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2. In order to achieve the complete liberali- sation of telecommunications, the Directive establishes a common infrastructure — to which the legal codes of the Member States must be adjusted — for the granting of general authorisations and individual licences in the sphere of the services which make up that market, on the basis of the principles of proportionality, transparency and non-discrimination. In short, it is a question of fine tuning, in the telecom- munications sector, two of the essential 1 — Original language: Spanish. tools for constructing a single market: 2 — Since the judgment in Joined Cases C-69/96 to C-79/96 Garofalo and Others 11997] ECR I-5603, the Court of freedom of establishment and freedom to Justice has had no doubt that the Italian Council of State, when it issues an opinion in relation to an extraordinary provide services. 4 petition brought before the President of the Republic, constitutes a court or tribunal within the meaning of Article 234 EC. 3 — OJ1997 L 117, p. 15. 4 — See recitals 1, 2, 4 and 11, and Article 3(2), of the Directive.

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3. Accordingly, the freedom to supply tele- 2. Tax provisions communications services and the liberali- sation of the operation of their networks are the guiding principles in the rules of the Directive. The Community legislature intends them to be distributed and used without hindrance or, where appropriate, 5. Articles 6 and 11 of the Directive follow in accordance with general authori- the same course of promoting competition sations, 5 reducing individual licences 6to in the telecommunications market and not the status of exceptions or additions to the imposing on undertakings more restrictions universal permits. 7 or charges than necessary, 9thereby com- plying with the principle of proportionality. They are headed, respectively, 'Fees and charges for general authorisation pro- cedures' and 'Fees and charges for individ- ual licences'.

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7. 'Article 11 Code; 'the Codice Postale') of 1973 10 established that telecommunications ser- vices belonged to the State, while allowing them to be indirectly managed by means of a franchise, the franchisee being required to pay an annual royalty. 11

1. Member States shall ensure that any fees imposed on undertakings as part of auth- orisation procedures seek only to cover the administration costs incurred in the issue, management, control and enforcement of the applicable individual licences. The fees for an individual licence shall be propor- 9. After the process of establishing full tionate to the work involved and be pub- competition in the telecommunications lished in an appropriate and sufficiently market had been initiated and implemented detailed manner, so as to be readily access- in the European Community, 1 2Presiden- ible. tial Decree-Law No 545 of 23 October 1996 13 approved the adoption of urgent provisions to adjust the national system to

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Community law and, in particular, to is governed by Article 6, paragraphs 5, 20 Directive 96/19/EC. The rules were and 21 of which contain provisions relating adopted, with amendments, by the Italian to the levying by the State of fees and legislature in Law No 650 of 23 December charges: 1996. 14

'5. The charge to be paid by undertakings 10. The new regulation abolished exclusive in respect of the general authorisation and special rights. It also acknowledged the procedure shall cover solely the adminis- right of every undertaking to provide tele- trative costs in connection with preliminary communications services and to install investigation, with monitoring the manage- telecommunications networks, subject to ment of the service, and of enforcing administrative authorisations, without compliance with the conditions laid down prejudice to the concessions provided for in the authorisation...' by law. 15 The requirement that activities in the telecommunications sector were to be subject to licences and authorisations was confirmed in Article 4 of Decree-Law No 249 of 31 July 1997 16 on the desig- nation of the supervisory authority and the establishment of rules in the telecommuni- cations and audiovisual sector). 17 '20. Without prejudice to the financial charges for the provision of universal ser- vice in accordance with Article 3, the charge imposed on undertakings for indi- vidual licences is intended solely to cover the administrative costs connected with preliminary investigation, monitoring the management of the service and enforcing 11. The announced adjustment of Italian compliance with the conditions laid down law to the requirements imposed by Com- in the licences...' munity law was made, in accordance with the abovementioned principles, by Presi- dential Decree No 318 of 19 September 1997. 18 The procedure for obtaining gen- eral authorisations and individual licences

12. The Minister for the Treasury, Budget and Economic Planning, in a Decree adopted on 5 February 1998, 19 pursuant to Article 6 of Presidential Decree No 318 13. Article 20(3) of Law No 448 of of 1997, ruled that the holder of an 23 December 1998 introducing public individual licence is required to pay to the finance measures for stabilisation and State: development (Budget Law 1999)24 con- firms that, from 1 January 1999, Article 188 of the Codice Postale shall not- be applicable to undertakings providing public services in the market in question. However, Article 20(2) establishes 'a (a) a contribution to the costs of issuing charge in respect of installing and supplying and granting the licence, to be paid at public telecommunications networks, sup- the time the application is made; 20 plying public telephony services and mobile and personal communications services', the amount of which is calculated as a per- centage 25 of turnover of all telecommuni- cations services provided in the previous year. (b) an annual fee for checks and monitor- ing; 21 22 — Article 5. 23 — Article 6. 24 — GURI N o 302, 29 December 1998, ordinary supplement, 19 — GURI N o 63, 17 March 1998, p. 27. p. 5. 20 — Article 3. 25 — 3 % for 1999, 2 . 7 % for 2000, 2. 5% for 2001, 2 % for 21 — Article 4. 2002 and 1.5% for 2003.

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14. The rules giving effect to those provi- 16. Article 2(1) states: sions were laid down by the Minister for the Treasury, Budget and Economic Plan- ning by Decree of 21 March 2000. 26

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a declaration that Article 20(2) of Law join the two cases, since they concern the N o 448 should not be applied to them or, same subject-matter. in the alternative, the referral to the Court of Justice of a question on the correct interpretation of the Community provi- sions.

22. Written observations have been sub- mitted, within the time-limit prescribed for that purpose by Article 20 of the EC Statute of the Court of Justice, by the Commission, 19. In the proceedings held to hear those the Italian Government, and the undertak- extraordinary petitions, the Minister who ings which are the applicants in the main adopted the contested Decree has asked the proceedings. Consiglio di Stato to issue an opinion.

20. Before expressing its opinion, the Con- 23. At the hearing held on 21 November siglio di Stato has decided to stay the 2002, the representatives of the parties proceedings and refer two identical ques- which have submitted written observations tions to the Court of Justice for a pre- presented oral argument. liminary ruling:

'Does Directive 97/13/EC permit Member States to require undertakings holding a IV — Assessment of the question referred licence or authorisation to carry on tele- for a preliminary ruling communications activities to make finan- cial payments, whatever they may be called, other than and in addition to those allowed by the Directive?'

28. Those tax regulations must be inter- preted in accordance with the aforemen- tioned objective: fiscal charges imposed on 26. It should be pointed out that the telecommunications undertakings as part purpose of the jurisdiction to give prelimi- of authorisation procedures must not dis- nary rulings conferred by Article 234 EC is courage them from entering the market, that the Court shall interpret or, if appro- and must therefore be based only on priate, give a ruling on the validity of the objective, non-discriminatory and transpar- provisions of European law which consti- ent criteria. 30 tute its material scope. The Court of Justice cannot give a ruling on national legal provisions or on their compatibility with Community law. It is for the courts of the Member States to carry out the latter task, once the doubts they have are clarified by the preliminary ruling. 29. However, although their content appears similar, Articles 6 and 11 have a different scope because they relate to different schemes.

B — The tax rules referred to by Articles 6 and 11 of the Directive 30. General authorisations are permits defined in a d v a n c e in a g e n e r a l

27. As the Commission rightly points out, 29 — See recitals 3 and 5 of the Directive. both provisions are superfluous to the 30 — See recital 12 of the Directive.

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manner, 31 which allow undertakings to provision requires that the fee for an operate in the telecommunications market individual licence shall be proportionate without the need for an explicit decision by to the work involved, a stipulation which is the competent body, but with possible not made in respect of the charge in the subsequent monitoring. 32 case of general authorisations.

32. Those differences account for the fact operating the 'applicable general authori- that, whereas Article 6 talks of '[covering] sation scheme', 36 whereas the charge for the administrative costs incurred in the issue, management control and enforce- ment of the applicable general authori- 35 — 'Tasas' or 'precios públicos'. Years ago there was a furious sation scheme', Article 11(1) refers to doctrinal debate amongst Spanish academic lawyers disbursements of the same kind in respect regarding the definition of those two concepts.

Instituto de Estudios Fiscales — Marcial Pons, Ediciones jurídicas, S.A_, Madrid, 1995. In the English, French and Italian versions of the Directive, 31 — They may be predetermined either by the administration the terms 'fees', 'taxes' and 'diritti' are used respectively. ('class licences ) or by the legislature itself (see recital 8 and 36 — Directive 2002/20/EC of the European Parliament and or the first indent of Article 2(1 )(a) of the Directive). the Council of 7 March 2002 on the authorisation of 32 — See Article 5 of the Directive. electronic communications networks and services (Auth- orisation Directive) (OJ 2002 L 108, n. 21), which has 33 — See the second indent of Article 2(1)(a) and Article 9 of the replaced Directive 97/13/EC, repealed by Directive Directive. 2002/21/EC of the European Parliament and of the 34 — Emphasis added. In Article 11(1) of the Spanish version of Council of the same date on a common regulatory the Directive, the expression 'régimen de licencias individ- framework for electronic communications networks and uales aplicable' is used, but the first noun does not appear services (Framework Directive)(OJ 2002 L 108, p.) in the texts in Italian, English and French. In the first of supports this interpretation when it states, in recital 3 1 , these, the wording is 'il rilascio, la gestione, il controllo e that '[w]ith a general authorisation system it will no longer l'esecuzione delle relative licenze individuali'. The English be possible to attribute administrative costs and hence version of the Directive says 'in the issue, management, charges to individual undertakings except for the granting control and enforcement of the applicable individual of rights to use numbers, radio frequencies and for rights to licences'. Finally, the French version includes the phrase install facilities'; that is to say, in the 1997 Directive they 'à la délivrance, à la gestion, au contrôle et a l'application were called individual licences and in the new one 'rights des licences individuelles applicable'. of use for radio frequencies and numbers' (Article 5).

1. The 'fee' for individual licences

39. The principles of objectivity, non-dis- crimination and transparency govern the establishment of the charge, which must be published in a sufficiently detailed 36. The event giving rise to the licence fee manner. 38 is the completion of the procedure for granting the licence, or for the manage- ment, control or enforcement of the auth- 37 — 'National regulatory authority' in the terminology of the Directive (Article 2(1)(b)). orisation certificate. 38 — See recital 12 and Article 11(1) of the Directive.

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2. The 'tax' on using scarce resources development of innovative services and competition'. 40

44. I therefore come to the crux of the problem raised by the Consiglio di Stato. Does Article 11 preclude Member States from imposing on the holders of individual licences fiscal charges other than those 42. The nature of this contribution is, as I allowed by the Directive? have pointed out, very different from that of the 'fee' provided for in paragraph 1 of the provision, because it does not seek to 40 — The last sentence of Article 11(2) of the Directive. Recital recover the costs incurred by the Adminis- 32 of the 'Authorisation Directive' of 2002 leaves it to the Meinher States to determine the purposes for which the tration in granting and managing these amounts collected in respect of this tax are to he employed licences, but is designed to optimise the use ('charges for rights of use and rights to install facilities', in the words of the Directive). Consequently, they may for of scarce resources, '[by fostering] the instance he used to finance activities of national regulatory authorities that cannot he covered by administrative charges. It adds that, in the case o r competitive or comparative selection procedures, payment arrangements should ensure that such fees do not i n practice lead to 39 — See recital 13, Articles 7(1)(a) and 10(1) of the Directive, selection on the hasis of criteria unrelated to the objective and points 4.1 and 4.2 of the Annex. of ensuring optimal use of radio frequencies.

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49. If it is not interpreted in that way, the 47. I have already indicated that the pur- effectiveness of the rule would be endan- pose of the harmonisation sought by the gered. If, as well as the contributions Directive is the complete liberalisation of authorised by Article 11 of the Directive, 43 the telecommunications market and the Member States were empowered to impose removal of obstacles to the entry of new other charges on holders of individual operators (favor libertatis principle). The licences in the telecommunications sector barriers it seeks to eliminate are not only merely because they held those licences and the official and obvious barriers, such as operated in the market, 44 they would be the general requirement to have permits and authorisations before operating in that market, but also the material barriers, 42 — On the other hand, Article 6 speaks of 'Fees and charges for general authorisation procedures' (emphasis added). 43 — Which, in Italian law, are found in Article 6(5), (20) and (21) of Presidential Decree No 318 of 1999, and in the 41 — 'Member States shall ensure that any fees imposed on Ministerial Decree of 5 February 1998. undertakings as part of authorisation procedures seek only 44 — Such as the contribution provided for in Article 20(3) of to cover the administrative costs incurred...' (emphasis the Budget Law for 1999, implemented in the Decree of added). 21 March 2000.

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51. Article 11 of the Directive is designed to harmonise the fees and charges which Member States may impose on the holders of individual licences in order to operate in 53. The interpretation which I suggest is the telecommunications sector. The basis corroborated by the 'Authorisation Direc- for that harmonisation is to be found in tive' of 2002, which has replaced Directive Article 2 EC, in that differences between 97/13/EC and which requires that the the tax laws of the Member States jeop- systems which regulate the administrative ardises the achievement of the objectives it charges and fees for the use of radio pursues. Tax harmonisation is not an aim frequencies and numbers should not distort of the European Union, but a tool for its competition or create barriers in the mar- ket, 46 which reflects the view that the holders of authorisations and licences 45 — Sec the case-law of the Court of Justice, cited by the ('rights of use' in the new terminology) Commission in its written observations, in relation to Directive 69/335/EEC of the Council of 17 July 1969 cannot be subject, as such, to charges other concerning indirect taxes on the raising of capital (OJ English special edition 1969 First Series II, p. 412). In than those laid down by Community legis- particular, the judgments in Joined Cases C-71/91 and lation. C-178/91 Ponente Carni and Cispadma Costruzioni [1993] ECR 1-1915, paragraphs 30 and 3 1 ; Case C-188/95 Fantask and Others 11997) ECR 1-6783, paragraphs 26 and 27; and Case C-56/98 Modelo / 11999] ECR I-6427, paragraphs 25 and 27. 46 — Recitals 31 and 32.