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9. 10.

98 EN Official Journal of the European Communities C 310/27

Answer given by Mr Flynn on behalf of the Commission

(6 April 1998)

The action (C-239/96R) which the United Kingdom filed against the Commission challenges the legality of
certain spending on budget line B3-4103.

On 24 September 1996, the President of the Court of Justice granted interim relief to the United Kingdom, which
allowed for commitments to be made but required payments to be frozen until the judgment. Following that
interim order of the President of the Court, applications for funding were evaluated and the selection of projects
deserving support was concluded. Successful applicants were informed of the conditions fixed by the Court of
Justice and invited to sign an agreement on those conditions. No payments have yet been made pursuant to any of
these agreements, since the Court has not yet delivered its final judgment. Having regard to this uncertain
situation, most applicants have delayed implementation of the projects concerned.

As a result of the pending Court of justice case, no new commitment credits were allocated to the concerned
budget line during 1997. The budget line concerning the elderly, although affected by a similar Court case, did
receive fresh commitment credits in 1997 which have also been allocated conditionally until the final judgement
is known. No other budget lines are affected.

(98/C 310/30) WRITTEN QUESTION E-0146/98

by Brian Simpson (PSE) to the Commission
(2 February 1998)

Subject: Dresser-Rand

Is the Commission aware that the Dresser-Rand Company based in Wythenshawe, United Kingdom, is to transfer
its production to Le Havre in France with the loss of 300 jobs from an ERDF Objective 2 area?

Can the Commission investigate whether this move resulted from illegal subsidies or sweeteners paid to the
company by the French authorities?

Supplementary answer
given by Mr Van Miert on behalf of the Commission
(16 April 1998)

After being contacted by the Commission, the French authorities assured it that they were so far unaware of any
plans to grant aid for the transfer by Dresser-Rand of its reciprocating compressor production activities from
Wythenshawe to Le Havre, where production is already carried out.

Moreover, if any aid were envisaged, the French authorities have undertaken to inform the Commission of the

The Commission would then be sure to ascertain whether the Community rules on state aid were being complied
with and to inform the Honourable Member of its conclusions.

(98/C 310/31) WRITTEN QUESTION E-0148/98

by Graham Mather (PPE) to the Commission
(2 February 1998)

Subject: Telecoms liberalization (accounting rates charged by dominant operators)

On 19 December 1997, the Commission announced an investigation into the cost orientation of accounting rates
charged by dominant operators, based on Article 86 of the Treaty and Directive 97/33/EC (1).
C 310/28 EN Official Journal of the European Communities 9. 10. 98

What is the timetable for this investigation, and what measures has the Commission taken to provide information
to the public about the outcome of this investigation?

What measures does the Commission envisage at this stage for improving transparency in the setting of
accounting rates (or their future equivalents)?

(1) OJ L 199, 26.7.1997, p. 32.

Answer given by Mr Van Miert on behalf of the Commission

(12 March 1998)

As the Honourable Member indicates, the Commission has opened an investigation into the level and
cost-orientation of accounting rates charged by dominant operators. The legal basis is Article 86 EC Treaty on
abuse of dominant position.

Requests for information were sent on 24 October 1997 to operators based in the Community that are dominant
or could be dominant. The Commission has received the first answers, and is presently analysing them, with the
support of an independent auditing firm.

The Commission issued a press release on 19 December 1997, in order to inform the industry and the public.
It indicated that cost-orientation is also pursued under Directive 97/33/EC of the Parliament and of the Council of
30 June 1997 on interconnection in telecommunications with regard to ensuring universal service and
interoperability through application of the principles of open network provision (ONP) (1), and that therefore the
two approaches would be co-ordinated. The two procedures are legally distinct. While competition law applies to
telecommunications operators directly, the interconnection Directive requires national telecommunications
regulators to ensure that operators with significant market power apply the principle of cost-orientation to
national and cross-border interconnection charges.

Currently, the United Kingdom is the only Member State to publish international accounting rates. Most
operators and regulators consider accounting rates as business secrets, since they are the result, not only of
applying guidelines set at international level International telecommunications union (ITU), but also of
commercial negotiations. The Commission welcomes current discussions at the ITU, which aim at reforming the
accounting rates system, but it cannot say yet whether confidentiality of international accounting rates would be
lifted. The Commission has not, at this stage, taken initiatives to require publication of accounting rates within
the Community.

As the Honourable Member rightly suggests, within the Community international accounting rates have to be
replaced to a large extent by other price mechanisms, based on cross-border interconnection. Community law
requires operators with significant market power to publish their interconnection charges, covering both national
and cross-border interconnection at cost-orientated prices. The Commission Recommendation on interconnec-
tion pricing (2), which requires this, shows the interconnection charges in Member States. The cost-oriented
interconnection rates published to date are significantly lower than the corresponding international accounting
rates. These lower rates should translate into substantially lower prices for intra-Community telephone calls.

(1) OJ L 199, 26.7.1997.

(2) COM(98) 50 final.