Recent case law developments: there is no technological neutrality for licence fees?

There has been several interesting Court jugements in the last few months. The last of those is the case C-85/10 Telefónica Móviles España SA. of today.

In this preliminary ruling the CJEU held that:

The requirements laid down in Article 11(2) of Directive 97/13/EC of the European Parliament and of the Council of 10 April 1997 on a common framework for general authorisations and individual licences in the field of telecommunications – under which a charge imposed on operators of telecommunications services for the use of scarce resources must seek to ensure optimal use of those resources and must take into account the need to foster the development of innovative services and competition – must be interpreted as not precluding national legislation which provides for a fee to be levied on operators of telecommunications services holding individual licences for the use of radio frequencies, but does not allocate a specific use to the income derived from that fee, and which significantly increases the fee for a particular technology but leaves it unchanged for another.

The Court held that a licence fee might not be too low or too high.

According to the ECourt, "An excessive charge is likely to discourage the use of the scarce resources at issue and thereby result in under-utilisation of those resources. Similarly, too low a charge risks undermining the efficiency of the use of those resources". This seems somehow contradictory with the Commission statement in the state aid UMTS Czech case that"At no point the applicable EU regulatory framework imposes that Member States should require market prices for the licences they award. ”. (Case n° NN 76/2006 – Czech Republic, Award of the third UMTS licence).

Of particular interest are also §§ 34 to 36 of the court's decision which suggest that the fee can/must be technology specific. They are reproduced below:

"Furthermore, the requirements that a charge imposed on operators of telecommunications services for the use of scarce resources must ensure an optimal use of those resources and must take account of the need to foster the development of innovative services and competition cannot, in light of the foregoing, preclude Member States from establishing, for the purposes of determining the amount of that charge, a distinction – even a significant one – between, on the one hand, the digital or analogue technology used and, on the other, within each technology, the different uses which are made of it, so that equality of opportunity is secured as between the various economic operators.
35 In addition, those requirements cannot, in principle, prevent Member States from increasing, even significantly, the charge payable for a particular technology in response to both technical and economic developments on the market for telecommunications services, but leaving unchanged the charge for another technology, provided that the different amounts imposed reflect the respective economic values of the uses made of the scarce resource at issue.
36 Lastly, the sole fact that such an increase in the amount of the charge is substantial – which, in the present case, is common ground between the parties which submitted written observations to the Court – does not in itself mean that this is incompatible with the purpose that a charge for the use of scarce resources must have under Article 11(2) of Directive 97/13, in so far as the requirements arising from that purpose are respected, that is to say, provided that the charge is neither excessive nor too low.