International Journal of Communications Law and Policy

Workshop "Internet Telephony" at Marburg (Germany), June 5 to 6, 1998

 

How European law determines the licensing proceedings of German telecommunication law in view of Internet telephony
by by Susanne Stöver

 

According to art. 4 of Directive 97/13/EC (European Parliament and the Council: 10/4/1997) Member States can introduce a general licensing procedure for all telecommunication services including Internet telephony, as soon as such services enable a connection from one telephone to another. [The possibility of using two computers for phoning over the internet and the software needed for this is not dealt with in this text.] In § 4 TKG, German law only provides for an obligation to report the offer of telecommunication services. A general licence does not exist in German law.

Art.7 of the Directive allows the member states to demand an individual licence for any offer of speech telephony. According to both German and European law, Internet telephony will soon fulfil the criteria demanded. According to §6 TKG of the German law, however, the offer of speech telephony is only subjected to an individual licence if the provider operates his own network. EC law renounces this additional criterion. So according to European law, an ISP (Internet Service Provider) who offers Internet telephony, without operating a network, can be subjected to an individual licence, as soon as his service fulfils the criteria of real-time speech. According to German law he need not get one if he does not run his own network.
The members of the seminar did not agree on how to define the network meant by §6 TKG, because every provider can be seen as a network in the sense of being a junction in the Internet. In contrast to the European definition, German law includes the means of transmission (Übertragungswege). That means the provider need not be the owner of transmission, but he has to have a certain control. As the ISP does not have any control over the Internet, the author of this text is of the opinion that the ISP does not supply a network of his own, as defined by German law. Therefore, the supplying of Internet telephony does not require an individual licence according to German law.
As European law allows such a procedure, however, German law could easily be changed. In the following discussion, the author considers whether it could be beneficial to demand an individual licence for Internet telephony.

Restriction of the free market by licensing procedures has to be justified by a legitimate reason for regulation. The licensing procedures take on a special importance because of conditions that may be connected with them, as a means of regulating the market. Therefore, a change in German law would not be justified as regards voice-over-Internet, if it is not beneficial to subject the offering of voice-over-Internet to special conditions.
This question is discussed using only universal service as an example.

As regards speech telephony, it is especially important that the conditions connected with the licences ensure that universal service is maintained. According to EC law, a financial contribution to the maintenance of universal service can be connected with a general licence: it is already possible to make a service provider pay for this service. However, only an individual licence holder can be connected with the obligation to supply the offer of speech telephony.

According to German law, only those who can be obliged to supply universal service can be committed to pay a contribution for that same service because of the principles regarding "special contributions" (Sonderabgabe) that have been laid down by the courts. We must consider whether an ISP can be obliged to offer universal service.

a) ISPs have no influence on the Internet, so they cannot guarantee the quality of their service. Even if voice-over-Internet fulfils the criteria of speech telephony, it still does not offer all the minimum demands defined by universal service.

b) ISPs offer a service, but that does not include infrastructure provision. In the context of universal service, Internet telephony could anyway only be useful for long distance connections. The minimum offer as defined by universal service does not include Internet telephony.

From these points, it follows that an ISP cannot be forced to offer a service within universal service. If ISPs are still subjected to a licensing procedure, it would be possible, however, to impose a financial contribution for this service according to §21 TKG, although that would be an infraction of the principles that the German courts established as regards special fees (Sonderabgabe). From this point of view it would not make sense to subject ISPs to a licensing procedure.

Seen from another point of view, the discussion during the seminar showed that it could actually be useful for ISPs to be single licence holders: only then could they demand Open Network Provision from other network suppliers. Future developments are expected to reveal new aspects of this subject.