1 July 2010: ECJ case C-99/09 Polska Telefonia Cyfrowa (PTC)
This judgment concerned interpretation of Article 30(2) of Directive 2002/22/EC - Universal Service Directive. Pursuant to this Article:
"[NRAs - National Regulatory Authorities] shall ensure that pricing for interconnection related to the provision of number portability is cost oriented and that direct charges to subscribers, if any, do not act as a disincentive for the use of these facilities."
First of all, to all the laymen between us - what does porting numbers/number portability mean? The concept of number portability covers the facility available to a telephone subscriber to retain the same number when changing operators. (Par. 15) Most of us, at one point or another, were not happy with our (mobile) phone providers and considered making a switch. One of the factors that effectively stopped us from making that step was the fact that we did not want to go through the trouble of changing our phone number and having to let everyone we have ever met know what our new number is. Anyone who has ever lost their phone knows what a bother it is. EU authorities were aware of that and realized that consumers not being able to keep their old number (or having to pay for the switch of the number) was an obstacle to consumers' freedom of choice and effective competition. (Par. 17) That is why the Universal Service Directive required the phone providers to facilitate number portability and obligated the national authorities to ensure that the price for that service will not dissuade the consumers from making the switch. The operators may charge the consumers since they have to make certain costs to facilitate that service, but that price has to be not only compatible with the costs they made but also not dissuade the consumers from switching. (Par. 19)
In the given case a Polish company - Polska Telefonia Cyfrowa (PTC) - requested a one time fee from its subscribers for porting their number to another operator. The amount of the fee (ca. 30 Euro) was deemed to be too high by the Polish authority enforcing the Universal Service Directive: Urzad Komunikacji Elektronicznej (UKE). PTC claimed that they set the amount of the fee based on the costs they had made and therefore the fee was reasonable. UKE considered the fee to be too high for the Polish consumers.
The ECJ confirmed the view of PTC that the amount of the fee should depend on the costs encumbered by the phone providers, however, it could not be a decisive factor in estimating its height. Namely, the national authorities have a right to establish the maximum height of the fee up front, taking into account what prices dissuade the consumers from switching between operators. (Par. 21)
The ECJ decided further that: (Par. 25-26)
"(...) the NRA has the task, using an objective and reliable method, of determining both the costs incurred by operators in providing the number portability service and the level of the direct charge beyond which subscribers are liable not to use that service. Following that examination, the NRA must oppose, if necessary, the application of a direct charge which, although in line with those costs, would, in light of all the information at the disposal of the NRA, be a disincentive to the consumer."
The decision of the ECJ in this case is very clear and consumer-friendly. Even though it might seem that the PTC got the confirmation it wanted, the ECJ managed to turn the question around and put a limitation on the interpretation of Article 30(2) of the Universal Service Directive.
From a bit personal perspective (coming from Poland)... it was about time someone stood up to the Polish phone operators and limited their powers.
This judgment concerned interpretation of Article 30(2) of Directive 2002/22/EC - Universal Service Directive. Pursuant to this Article:
"[NRAs - National Regulatory Authorities] shall ensure that pricing for interconnection related to the provision of number portability is cost oriented and that direct charges to subscribers, if any, do not act as a disincentive for the use of these facilities."
First of all, to all the laymen between us - what does porting numbers/number portability mean? The concept of number portability covers the facility available to a telephone subscriber to retain the same number when changing operators. (Par. 15) Most of us, at one point or another, were not happy with our (mobile) phone providers and considered making a switch. One of the factors that effectively stopped us from making that step was the fact that we did not want to go through the trouble of changing our phone number and having to let everyone we have ever met know what our new number is. Anyone who has ever lost their phone knows what a bother it is. EU authorities were aware of that and realized that consumers not being able to keep their old number (or having to pay for the switch of the number) was an obstacle to consumers' freedom of choice and effective competition. (Par. 17) That is why the Universal Service Directive required the phone providers to facilitate number portability and obligated the national authorities to ensure that the price for that service will not dissuade the consumers from making the switch. The operators may charge the consumers since they have to make certain costs to facilitate that service, but that price has to be not only compatible with the costs they made but also not dissuade the consumers from switching. (Par. 19)
In the given case a Polish company - Polska Telefonia Cyfrowa (PTC) - requested a one time fee from its subscribers for porting their number to another operator. The amount of the fee (ca. 30 Euro) was deemed to be too high by the Polish authority enforcing the Universal Service Directive: Urzad Komunikacji Elektronicznej (UKE). PTC claimed that they set the amount of the fee based on the costs they had made and therefore the fee was reasonable. UKE considered the fee to be too high for the Polish consumers.
The ECJ confirmed the view of PTC that the amount of the fee should depend on the costs encumbered by the phone providers, however, it could not be a decisive factor in estimating its height. Namely, the national authorities have a right to establish the maximum height of the fee up front, taking into account what prices dissuade the consumers from switching between operators. (Par. 21)
The ECJ decided further that: (Par. 25-26)
"(...) the NRA has the task, using an objective and reliable method, of determining both the costs incurred by operators in providing the number portability service and the level of the direct charge beyond which subscribers are liable not to use that service. Following that examination, the NRA must oppose, if necessary, the application of a direct charge which, although in line with those costs, would, in light of all the information at the disposal of the NRA, be a disincentive to the consumer."
The decision of the ECJ in this case is very clear and consumer-friendly. Even though it might seem that the PTC got the confirmation it wanted, the ECJ managed to turn the question around and put a limitation on the interpretation of Article 30(2) of the Universal Service Directive.
From a bit personal perspective (coming from Poland)... it was about time someone stood up to the Polish phone operators and limited their powers.
