where there is effective competition after the liberalisation of this sector. For this purpose Article 8 of the Directive lays down that where there is effective competition in the telecommunications services market, procurements for the provision of these services may be exempted from the scope of the Directive. In its Communication on public procurement in the European Union, the Commission indicated that it would examine whether this Article could be applied.


Ralf Grahn