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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> KPN Group Belgium SA v Etat belge [2012] EUECJ C-375/11 (25 October 2012) URL: http://www.bailii.org/eu/cases/EUECJ/2012/C37511.html Cite as: [2012] EUECJ C-375/11

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OPINION OF ADVOCATE GENERAL

JÄÄSKINEN

delivered on 25 October 2012 (1)

Case C-375/11

Belgacom SA

Mobistar SA

KPN Group Belgium SA

v

État belge

(Reference for a preliminary ruling from the Cour constitutionnelle (Belgium))

(Telecommunications services – Directive 2002/20/EC – Rights of use of radio frequencies – One-off fees for grant and renewal – Method of calculation – Alteration of existing rights – Alleged retroactive application of Directive 2002/20 by a Member State)

I –  Introduction

1.        This dispute calls on the Court to consider whether, under EU telecommunications law, renewal of usage rights to telecommunications radio frequencies can be subject to charges in the same way as the initial grant of such rights. The crux of the matter lies in determining whether it is legitimate for the Member States to impose further one-off fees for the usage of radio frequencies, in circumstances in which telecommunications operators have already paid a substantial one-off fee upon entering the market, and when they already pay an annual fee that is connected to usage rights.

2.        The Cour constitutionnelle (Constitutional Court) (Belgium) has sent an order for reference in the context of a dispute between, on the one hand, Belgacom SA (‘Belgacom’), Mobistar SA (‘Mobistar’) and KPN Group Belgium SA (‘KPN Group Belgium’) and on the other, the Belgian State, given that the former contest the compatibility of charges imposed by the latter with Articles 3, 12 and 13 of Directive 2002/20/EC of the European Parliament and of the Council of 7 March 2002 on the authorisation of electronic communications networks and services (the ‘Authorisation Directive’). (2) Articles 12 and 13 are the successor measures to Article 11 of Directive 97/13/EC (now repealed). (3) The Court is also asked whether Article 14 of the Authorisation Directive, which concerns modification by Member States of existing rights and obligations of telecommunications operators, impedes the Belgian Government in levying the charge in issue.

3.        Directive 97/13 restrained the powers of Member States to levy charges against telecommunications companies. Member States may not impose any fees or charges in relation to the provision of networks and electronic communication services other than those provided for by Directive 97/13. (4) The Court confirmed the same with respect to the Authorisation Directive earlier this year in Vodafone España. (5)

II –  Legal framework

A –    European Union (‘EU’) law

4.        Article 8 (2) of the Framework Directive provides:

‘The national regulatory authorities shall promote competition in the provision of electronic communications networks, electronic communications services and associated facilities and services by inter alia:

…;

(d) encouraging efficient use and ensuring the effective management of radio frequencies and numbering resources.’

5.        Recitals 31 to 33 of the Authorisation Directive state as follows:

‘(31) Systems for administrative charges should not distort competition or create barriers for entry into the market. …

(32) In addition to administrative charges, usage fees may be levied for the use of radio frequencies and numbers as an instrument to ensure the optimal use of such resources. Such fees should not hinder the development of innovative services and competition in the market. This Directive is without prejudice to the purpose for which fees for rights of use are employed. Such fees may for instance be used to finance activities of national regulatory authorities that cannot be covered by administrative charges. Where, in the case of competitive or comparative selection procedures, fees for rights of use for radio frequencies consist entirely or partly of a one-off amount, payment arrangements should ensure that such fees do not in practice lead to selection on the basis of criteria unrelated to the objective of ensuring optimal use of radio frequencies. ...

(33) Member States may need to amend rights, conditions, procedures, charges and fees relating to general authorisations and rights of use where this is objectively justified. Such changes should be duly notified to all interested parties in good time, giving them adequate opportunity to express their views on any such amendments.’

6.        Article 3 of the Authorisation Directive is entitled ‘General authorisation of electronic communications networks and services’ and establishes the principle of freedom to provide electronic communications networks and services subject to a general authorisation.

7.        Article 12 of the Authorisation Directive is entitled ‘Administrative charges’. Article 12 provides:

‘1. Any administrative charges imposed on undertakings providing a service or a network under the general authorisation or to whom a right of use has been granted shall:

(a)      in total, cover only the administrative costs which will be incurred in the management, control and enforcement of the general authorisation scheme and of rights of use and of specific obligations as referred to in Article 6(2), which may include costs for international cooperation, harmonisation and standardisation, market analysis, monitoring compliance and other market control, as well as regulatory work involving preparation and enforcement of secondary legislation and administrative decisions, such as decisions on access and interconnection; and

(b)      be imposed upon the individual undertakings in an objective, transparent and proportionate manner which minimises additional administrative costs and attendant charges.

2. Where national regulatory authorities impose administrative charges, they shall publish a yearly overview of their administrative costs and of the total sum of the charges collected. In the light of the difference between the total sum of the charges and the administrative costs, appropriate adjustments shall be made.’

8.        Article 13 of the Authorisation Directive is entitled ‘Fees for rights of use and rights to install facilities’. Article 13 provides:

‘Member States may allow the relevant authority to impose fees for the rights of use for radio frequencies or numbers or rights to install facilities on, over or under public or private property which reflect the need to ensure the optimal use of these resources. Member States shall ensure that such fees shall be objectively justified, transparent, non-discriminatory and proportionate in relation to their intended purpose and shall take into account the objectives in Article 8 of Directive 2002/21/EC (Framework Directive).’

9.        Article 14 of the Authorisation Directive is entitled ‘Amendment of rights and obligations’ (6) and provides:

‘1. Member States shall ensure that the rights, conditions and procedures concerning general authorisations and rights of use or rights to install facilities may only be amended in objectively justified cases and in a proportionate manner. Notice shall be given in an appropriate manner of the intention to make such amendments and interested parties, including users and consumers, shall be allowed a sufficient period of time to express their views on the proposed amendments, which shall be no less than four weeks except in exceptional circumstances.

2. Member States shall not restrict or withdraw rights to install facilities before expiry of the period for which they were granted except where justified and where applicable in conformity with relevant national provisions regarding compensation for withdrawal of rights.’

10.      Part B of the Annex to the Authorisation Directive is entitled ‘Conditions which may be attached to rights of use of radio frequencies’. Point 6 of Part B provides for:

‘Usage fees in accordance with Article 13 of this Directive’.

B –    National law

11.      Article 2 of the Law of 15 March 2010 essentially provides as follows:

‘Article 30 of the Law of 13 June 2005 on electronic communications, is amended as follows:

1. Between paragraphs 1 and 2, the following paragraphs 1/1, 1/2, 1/3 and 1/4 are inserted:

1/1. For the purpose of [ensuring optimal use of these resources], operators authorised to hold rights of use for radio frequencies in order to operate a network and to provide mobile electronic communications services to the public shall pay, at the beginning of the period of validity of the rights of use, a one-off fee.

The one-off fee is determined when frequencies are assigned.

The one-off fee shall be:

1.       EUR 51 644 per MHz and per month for frequency bands 880-915 MHz and 925-960 MHz. …;

2.       EUR 20 833 per MHz and per month for frequency bands 1920-1980 MHz and 2110-2170 MHz, …;

3.      EUR 2 778 per MHz and per month for frequency bands 2500-2690 MHz.

Where frequencies are assigned [by] auction, the minimum amount of the one-off fee referred to in this paragraph shall constitute the candidates’ opening bid.

1/2. In respect of each period of renewal of an authorisation, operators shall pay a one-off fee.

The amount of the one-off fee shall correspond to the one-off fee referred to in the first subparagraph of Article 1/1.

In calculating the amount of the one-off fee, account shall be taken of the particular rights of use which the operator wishes to retain following renewal.

1/3. (Payment of the one-off fee)

In no case shall the one-off fee be reimbursed, in whole or in part.

1/4. (Withdrawal of rights of use in the event of failure to pay the one-off fee)

…’

12.      Article 3 of the Law of 15 March 2010 provides:

‘As a transitional measure, if the deadline for declining tacit renewal of an authorisation has already expired by the time the present law enters into force, operators may nevertheless decline renewal of their rights of use up to the first day of the new, extended period of rights of use, without being required to pay the one-off fee relating to such new period.’

III –  The dispute in the main proceedings and the questions referred for a preliminary ruling

13.      The reference for a preliminary ruling has been made in the context of litigation in which Belgacom, Mobistar, and KPN Group Belgium contest the conformity of fees due by these operators under Articles 2 and 3 of the Law of 15 March 2010, modifying Article 30 of the Law of 13 June 2005, with Articles 3, 12, 13 and 14 of the Authorisation Directive.

14.      Belgacom, Mobistar, and KPN Group Belgium are operators of mobile telephone networks who from 1995 were afforded various authorisations for frequency bands for the provision of mobile telecommunications services.

15.      At the time of each grant of these authorisations, Belgacom, Mobistar, and KPN Group Belgium, were required to pay:

–        a ‘one-off grant fee’;

–        an annual fee for the provision of the frequencies;

–        an annual charge for the administration of the authorisations.

16.      By a decision of 25 November 2008, the ‘Institut belge des services postaux et des télécommunications’ (‘IBPT’) renounced the tacit renewal of the authorisations to use second generation radio frequencies that had been given to Belgacom, Mobistar, and KPN Group Belgium, for the end of imposing a new fee, and to put in place a policy for this spectrum that was as efficient as possible. But Belgacom’s authorisation had already been tacitly renewed for a period of five years, beginning on 8 April 2010 and expiring on 8 April 2015, while that of Mobistar had already been tacitly renewed for a period running from 27 November 2010 to 27 November 2015.

17.      Belgacom, Mobistar, and KPN Group Belgium challenged this decision before the Brussels Court of Appeal. The decision was annulled by that court in a judgment of 20 July 2009 concerning Belgacom, and a judgment of 22 September 2009 concerning Mobistar. Following these judgments, the IBPT decided to withdraw its decision of 25 November 2008 concerning KPN Group Belgium, to ensure identical treatment of all three operators.

18.      After these judgments of the Brussels Court of Appeal, on 15 March 2010 the Belgian legislator adopted a law modifying Article 30 of the Law of 13 June 2005 concerning electronic communications. Articles 2 and 3 of the Law of 15 March 2010 envisage:

–        a ‘one-off fee’, to replace the ‘one-off grant fee’ levied against mobile telephone operators with a view to guaranteeing optimal use of these radio frequencies, and which is due not only at the time of granting these authorisations and the right to use radio frequencies, but equally at each renewal of an existing authorisation. The sum of this one-off fee varies as a function of the radio frequencies concerned. It is determined on the basis of ‘one-off grant fee’ paid by the operators when they received their authorisation for the first time, either by a competitive procedure or by auction on assignment of frequencies;

–        the option for mobile telephone operators to renounce their tacitly renewed usage rights without being required to pay the one-off fee for the renounced rights.

19.      At the same time the obligation on the part of mobile telephone operators to pay the two annual fees was preserved. That is, a fee aimed at covering the cost of making the frequencies available and a charge aimed at covering the administration of the authorisation.

20.      Belgacom, Mobistar and KPN Group Belgium introduced an action before the Cour constitutionnelle seeking the annulment of Articles 2 and 3 of the Law of 15 March 2010. They argued that these provisions are contrary to Articles 3, 12, 13 and 14 of the Authorisation Directive. They do not accept, more precisely, that the one-off fee is due not only at the time of the grant of the authorisation, but equally at its renewal. They also object to the fact that it is additional to the annual fee paid for making the frequencies available. Belgacom, Mobistar and KPN Group Belgium equally contest the amount to be paid, and the method of calculating the one-off fee, in that it should be calculated as a function of the market value for the operators, and not as a function of the economic value of the frequencies.

21.      According to the Belgian Government, since the order for reference was sent by the Cour consitutionnelle on 16 June 2011, auctions have given rise to the grant, to a fourth operator, of a final lot of frequencies in the 2 GHz frequency with a view to exploiting a third generation network. Auctions for the grant of frequencies in 2.6 GHz band commenced in October 2011. This frequency supports fourth generation services.

22.      The Cour constitutionnelle indicates in its preliminary reference that it follows from the travaux preparatoires of the Law of 15 March 2010 that the one-off fee constitutes an indemnity for the use of frequencies and pursues a goal that is identical to the annual fees for making the frequencies available without substituting the payment of the latter fees. According to the Belgian legislature, Articles 2 and 3 of the Law of 15 March 2010, the validity of which is contested before the Cour constitutionnelle, are in conformity with the Authorisation Directive, because it envisages a division of fees due for rights of use, namely between fees due for rights of use on a one-off basis and an annual basis. On the one hand, the one-off fee would cover the right to use these frequencies and would correspond to the value of the spectrum as a scarce resource, while the annual fee would cover the cost of using these frequencies, that is the control, co-ordination, examination and other activities of the competent authority.

23.      The Cour constitutionnelle recognises that there exists a divergence in views between the parties in the main proceedings on the conformity of the one-off fee envisaged by the Law of 15 March 2010 with Articles 3, 12 and 13 of the Authorisation Directive. Moreover, their opinions differ on the interpretation and applicability of Article 14 of the Authorisation Directive concerning the method for fixing the sum of the one-off fee.

24.      In these circumstances, the Cour constitutionnelle decided to send the following four questions to the Court for a preliminary ruling pursuant to Article 267 TFEU;

‘1.      Do Articles 3, 12 and 13 of Directive 2002/20/EC of the European Parliament and of the Council of 7 March 2002 on the authorisation of electronic communications networks and services (Authorisation Directive), as they currently apply, permit Member States to charge operators holding individual rights to use mobile phone frequencies for a period of 15 years, in the context of authorisations to install and operate on their territory mobile phone networks issued under the scheme instituted under the former legal framework, a one-off fee for the renewal of their individual rights to use frequencies the amount of which, relating to the number of frequencies and months to which the rights of use relate, is calculated on the basis of the former one-off grant fee that was associated with the issue of the aforementioned authorisations, when that one-off fee is additional to both an annual charge for making frequencies available (intended first and foremost to cover the costs of making frequencies available while at the same time also partially reflecting the value of frequencies, the purpose of the one-off fee and the annual charge being to encourage optimal use of the frequencies) and a charge covering the cost of managing the authorisation?

2.      Do Articles 3, 12 and 13 of the same Authorisation Directive permit the Member States to charge operators hoping to acquire new rights to use mobile phone frequencies a one-off fee the amount of which is determined at auction on the assignment of frequencies, in order to reflect the value of frequencies, when that one-off fee is additional to both an annual charge for making frequencies available (intended first and foremost to cover the costs of making frequencies available while at the same time also partially reflecting the value of frequencies, the purpose of the one-off fee and the annual charge being to encourage optimal use of the frequencies) and an annual charge for the management of authorisations to install and operate mobile phone networks issued under the scheme instituted under the former legal framework?

3.      Does Article 14(2) of the same Authorisation Directive permit the Member States to charge mobile phone operators, in respect of the renewal of their individual rights to use mobile phone radio frequencies, to which certain of them were already entitled, before the beginning of the renewal period, a one-off fee relating to the renewal of the rights to use frequencies they enjoyed before the renewal period, intended to encourage optimal use of the frequencies by way of reflecting their value, when that one-off fee is additional to both an annual charge for making frequencies available (intended first and foremost to cover the costs of making frequencies available while at the same time also partially reflecting the value of frequencies, the purpose of the one-off fee and the annual charge being to encourage optimal use of the frequencies) and an annual charge for the management of authorisations to install and operate mobile phone networks issued under the scheme instituted under the former legal framework?

4.      Does Article 14(1) of the same Authorisation Directive permit the Member States to add, as a condition of acquiring and renewing rights to use frequencies, a one-off fee that is determined at auction, without limit, when that one-off fee is additional to both an annual charge for making frequencies available (intended first and foremost to cover the costs of making frequencies available while at the same time also partially reflecting the value of frequencies, the purpose of the one-off fee and the annual charge being to encourage optimal use of the frequencies) and an annual charge for the management of authorisations to install and operate mobile phone networks issued under the scheme instituted under the former legal framework?’

25.      Belgacom, Mobistar, KPN Group Belgium, the Governments of Belgium, Cyprus, the Netherlands and Lithuania, and the European Commission have submitted written observations. All except the Governments of Cyprus, the Netherlands and Lithuania participated at the hearing of 11 June 2012.

IV –  Analysis

A –    Preliminary observations

1.      Overview of relevant legal principles

26.      The setting of fees in the telecommunications sector involves complex economic assessments, so that the national authorities cannot be required to comply with rigid criteria in that regard, provided that they remain within the limits resulting from EU law. (7) The Court has held that the national court must ‘determine the economic value of the licences concerned, taking account inter alia of the size of the different frequency clusters allocated, the time when each of the operators concerned entered the market and the importance of being able to present a full range of mobile telecommunications systems’. (8) Therefore, any assessment of the compatibility of the amount of the fee levied by the Belgian authorities with Article 13 of the Authorisation Directive must be made by the national court, subject to guidance provided by the Court on the interpretation thereof.

27.      In interpreting a provision of EU law, it is necessary to consider not only its wording but also the context in which it occurs and the objects of the rules of which it is a part. (9) This means that Articles 12, 13 and 14 of the Authorisation Directive must be interpreted in the light of the matrix of EU legislative acts that are relevant to the liberalisation of the telecommunications sector, and in particular the Framework Directive. (10)

28.      In it was held in Vodafone España that Article 13 of the Authorisation Directive has direct effect so that individuals can rely upon it before the national courts. (11) However, it is established in the case-law of the Court that Member States cannot be prevented 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, provide that the different amounts imposed reflect the respective economic values of the uses made of the scarce resource at issue. (12)

2.      The key issues of the preliminary reference

29.      In summary, Belgacom, Mobistar and KPN Group Belgium object to paying the one-off fee imposed by the Belgian Government under the Law of 15 March 2010, when it is additional to both the one-off grant fee they paid when entering the market, and two annual fees, one of which is an annual fee for the use of frequencies, while the other is an annual charge for the administration of authorisations. They also contest the sum they are required to pay, particularly given that it is calculated by reference to the one-off grant fee they paid when they received their authorisation for entering the market (either by competitive procedure or at auction on the assignment of frequencies). Belgacom, Mobistar and KPN Group Belgium further query the compliance of the one-off fee with the procedures set by Article 14 of the Authorisation Directive.

30.      In my opinion the differences between the parties concern the following five issues:

(i)      the rights of Member States to impose a one-off fee with the aim of securing optimal use of radio frequencies when it is additional to two annual fees: one charge covering the cost of the administration of the authorisation and the other a fee covering the cost of making the frequencies available, the latter fee already being justified by the Belgian Government by reference to the need to secure optimal use of radio frequencies. In other words, can more than one fee be charged to achieve the end pursued by Article 13? (Questions 1 and 2);

(ii)      whether the fees levied by the Member States can consist of charges that do not optically correspond to the concepts contained in the Authorisation Directive (hybrid fees traversing Articles 12 and 13 of the Authorisation Directive) (Questions 1 and 2);

(iii) the scope of the judicial review necessary to verify whether the system of fees imposed by a Member State has been applied to telecommunications operators in conformity with the conditions imposed by the Authorisation Directive (Questions 1 and 2);

(iv)      the discretion in the hands of the Member States to determine the value of the radio frequencies and to calculate the amount of the one-off fee payable (Questions 1 and 2);

(v)      the link between restriction of rights and the modification of existing rights, including the alleged retroactive implementation of the Authorisation Directive (Questions 3 and 4).

B –    The answer to Questions 1 and 2

1.      Admissibility of Question 2 and other preliminary issues

31.      The Cypriot Government has argued that Question 2 is inadmissible, because an answer to this question is not objectively necessary to resolve the litigation to hand. (13) The concerns of that government relate to the fact that this question addresses the fees payable when new rights are issued, when the facts appearing in the order for reference suggest the dispute concerns existing rights of operators who would like to renew them, and not grants of new rights.

32.      As was pointed out by the Commission at the hearing, there are two issues in play in the present case. The first concerns the renewal of authorisations that Belgacom, Mobistar, and KPN Group had already acquired for the 900 MHz and 1800 MHz bands. But, all the three operators are equally candidates for the conferral of new authorisations for the provision of fourth generation services, in the bands of 2.6 GHz (2 600 Mhz). This issue is addressed in Question 2 and is neither hypothetical nor irrelevant for the national litigation.

33.      Moreover, the present case concerns judicial review of the validity of national legislation. In this type of constitutional litigation, the link required between the parties to the dispute and the legislation they are challenging before the Cour constitutionnelle is a matter for Member State law. As far as EU law is concerned, it is merely necessary for a provision of EU law to be relevant to the legality of the national provisions that are being questioned before the Member State court. The Authorisation Directive clearly has this relevance. Question 2 is therefore admissible and the Court must answer it.

34.      However, the questions referred by the Cour constitutionnelle are exclusively concerned with rights of use arising from the issue of individual licences rather than general authorisations. Article 3 of the Authorisation Directive concerns general authorisations. This means that, in my opinion, that provision, despite being referred to in the preliminary questions, is not pertinent to the resolution of the present preliminary reference.

35.      Further, I also note that the Belgian Government has based its defence of the one-off fee on Articles 13 and 14 of the Authorisation Directive. The operators challenging the one-off fee have not sought to claim that the one-off fee amounts to a free-standing breach of Article 12, and the limits the provision imposes on the levying of administrative charges. Article 12 is therefore only pertinent in so far as it brings context to the challenge concerning Article 13.

2.      Approach

36.      In my opinion Questions 1 and 2 need to be considered together, because they differ in only two respects, and otherwise share common elements. The first difference lies in the fact that Question 1 is concerned with the compatibility with the Authorisation Directive of the one-off fee in the context of renewal of authorisations for existing frequencies, while Question 2 is concerned with the same matter in the context of the issue of fresh authorisations.

37.      The second difference arises from Question 1 being concerned with determining whether Article 13 allows the sum to be paid under the ‘one-off fee’ to be calculated by reference to the original ‘one-off grant fee’ paid to the Belgian Government in the 1990s, while Question 2 concerns the same issue with respect to calculation of the fee by reference to sums determined at auction on the assignment of frequencies.

38.       Both questions, however, concern the levying of more than one fee under Article 13, hybrid fees traversing Articles 12 and 13 of the Authorisation Directive, the scope of the judicial review necessary to ensure that the conditions imposed by the Authorisation Directive have been complied with, and the amount that has been charged.

3.      The position with regard to renewals.

39.      I can say at the outset, however, that the provisions of the Authorisation Directive cannot be interpreted as precluding Member States from imposing optimal use fees referred to in Article 13 of the Authorisation Directive in the case of renewal of existing rights. As was pointed out in the written observations of the Commission, this is partly because any fee can only be imposed for the duration of an existing right, and partly because Member States are entitled to take into account any increase in value of the frequencies occurring during the renewal period.

40.      As was pointed out in the written observations of the Lithuanian Government, by its very nature a renewal of an authorisation must be considered as an attribution of new rights for a new period. Individual usage rights are afforded by Member States for a limited period. When that period ends, national authorities are bound to reconsider if appropriate and efficient use is being made of these scarce resources.

4.      The levy of multiple fees under Article 13

41.      The operators have argued that Article 13 of the Authorisation Directive precludes the Member States from charging more than one fee for securing the optimal use of scarce resources. For example, it was alleged by KPN Group Belgium at the hearing that, while Articles 12 and 13 enumerate the fees which Member States are entitled to impose, and limit them to two, the Belgian Government is imposing three. It was further argued that this was inconsistent with the ruling of the Court of Justice in Albacom and Infostrada, (14) in which the Court held that it was the intention of the EU legislature to strictly limit the types of fees that can be levied. Moreover, Mobistar noted that the Court held in Telefónica Móviles España (15) that while usage fees could be increased significantly, this must always take place in conformity with Article 13.

42.      However, as was pointed out in the written observations of the Netherlands Government, Articles 12 and 13 of the Authorisation Directive refer to fees and charges in the plural in both the English and Dutch language versions, and to this I would add several others. (16) While this textual argument alone is not decisive, as wording can be a matter of legislative drafting style, it should be noted that recital 32 of the Authorisation Directive makes specific reference to fees consisting entirely or partly of a one-off amount in the case of competitive or comparative selection procedures.

43.      Hence, the Authorisation Directive envisages that more than one fee can be levied with a view to securing the goal envisaged by Article 13, namely that of securing optimal use of a scarce resource. The only further restriction imposed by Article 13 is that such fees are transparent, proportionate in relation to their intended purpose, objectively justified and non-discriminatory. The legitimate objectives that can be pursued by the Authorisation Directive are found in Article 8 of the Framework Directive, and include the promotion of competition and the efficient use of radio frequencies. (17)

44.      Moreover, as was pointed out in the written observations of the Belgian Government, the Albacom and Infostrada judgment did not concern a fee levied in order to ensure optimal use of resources but the prohibition on Member States from imposing financial charges other than those allowed by Directive 97/13. (18) The one-off fee in issue in the present case bears no resemblance to the tax on turnover to contribute to the investment of the Italian State in the liberalisation of the telecommunications sector in issue in Albacom and Infostrada which was held to be outside of the range of charges permitted by Directive 97/13.

45.      As to Telefónica Móviles España, there the Court expressly found that Member States are entitled to impose ‘different amounts’ for different technologies, provided they reflected the respective economic values of the uses made of the scarce resources in issue. (19) Limiting Member States to imposing only one fee per operator to pursue the goals set by Article 13 of the Authorisation Directive would be inconsistent with these findings.

5.      Hybrid fees and judicial review

46.      As the representative of the Belgian Government observed at the hearing, it is important to bear in mind that no challenge has been made in the main proceedings to the compatibility with Article 13 of the Authorisation Directive of the annual fee for making frequencies available that has long been imposed on Belgacom, Mobistar, and KPN Group Belgium. Rather, what is in issue is the compatibility of the new one-off fee imposed by the Law of 15 March 2010.

47.      Nevertheless, it is alleged that the combination of a one-off fee to secure Article 13 optimal use of resources, and an annual fee aimed at securing both this and Article 12 administrative costs (which the Belgian Government acknowledges to be the case for the annual fee for making the frequencies available) renders it impossible to determine if the sums levied are objectively justified, proportionate, and non-discriminatory.

48.      However, the Court has already held in Móviles España that Member States are not bound to allocate a specific use for the income derived from the fees levied under Article 11(2) of Directive 97/13 (and therefore Article 13 of the Authorisation Directive). Member States can ‘freely use that income’. (20) This holds true even if it results in a significant increase in charges for a particular technology. According to recital 32 of the Authorisation Directive, usage fees may for instance be used to finance the activities of the national regulatory authorities that cannot be covered by administrative charges. Therefore, fees levied under Article 13 of the Authorisation Directive may also be employed for administrative costs.

49.      Having said that, it is obvious for reasons of legal certainty that the administrative charges levied under Article 12 of the Authorisation Directive must be identifiable and quantifiable so that the objectives mentioned in Article 12(1)(b) of the Authorisation Directive can be achieved.

50.      Therefore, the Member State must always be able to identify the amounts it levies as administrative charges and the amounts it levies as fees for the use of scarce resources, and the telecommunications operator must be able to challenge the legal base and the amount of the charges before a court. Nevertheless, the billing techniques applied by the Member State are not a matter of EU law.

51.      It is for the national court to determine whether the information made available by the Member States concerning the destination of fees levied is sufficient to ensure adequate judicial control of the conditions imposed by Articles 12 and 13 of the Authorisation Directive. This requirement is fundamental to the principle of effective judicial protection and judicial review in the EU legal order. (21)

6.      The sums charged and the methods employed for determining them

52.      Important guidance on this issue also is found in Telefónica Moviles España. There the Court held that ‘the purpose of ensuring that operators make optimal use of scare resources to which they have access means that the charge must be set at an appropriate level to reflect inter alia the value of the use of those resources, which requires account to be taken of the economic and technical situation of the market concerned’. (22)

53.      While there is a legal limit on the levy of administrative charges referred to in Article 12 of the Authorisation Directive to the cost of the administrative work involved in granting the licence, a cap of a similar kind does not appear in Article 13 of the directive. As was pointed out in the written observations of Lithuania, Article 13 is textually limited only by the factors that appear in the provision itself. (23)

54.       With regard to the calculation of renewal fees by reference to the original one-off grant fee, it has been argued by the Belgian Government that the latter was based on the profitability of the frequencies concerned, with due account taken of the variations in profitability of each frequency. If the national court were to accept these arguments, then the link between the fees imposed and the value of the frequencies must necessarily exist. (24)

55.      Contrary to arguments made by the operators, the fact that the original one-off grant fee was a fee to enter the market, and of the kind that has been prohibited under EU law since the entry into force of Directive 97/13, does not affect this conclusion. The removal of the entry fee from the range of fees Member States are entitled to levy in no way precludes the pertinence of this fee to assessing the value of the resource.

56.      With regard to the fixing of Article 13 fees for fresh grants by reference to the sums determined at auction, as has been argued by the Belgian and Netherlands Governments, this is a method par excellence of determining the value of the frequencies, not least because it amounts to a direct reflection of their market value.

57.      With regard to the non-reimbursable nature of the one-off fee, there is a logical connection between this and the need to secure optimal use of resources. As has been pointed out by the Belgian and Netherlands Governments, along with the Commission, access to the frequencies to supply mobile telecommunications services is opened to only a limited number of operators. If these operators are provided with no incentive to use the frequencies allocated to them, a risk then arises of partitioning of markets, with operators effectively blocking the entry of competitors through failing to make use of the frequencies attributed to them.

58.      I therefore propose answering Questions 1 and 2 to the effect that Articles 12 and 13 do not preclude the imposition by a Member State of a one-off fee at both the time of issue and renewal of rights of use of telecommunications frequencies, and whether calculated by reference to sums paid in a competitive procedure at market entry, or at auction on the assignment of frequencies, and even though an annual fee is charged partly for the same purpose as the one-off fee.

C –    The answer to Questions 3 and 4

59.      I will also answer these questions together. I will do so because they both concern the limitations to changes on existing rights imposed by Article 14 of the Authorisation Directive.

1.      The version of Article 14 applicable ratione temporis

60.      Questions 3 and 4 seek to find out if the one-off fee is compatible with Article 14 of the Authorisation Directive, given that Article 14 places limits on the amendment, restriction, and withdrawal of rights to use radio frequencies. Belgacom, Mobistar, and KPN Group Belgium have queried the compliance of the Belgian legislation with these provisions

61.      As has been pointed out by the Commission, before this question can be answered, it is important to be mindful of the version of Article 14 that was applicable at the time the dispute chrystallised, and on which individuals are able to rely before the national courts. I would fix this date at 25 March 2010, the date of entry into force of the Law of 15 March 2010. Article 14 of the Authorisation Directive was amended by a text dated 25 November 2009 but the amended version did not become applicable until 26 May 2011. (25)

62.      Therefore, the version of Article 14 in force ratione temporis was the version that pre-dated Directive 2009/140, and this version makes no reference to rights to use radio frequencies, either with respect to Article 14(1) grant of rights (Question 4) or Article 14(2) renewal of rights (Question 3).

63.      While the Commission is ‘technically’ right on the version of Article 14 in force ratione temporis I recall that the national legislation in question provides for the levying of fees after 26 May 2011. The Cour consitutionnelle will be giving judgment in circumstances in which the new wording of Article 14 of the Authorisation Directive will be fully effective. Therefore, in order to give a useful answer to Questions 3 and 4, the Court, in my opinion, should also take into account the wording of Article 14 of the Authorisation Directive as applicable as of 26 May 2011.

2.       Justification under Articles 14(1) and (2)

64.      Having said that, the answer to Questions 3 and 4 is straightforward. There has been a dispute between the Commission and the Belgian Government, on the one hand, and Belgacom, Mobistar and KPN Group Belgium, on the other, on whether the one-off fee amounts to an amendment, restriction, or withdrawal of rights for the purposes of Article 14 of the Authorisation Directive.

65.      In my opinion this discussion is academic. Firstly, pursuant to Article 14(1) of the Authorisation Directive Member States are entitled to amend rights of use in objectively justified cases and in a proportionate manner, taking into consideration, where appropriate, the specific conditions applicable to transferable rights of use of radio frequencies. In my opinion, these conditions are satisfied once it is determined that the one-off fee has been imposed to ensure optimal use of scarce resources.

66.      Article 14(2) of the Authorisation Directive provides similarly that Member States are not entitled to restrict or withdraw rights except where justified and where applicable in conformity with the Annex and the relevant national provisions regarding compensation for withdrawal of rights. The same justification arises once Article 13 of the directive has been complied with. Whether there are applicable national provisions regarding compensation for withdrawal of rights, as provided for in Article 14(2), is manifestly a matter for the national court.

3.      Fundamental rights issues

67.      The operators have all flagged concerns of compliance of the one-off fee with various fundamental rights that are protected under EU law and the European Convention on Human Rights. These arguments have been concerned with the prohibition on retroactive effect of laws and the protection of legitimate expectations, and protection of the right to property. (26)

68.      Belgacom and Mobistar have argued that, given that tacit renewal of second generation rights were acquired on 8 April 2008 for a period of five years (to commence on 8 April 2010) for Belgacom, and 27 November 2008 for a period of five years (to commence on 27 November 2010) for Mobistar, the Law of 15 March 2010 is retroactive. They have raised this argument even though the active period of the renewal began on 8 April 2010 for Belgacom, and for Mobistar on 27 November 2010; that is, at times post-dating the entry into force of the Law of 15 March 2010.

69.      In my view the Law of 15 March 2010, which the Belgian Government argues to be in compliance with Article 13 of the Authorisation Directive, cannot be considered to be a retroactive measure, because it applies to rights over telecommunications frequencies that have not yet entered into force and provides a let-out option for those operators whose rights have already been tacitly renewed but who do not wish to pay the fee. (27) Moreover, as was pointed out by the Belgian Government at the hearing, it has been written into the contract of all three operators that regulations concerning usage rights can always be changed. In my opinion this precludes any argument based on legitimate expectations. (28)

70.      With regard to the alleged breach of the right to property, which was emphasised, in particular, in the written observations of Mobistar and Belgacom, levying new charges in the context of renewing time limited usage rights over radio frequencies cannot amount to breach of peaceful enjoyment of ‘possessions’ for the purposes of Article 1 of Protocol No 1 of the ECHR, or indeed Article 17 of the EU Charter, especially as the contractual arrangements relating to such usage rights seem to expressly avail opportunity for their recall. (29) This argument therefore falls at the first hurdle.

71.      I therefore propose answering Questions 3 and 4 to the effect that Article 14(2) of the Authorisation Directive permits the Member States to charge mobile phone operators the fees at issue in respect of the acquisition or renewal of their individual rights to use mobile phone radio frequencies.

V –  Conclusion

72.      For the reasons presented above I propose that the Court should give the following answers to the questions referred by the Cour constitutionnelle:

(1)      Article 13 of Directive 2002/20/EC of the European Parliament and of the Council of 7 March 2002 on the authorisation of electronic communications networks and services permits Member States to charge operators holding individual rights to use mobile phone frequencies for a period of 15 years, in the context of authorisations to install and operate on their territory mobile phone networks issued under the scheme instituted under the former legal framework, a one-off fee for the renewal of their individual rights to use frequencies the amount of which, relating to the number of frequencies and months to which the rights of use relate, is calculated on the basis of the former one-off grant fee that was associated with the issue of the aforementioned authorisations, when that one-off fee is additional to both an annual charge for making frequencies available and a charge covering the cost of managing the authorisation.

(2)      Article 13 of Directive 2002/20 permits the Member States to charge operators hoping to acquire new rights to use mobile phone frequencies a one-off fee the amount of which is determined at auction on the assignment of frequencies, in order to reflect the value of frequencies, when that one-off fee is additional to both an annual charge for making frequencies available and an annual charge for the management of authorisations to install and operate mobile phone networks issued under the scheme instituted under the former legal framework.

(3)      Article 14(2) of Directive 2002/20 permits the Member States to charge mobile phone operators, in respect of the renewal of their individual rights to use mobile phone radio frequencies, to which certain of them were already entitled, before the beginning of the renewal period, a one-off fee relating to the renewal of the rights to use frequencies they enjoyed before the renewal period, intended to encourage optimal use of the frequencies by way of reflecting their value, when that one-off fee is additional to both an annual charge for making frequencies available and an annual charge for the management of authorisations to install and operate mobile phone networks issued under the scheme instituted under the former legal framework.

(4)      Article 14(1) of the Directive 2002/20 permits the Member States to add, as a condition of acquiring and renewing rights to use frequencies, a one-off fee that is determined at auction, without limit, when that one-off fee is additional to both an annual charge for making frequencies available (intended first and foremost to cover the costs of making frequencies available while at the same time also partially reflecting the value of frequencies, the purpose of the one-off fee and the annual charge being to encourage optimal use of the frequencies) and an annual charge for the management of authorisations to install and operate mobile phone networks issued under the scheme instituted under the former legal framework.

1 – Original language: English.

2 – OJ 2002 L 108, p. 21.

3 – 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 services (OJ 1997 L 117, p. 15). Directive 97/13 was repealed by Article 26 of Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (OJ 2002 L 108, p. 33) (the ‘Framework Directive’).

4 – Joined Cases C-292/01 and C-293/01 Albacom and Infostrada [2003] ECR I-9449, paragraphs 40 to 41; Case C-339/04 Nuova società di telecomunicazioni [2006] ECR I-6917, paragraph 35; Case C-85/10 Telefónica Móviles España [2011] ECR I-0000, paragraph 21; Case C-284/10 Telefónica de España [2011] ECR I-0000, paragraph 19.

5 – Joined Cases C-55/11, C-57/11 and C-58/11 [2012] ECR I-0000, paragraph 28.

6 – Article 3 of Directive 2009/140/EC of the European Parliament and of the Council of 25 November 2009 amending Directives 2002/21/EC on a common regulatory framework for electronic communications networks and services, 2002/19/EC on access to, and interconnection of, electronic communications networks and associated facilities, and 2002/20/EC on the authorisation of electronic communications networks and services, OJ 2009 L 337, p. 37, amended Article 14 as follows: ‘1. Member States shall ensure that the rights, conditions and procedures concerning general authorisations and rights of use or rights to install facilities may only be amended in objectively justified cases and in a proportionate manner, taking into consideration, where appropriate, the specific conditions applicable to transferable rights of use for radio frequencies. Except where proposed amendments are minor and have been agreed with the holder of the rights or general authorisation, notice shall be given in an appropriate manner of the intention to make such amendments and interested parties, including users and consumers, shall be allowed a sufficient period of time to express their views on the proposed amendments, which shall be no less than four weeks except in exceptional circumstances. 2. Member States shall not restrict or withdraw rights to install facilities or rights of use for radio frequencies before expiry of the period for which they were granted except where justified and where applicable in conformity with the Annex and relevant national provisions regarding compensation for withdrawal of rights.’

7 – Case C-462/99 Connect Austria [2003] ECR I-5197 paragraph 92.

8 – Connect Austria, paragraph 93.

9 – Joined Cases C-544/03 and C-545/03 Mobistar [2005] ECR I-7723, paragraph 39.

10 – For a summary of the history of telecommunications liberalisation in the European Union to 27 October 2005, with reference to the key legislative measures, see the Opinion of Advocate General Ruiz-Jarabo Colomer in Nuova società di telecomunicazioni, paragraphs 3 to 6.

11 – Cited above, paragraph 39.

12 – Telefónica Moviles España, paragraph 35.

13 – They cite, in support of this principle Case C-343/90 Dias [1992] ECR I-4673, paragraphs 22 and 23; Case C-297/93 Grau-Hupka [1994] ECR I-5535, paragraph 18; Case C-36/99 Idéal tourisme [2000] ECR I-6049, paragraph 20; Case C-318/00 Bacardi-Martini and Cellier des Dauphins [2003] ECR I-905, paragraph 41.

14 – Cited above.

15 – Cited above.

16 – The same occurs in the Danish, Finnish, French, German, Italian, Polish, Spanish and Swedish, language versions.

17 – See also recital 32 of the Authorisation Directive, where it is stated that ‘usage fees … should not hinder the development of innovative services and competition in the market’. The meaning of this is elaborated at paragraphs 30 and 31 of Telefónica Móviles España.

18 – Albacom and Infostrada, paragraph 42.

19 – Telefónica Móviles España, paragraph 35.

20 – Telefónica Móviles España, paragraph 32.

21 – See for example Case C-120/97 Upjohn [1999] ECR I-223, paragraph 36, and Opinion 1/09 [2011] ECR I-0000, at point 85.

22 – Cited above, paragraph 28.

23 – To this can be added recital 32 of the Authorisation Directive, which provides that the fees must not impede the development of innovative services or competition on the market, and Article 8(2) of the Framework Directive.

24 – I would note that last year, in Telefónica de España, cited above, the Court held at paragraph 32 that ‘Directive 97/13 does not preclude Member States from determining the amount of a fee under Article 6 of that directive on the basis of the gross operating income of the chargeable persons’.

25 – See Article 5 of Directive 2009/140, cited above.

26 – The observations of Belgacom have queried Belgium’s compliance with Article 6(1) ECHR and Article 47 of the Charter of Fundamental Rights of the European Union, in the context of retroactivity and circumvention of the authority of a judicial decision.

27 – In other words, as a matter of EU law, Article 13 is simply being applied immediately to future effects of a situation which arose under an old (national) rule. See e.g. Joined Cases C-395/08 and C-396/08 Bruno and Others [2010] ECR I-5119, paragraph 53 and case-law cited; Case C-162/00 Pokrzeptowicz-Meyer [2002] ECR I-1049, paragraph 50 and case-law cited.

28 – For an example of absence of factual material to support a legitimate expectation, in the context of immediate application of a new EU rule see Case C-315/96 Lopex Export [1998] ECR I-317, paragraphs 28 and 29.

29 – The judgments of the Court of Human Rights in Van Marle and Others v. the Netherlands, 26 June 1986, Series A no. 101, Pressos Compania Naviera S.A. and Others v. Belgium, 20 November 1995, Series A no. 332, and S.A. Dangeville v. France, 16 July 2002, ECHR 2002-III were relied on by Mobistar, but none of them address the key issue of whether the circumstances in which rights of use over telecommunications frequencies amount to ‘possessions’.

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