Emanuela Lecchi

1. Effective and timely Telecom Sector Dispute Resolution to achieve regulatory agenda: The European Case Emanuela Lecchi

2. Telecommunications regulatory agenda

3. Three telecoms trends Privatisation across the world • Privatisation • Deregulation and cross-border competition • Massive infrastructure projects • Opening of networks - incumbents and new entrants on fixed and mobile networks Privatisation landscape. Source: ITU Telecom Regulatory Survey 2003

4. Achieving the “regulatory agenda” • Regulatory agenda = development of a liberalised telecommunications sector with stable and sustainable competition between operators. Sector-specific rules Commercial and admin laws Competition law

5. The Rules of the Game • 2 sets of rules: • Telecom- specific regulation (e.g. for interconnection) and licensing • Competition/ antitrust • Effective and timely enforcement of both is key, to prevent the impedance of technical and economic development.

6. Disputes and resolution

7. The increase and nature of disputes Incumbent operators Between companies in contractual relation New entrants Interests Disputes Regulators Rights Between consumers and companies Power Arising out of tort

8. The nature of disputes: incumbents and new entrants Interconnection Anti-competitive behaviour Interests Disputes Operator obligations Power Rights Cross-border Consumers/ end-users Licence, authorisation, registration

9. The mechanism, generally • Regulator takes a decision to apply the rules; • The incumbent/ new entrants have a system to deal with disputes. • Important factors: • Timescale • Cost • Transparency – Confidentiality • Enforcement – Remedies - Appeals • Efficient dispute resolution precondition to equal substantive rights and obligations.

10. “Dispute Resolution” • A wider perspective: not only court enforcement, mediation and arbitration, but also “co-regulation” and “self-regulation” (e.g. industry delivers codes of practice, overseen by Ombudsman; consumer panels…).

11. Dispute resolution framework Negotiation Voluntary settlement Mediation and conciliation Dispute resolution mechanisms Institutional Binding arbitration Ad hoc Proceedings in national court

12. Dispute resolution mechanisms ITU World Telecommunication Regulatory Database, 2003-2004

13. European framework

14. European structure European framework National framework Regulation

15. In Europe: • After 10-15 years, great degree of harmonisation of the Rules of the Game. • Objective to promote competitive European market, benefit the European citizen and consolidate the internal market. • EU Framework Directive 2002 – harmonises framework for telecom regulation. • Allows NRAs to refuse to determine dispute if ADR available. • NRAs to resolve disputes in shortest timeframe with maximum 4 months.

16. EU Regulatory framework: cross-border disputes Cooperation in investigation Resolution and enforcement MS shall make provisions for NRAs to jointly decline or coordinate in resolving Cross-border disputes Joint competence- common deliberations Competence of one NRA Within competence of NRAs from more than one MS Right of appeal

17. But, • Great disparity in enforcement: • Timescale variations from one month to no time limit at all • Different levels of transparency (closed to NRA only, closed to parties involved, open to 3rd p. upon request, open considered as public info, published info) • Different provisions for confidentiality (personal data, info with impact on national security, commercial or industrial information) • Different administrative procedures • Different appeal and enforcement of decisions

18. e.g. Enforcement of NRA decisions ECC Report 43, Dispute Resolution Settlement Procedures, October 2003

19. E.g.UK regulatory landscape – Dispute resolution mechanisms

20. UK regulatory options - Ofcom Facilitation Informally Speed Low cost Commercial focus TA Alternative dispute resolution Industry resolution Under the Communications Act Dispute Legal certainty Access to info But lengthy up to 4m Costly: £150K per dispute Refer to 3rd party (where not raise public policy) Adjudication Regulatory (where core policy) Bias against intervention Least intrusive means

21. Telecoms Adjudicator (TA) Facilitate discussions Facilitation Non-binding Make recommendations (0-1 wk) Ofcom TA Referred to Ofcom if significant financial issue TA rulings Under TA Agreement (0-3 wks) Dispute resolution Binding (enforceable in courts) TA adjudication Under Communications Act (0-4 wks)

22. UK Communications Act 2003 • In performing its duties, OFCOM must have regard, amongst others, to “the desirability of promoting and facilitating the development and use of effective forms of self-regulation” (s. 3(4)(c)) • Ofcom can decline to resolve dispute if alternative means. Guidelines for ADR.

23. ADR in Communication Act 2003 Both parties dominant in same market None of parties dominant Such disputes in other industries usually not requiring regulator intervention ADR Failure to agree would not lead to welfare loss Resolution by Ofcom Large number of parties involved One of parties dominant

24. Also private dispute resolution organisations, approved by Ofcom: • Ombudsman-type negotiation e.g. OTELO: • Independent and impartial • User-friendly • Transparent • Effective • Free of charge to customer • Able to properly investigate disputes and awarded appropriate compensation.

25. Effectiveness– European statistics

26. Important objectives for dispute resolution • Efficiency in speed and cost • Efficacy in enforcement and durability of enforcement • Certainty

27. Deficiencies in European dispute resolution • Time frames • Business secrets • Appeals: delays, suspension of regulatory decisions… • Legal uncertainty • No clear rules on procedure • Jurisdictional complexity (nature of dispute / commercial; nature of settlement decision / admin)

28. Comparative table: Regulatory decisions and Appeals Source: M. Andenas, S. Zleptnig, Telecoms Dispute Resolution: Procedure and Effectiveness, BIICL, 2004

29. Trends in European telecom dispute resolution • Framework Directive- timelines shortened. • Refining regulatory adjudication and reducing appeal processes. • New telecom-specific dispute resolution mechanisms e.g. UK TA.

30. Conclusions

31. Importance of effective mechanisms • Dispute resolution central and integral part of Telecoms Regulation. • Efficient regulation and dispute resolution preconditions to equal rights and obligations. • Consistency across Europe needed, to level playing field and encourage further investment. • Mediation and other ADR schemes to be encouraged. • Cooperation of NRAs paramount to ensure consistency across Europe.

32. “The European Telecom Industry relies heavily on effective decision-making which is both timely and coherent when a dispute arises”. (S. Zleptnig, C. Van Dam, Dispute resolution: Procedure and effectiveness, BIICL 2004)

33. “Clear, predictable, and transparent legal rules on jurisdiction are crucial to the growth of electronic commerce on a global scale. Without jurisdictional rules that make sense for businesses, growth of electronic commerce will encounter legal barriers and retard economic benefits to all societies. Equally important is the issue of consumer protection and remedy mechanisms that are critical to build consumer confidence in using the electronic medium for purchasing goods and services.” Global Business Dialogue on Electronic Commerce, Jurisdiction, September 1999

34. Best practice model • Reduce legal uncertainty. • Provide regulators means and powers necessary. • Ensure disputes resolved as quick as possible, within statutory limits. • Design clear rules on confidentiality of business secrets. • Establish effective appeals procedures. • Establish prompt review of admin decisions. • Have clear rules on locus standi and 3rd p. rights. • Limit appeals on merits to one instance.