Appendix


Table 1: Definition of the unfair burden in several EU countries

Country

Definition of unfair burden

Austria

Considers that there is no unfair burden where the USP market share exceeds 80%.

Germany

According to the legal framework, regulatory intervention only takes place where the market is not able to provide the service. So far, the market has provided the US on its own, and thus an USP has not been yet designated. Consequently, no regulatory measure has been yet applied, including the definition of unfair burden.

Bulgaria

Considers that there should not be any compensation where the USP market share, measured on the basis of revenues, is equal to or exceeds 80% and where less that 17% of total USP subscribers use price packages for economic reasons.

Croatia

Considers that there should not be any compensation where the USP market share, measured on the basis of revenues, exceeds 80%.

Spain

It was considered that the USP did not incur in a significant competitive disadvantage from 2000 to 2002 on account of the provision of US, and thus no compensation was paid. As far as 2003 and the subsequent years are concerned, the Regulator considered that an unfair burden occurred due to the telecommunications market evolution and interdependence between the fixed telephone service and mobile services.

Finland

The Regulator has never calculated CLSU nor defined the notion of unfair burden. According to the legislation, the definition of unfair burden must consider the ratio between the size and volume of the business. 

France

The Regulator has always considered CLSU to constitute an unfair burden. It assesses whether CLSU are considered an unfair burden on the basis of a set of elements, namely: i) the weight of CLSU v.s. financial risks entered in the accounts and annual report of the France Télécom Group; and ii) the comparison of the value of CLSU and the implementation and management costs of the financing mechanism.

Ireland

Comreg has recently published a public consultation indicating that it intends to assess whether US burden are unfair, on the basis of static and dynamic criteria, such as, among other, price variations, profitability and financial indicators. It also refers that the possible existence of "cherry picking" demonstrates a level of competition that prevents the USP from internalizing costs with the US provision.

Italy

The Regulator has always acknowledged the existence of unfair burden, having declared in 2002 that it has used data provided by operators to assess the level of competition in the telecommunications market. The results of the analysis showed that the level of competition had improved, in opposition to the preceding years. More specifically, the market share of Telecom Italia’s telephony traffic volume has decreased from 82% in 2000 to 79% in 2001. The same tendency was identified in market revenues of Telecom Italia’s telephony traffic which, for the same period, decreased from 81% to 77%. The general telecommunications market, in terms of revenues, fell 1% against the increase in 7% of traffic volume.

Lithuania

Considers that there is an unfair burden where the USP market share in former markets 1 and 2 of EC Recommendation, measured on the basis of revenues, is lower than 80%.

United Kingdom

Until 2006, the regulator considered that there was no unfair burden, referring that "BT's overall level of profitability, after taking into account the costs of US, exceeded what BT needed to cover its full costs and make reasonable return". The Regulator in analysing now the matter for the subsequent years.

Czech Republic

The total value of CLSU is considered to be an unfair burden.

The assessment of unfair burden applies the following criteria: i) a comparison between USP’s net costs and pre-tax results and ii) a comparison between USP's net costs and total sum of revenues arising from the USP performance in communications activities.

Romania

The total value of CLSU is considered to be an unfair burden.

Sweden

In June 2008, the Regulator decided not to impose any US obligation (even though there are zones of the country where the service is not provided).

Source: COCOM07-08 final of 04.05.2007 ''Universal Service Implementation Issues - results and analysis of replies from Member States on universal service financing'' (available at CIRCAhttp://circa.europa.eu/Public/irc/infso/cocom1/library?l=/public_documents_2007&vm=detailed&sb=Title on 06.12.2010); Study by Wik-Consult GmbH "Methodology for calculating the net cost of PTC's universal service obligation (USO) and the definition of an "excessive burden"; websites of National Regulatory Authorities or line Ministries 1 e Cullen International Benchmark - Supply of services in monitoring of South East Europe - telecommunications services sector and related aspects, of 30.11.2007.

Notes
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1 Austria: Telecommunications Act 2003 - TKG 2003 art. 31º (available at RTRhttp://www.rtr.at/en/tk/TKG2003, on 06.12.2010).
Ireland: Costing of universal service obligations: Principles and methodologies (available at ComReghttp://www.comreg.ie/publications/costing_of_universal_service_obligations__principles_and_methodologies.597.103738.p.html).
Spain: specific determination on CLSU, vide in particular ''Resolución sobre la estimación del coste neto de prestación del servicio universal en los años 2003, 2004 y 2005 propuesto por Telefónica de España. S.A.U. (MTZ 2007/1015)'' de 29.11.2007 (available at CMThttp://www.cmt.es/cmt_ptl_ext/SelectOption.do on 06.12.2010).
Finland: Communications Market Act article 60a (available at FICORAhttp://www.ficora.fi/en/index/saadokset/lait/vml.html. on 06.12.2010).
Lithuania: ''The Rules for provision of the universal electronic communications services '' (Government of the Republic of Lithuania/Resolution/162/2006 02 15/came into force 2006 07 01/Official Gazzette Valstyb?s znios'2006 Nr.23-749), available at RRThttp://www.rrt.lt/index.php?1474121543 on 10.01.2011.)
Czech Republic: Decree no. 388/2006 Coll. Section 3 (available at MPOhttp://www.mpo.cz/dokument71491.html on 13.12.2010.
France: Décision n.º 2010-0448 fixant les évolutions définitives du coût du service universel et les contributions des opérateurs pour l'année 2008 (available at ARCEPhttp://www.arcep.fr/index.php?id=8102#c17580 on 10.01.2011.)