1. Introduction

Since its foundation in 1957, the European Economic Community (EEC) - known as the European Union (EU) since the 1992 Maastricht Treaty - has faced major crisis. Territorial enlargement and the defence of national interests have been the root causes of successive difficulties. Nevertheless, if one accepts the main objectives of the Treaty of Rome as establishing the EEC, enormous accomplishments must be recognised. In economic terms, an internal market with free movement of goods, people, services and capital has been developed; in political terms, the second half of the 20th century enjoyed the peace that those who lived in the first half could only have hoped for.

The EU covers an impressive range of policy-areas, from market/economic issues to environment, security, foreign policy, among many others. In addition to the wide range of political responsibilities, what makes the Union so distinguished from other international actors is the binding character of its legislation. The EU is one of the few international organisations1 whose decisions are binding upon its members and, whenever in conflict, whose legislation takes precedent over national legislation. Even considering the EU's difficulties in both promoting further integration and in implementing its policies on the ground, the uniqueness of the Union is notorious.

Since Portugal entered the Community, in 1986, it became the most relevant public international actor for this new member state. Once the EU legislation is binding upon its members and it does intervene in the communications policy area, we must consider the Union as a political entity and we must analyse its communications policy in order to understand the regional framework in which Portugal is bound to operate. We will start by briefly referring to other international organisations that have an impact, however light, in the development of Portuguese communications and respective policies. We will then briefly refer to the most relevant historical and political developments in the Community, paying particular attention to the decision-making process and to competing interest groups.

These more general sections will be followed by a sub-chapter specifically on EU communications policy. Although the Commission considers broadcasting as a telecommunications service, we analyse both sectors separately. They are obviously inter-related but for reasons of national politics, the EU did not have any alternative but to treat these two sectors in a quite different fashion. In fact, the impact of EC/EU policies has been much more relevant in the telecommunications sector than in the broadcasting one. This chapter will finish with a concluding analysis in which we will state that, although Portugal has to comply with EU policies, these policies are far from corresponding to the needs of this less favoured country.
 
 

2. The EU in Context: Other International Organisations in the Communications Arena

Although in this chapter we will concentrate mainly on the European Union as a transnational actor which impacts on Portuguese communications, we will now briefly present some international policy bodies that directly or indirectly influence the domestic level of decision-making. Although we cannot consider in detail the different strengths and weaknesses of each body and their very distinct goals and policies, we will take a pluralist approach in the sense that we will draw attention to a number of actors without fully exploring their weight and power in the international arena.

With regard to the international actors which have an impact on communications policy, McQuail refers to two categories:the 'non-technological' ones like the EU Commission (EUC), the Council of Europe (CoE), UNESCO, the European Broadcasting Union (EBU) etc., and the 'technological' ones such as the International Telecommunications Union (ITU), INTELSAT, EUTELSAT, the European Space Agency (ESA), among others (1986:27-33).

With the exception of the EU and, to a certain extent, the United Nations (UN), the other international organisations do not have the political/economic strength and legitimacy to impose their solutions on member states. Most general agreements generally function only to the extent that individual states ratify them and incorporate them into their own laws and regulations (Ibid.:28). In the international fora, however, quite commonly stronger states - with intense lobbying and well prepared delegations - manage to defend their particular interests by persuading ill-equipped delegations to approve their views and proposals. National governments with most at stake do their utmost to ensure that their vital interests are strongly defended in the policy formulation stages of international bodies' rulings. Albeit being true that nation-states still maintain a formidable force in the international arena, this power is unevenly distributed among them.

Among the 'non-technological' bodies, those most active and more likely to set the policy agenda are the EU Commission (EUC) (see below in detail), the CoE and the EBU. The EU is mainly active in economic matters while the CoE more in relation to cultural, social and legal affairs.

The CoE represents a wider Europe and operates in relation to cultural, social and legal matters. Its main goal has been the achievement of a greater unity between its members to safeguard and realise the ideals and principles which are their common heritage and facilitate their social progress. Freedom of expression and the notion that freedom carries responsibilities and duties has been traditionally a key issue for the CoE. In 1976, the Council of Ministers established the mass media policy committee to deal with media problems in Western societies. The CoE media policies are mainly framed within the 1948 European Convention of Human Rights.

The EBU is less relevant for policy-making, but it is involved in daily Eurovision news exchanges, carries out joint negotiations and provides production teams for the coverage of major international events. The EBU was set up in 1965 as a co-operative body of Western European broadcasting organisations and it has 40 members from 31 states.

In addition to the 'non-technological' bodies referred to in McQuails's work, there are other international organisations which, although not directly concerned with communications, have been important promoters of policy changes either in broadcasting or in telecommunications. The OECD 2, IMF, World Bank 3 and GATT 4 (now World Trade Organisation - WTO), for instance, have been arguing for more competition, liberalisation and often privatisation in the communications arena.

Amongst the most important 'technological' bodies are the International Telecommunications Union (ITU) - with its European branch CEPT -, ETSI, INTELSAT, EUTELSAT, INMARSAT, and the European Space Agency (ESA). The ITU is a United Nations agency established in 1865 which has 157 member countries and its main objective is to promote international co-operation in telecommunications. It allocates the frequencies of the radio spectrum and supports the development of new communication systems such as satellite services. CEPT (Conférence Europeéne des Administrations des Postes et des Télécommunications) is the European regional division of the ITU. By 1988, the EU had created the ETSI (European Telecommunications Standards Institute)5 and the most relevant standardisation activity, at European level, was transferred from CEPT to this institute. The CEPT was perceived as been dominated by the PTT's, so the creation of ETSI was an effective political move to side-step the CEPT.

INTELSAT, EUTELSAT and INMARSAT are all satellite consortiums. INTELSAT was set up in Washington in 1964 by the US and thirteen other countries (mainly Western European) and manages the international communication satellite system at a global level. INTELSAT has a monopoly in this field and, consequently, the establishment of new satellite organisations must have INTELSAT's approval. EUTELSAT was established in 1982 by the PTTs of 26 European countries to provide for satellite services in Europe. EUTELSAT allocates available transponders of the European communications satellites and has been the main body responsible for the increasing use of satellites for commercial television. INMARSAT co-ordinates maritime satellite communications.

The European Space Agency (ESA) was established in 1972 and it represents a co-operative effort of eleven Western European countries to build up an independent European capacity in the field of satellite and launchers. The Ariane launcher system, for example, is the result of these efforts.

It is difficult to assess, in general terms, the extent to which the international organisations we have referred to can shape communications policies in member states. But, as we have already said, most decisions of international bodies are not binding and international laws and regulations work only when individual states incorporate them into their national legislation. In addition, most international organisations are only policy co-ordinators and not initiators (the EU is once again an exception). International organisations co-ordinate national policies rather than make policies of their own and they tend to move within the already established parameters. For these reasons, although international organisations must be considered when analysing national communications policies, their power should not be over-estimated.
 
 

3. The EU History and Politics

3.1. Brief Historical Overview and the Neo-functionalist Integration Theory

Although ideas about European political and economic unity had been developed well before the 20th century, it was not until after the Second World War that concrete steps were taken to achieve some form of economic (and later social) integration 6. In the immediate aftermath of the war, the prospects for European integration did not seem very encouraging. The Soviet Union rejected any ideas of federation in either Western or Eastern Europe. Proposals for the former were regarded as a recipe for the creation of a bloc hostile to its own interests. The United States on the other hand was initially keen to preserve as much of the Allied wartime co-operation as possible and was committed to the development of the United Nations as a global peace-keeping organisation (Weigall and Stirk, 1992:38). Yet, there were strong political and economic factors which have brought about radical changes in both the climate of opinion and the perception of requirements.

The Second World War produced a greater than ever before realisation that uninhibited nationalism was a catalyst for war. So, there was a deep desire to replace Europe's system of rival nation-states with a new European organisation which could in practice secure peace. Economically, the war had left most European countries in an extremely difficult situation. The rapid post-war recovery in itself had created massive balance of payment deficits and major currency problems (Nugent, 1991:15-22). Although there was no agreement about the best way to proceed with some form of European integration, clearly there was a rationale to develop previous ideas about the creation of economic/political initiatives and organisations which would have the potential to co-ordinate efforts on a long term basis and to secure a lasting peace.

In spite of the divisions and conflicting views about the future of Europe, two Frenchmen were behind the impetus for the creation of the first of the European Communities, the European Coal and Steel Community (ECSC). Jean Monnet and Robert Schuman were strong advocates of European unity and were deeply convinced that European organisations already set up, such as the CoE and OEEC (later OECD) would not provide the required vision and strength if Europe was to be unified in a supra-national entity. The signature of the 1951 Treaty of Paris establishing the ECSC was the first milestone in the foundation of an European political entity. Under this treaty, the ECSC would establish a common market for coal and steel among member states (Belgium, The Netherlands, Italy, Luxembourg, West Germany and France) implying the abolition of all tariffs, quantitative restrictions, exchange controls, and double-pricing practices. According to Lintner and Mazey, although limited to a particular sector, the role of ECSC was thus federal in scope since implementation of the common market would entail harmonisation and co-ordination of national industrial policies (1991: 5).

The ECSC was the first step of what neo-functionalists would call the 'spillover effect'. According to the neo-functionalist theory, European integration, is not the result of original commitment to supra-nationalism but a consequence of the perception that individual interests would be best served by the extension of competence to supra-national institutions. As Hodges point out, the major neo-functionalist assumption is that initial attempts to integrate in relatively non-controversial economic issue-areas will eventually spill over into more and more controversial (and hence political) spheres of activity (1978:246). Indeed, initial developments in the European integration process gave some credence to neo-functionalists' views.

After the Treaty of Paris, Jean Monnet, President of the High Authority of the ECSC, used his influence to promote the resumption of the 'European dialogue'. He persuaded the foreign ministers of the Six to meet at Missina on the 1 June 1955. In this meeting the governments of the Six resolved that the moment had come 'to go a step further towards the construction of Europe. In their opinion this step must, first of all, be taken in the economic field' (quoted in Nicoll and Salmon, 1990:11). As a result of these concerted efforts, on the 25 March 1957 two major treaties were signed in Rome by the founders of the ECSC: one establishing the European Economic Community (EEC) and the other establishing the European Atomic Energy Community (EURATOM).

EURATOM's aims were to ensure a safe development and growth of the nuclear energy industry in order to fuel industrial development. The EEC general objectives were defined as follows in Article 2 of the Treaty of Rome: 'By establishing a Common Market and progressively approximating the economic policies of the Member States to promote throughout the Community a harmonious development of economic activities, a continuous and balanced expansion, an increase in stability, an accelerated raising of the standards of living and closer relations between the States belonging to it' (quoted in Lintner and Mazey, 1991:11). A common market was supposed to bring about completely free movement of goods and factors of production such as labour, capital and enterprise.

As Nugent points out, the Treaty of Paris and the two Treaties of Rome were the first to reveal real willingness to go beyond the essentially intergovernmental initiatives and organisations that were established in Western Europe in the late 1940's (1991:26). And until the early 1960's, the construction of Europe was going according to the ideas of its founders. In what turned out to be known as the Schuman declaration, he said: 'Europe will not be made all at once or according to a single, general plan. It will be built through concrete achievements, which create a de facto solidarity' (9 March 1950). The neo-functionalist regional integration theory developed by Lindberg (1963, 1963a) and Haas (1958, 1968) clearly reflect this vision of a 'step by step' process. Hence, EEC founders and neo-functionalists alike predicted that this dynamic integration process would inevitably lead to a complete political union. Early successes appeared to vindicate this approach, but serious difficulties in the integration process over the last three decades have created some doubts.

The first major crisis occurred in the 1960's when President De Gaulle, suspicious of the British intentions, opposed London's application for accession. The crisis of 1963 and 1967 were only overcame (albeit for a short period of time) on 1 January 1973 when the UK, Ireland and Denmark finally joined the Six. Hoffmann argued that the stagnation of European integration in the 1960's could be explained by the distinction between 'low politics', involving calculable and relatively insignificant welfare issues and 'high politics', involving major foreign policy and defence issues which no government is willing to entrust to an untried supranational institution (1966:882).

In fact, the oil shocks of 1973 and 1979 would once again test the views of EEC founders and neo-functionalists. The Economist magazine has pointed out that the oil shocks weakened the Community by unleashing national selfishness and allowing grand designs to be dusted off again (11 July 1992:5). Hodges would also argue that the failure of the member states to achieve integration in 'high politics' by means of spill over from economic integration is the result of the diversity of the national objectives, the differences in their national conditions, and the lack of any unifying and distinctively 'European' issues (as opposed to purely local and global ones) (1978:251). The 1970's were overall a decade of great strain to the Community. The financial crisis coupled with concerns about competitiveness and the relative lagging behind of Europe in relation to both US and Japan led to an increase in non-tariff barriers to trade. Additionally, the Community's resources proved inadequate to meet escalating expenditure, intensified by the needs of common policies. Integration was on stand-by and the internal market was far from being a reality.

Political initiatives were urgently required if Europe was to overcome the deadlock and, indeed, in the 1980's, European integration seemed to re-gain pace. A concrete commitment to the completion of an internal market by 1 January 1993 was made with the publication of the Commission's White Paper in June 1985. The White Paper was followed by the signature of the Single European Act (SEA) in 1986 which was of crucial importance because it provided the Community with mechanisms which would speed up the decision-making process. The Act amended the Treaty of Rome, allowing legislative measures to be adopted by a majority vote, replacing the previous requirements for a unanimous vote. The 1980's were also the decade of the Community's Southern enlargement. Greece joined in 1981 and the two Iberian states, Portugal and Spain, joined in 1986.

European integration was on the move and external events at the beginning of the 1990's reinforced the trend. The most dramatic of these events was the immense shift in world power, resulting from the break-up of the so-called 'soviet bloc' and the subsequent end of the Cold War. Optimist writers, like Cafruny and Rosenthal say that such major changes forced Europe to leave its 'stand-by' position: 'Not only did the Community shift gears to confront the challenges presented by these events and move into the forefront of the efforts to extend aid to the new democracies, it also had unexpectedly to confront the claims of the new European democracies to future membership' (1993:2). This 'euphoric' environment led Community leaders to launch two major projects, the European Monetary Union and a new 'political union', as laid out in the Maastricht Treaty, signed on 7 February 1992. Success on Maastricht also paved the way to the Union's further enlargement. On the 1st January 1995, Austria, Finland and Sweden joined the Union bringing the number of member states to 15. Eastern Europe will certainly follow though - due to economic problems - an early membership cannot be expected.

Some of these political developments of the late 1980's and early 1990's unleashed the re-emergence of elements of the theoretical body of neo-functionalism. Keohane and Hoffman, for instance, argue that the conditions for the relevance of neo-functionalism to European integration are stronger now than they have ever been since the 1960's. They present a reconstruction of neo-functionalism arguing that the appropriate initial focus of analysis of European integration should be at the intergovernmental level. Their hypothesis is that successful spillover requires prior programmatic agreement among governments, expressed in an intergovernmental bargain (1990:287). This aspect is particularly relevant if one takes into consideration the fact that quite often - and contrary to what core neo-functionalist ideas predicted - states and economic groups did not recognise any interest in the transference of power from the peripheries to the centre. Member states and national groups strongly opposed several community-wide programmes and proposals. Keohane and Hoffman's view suggests that if integration is to proceed, more sensitive negotiation processes are bound to take place at intergovernmental level.

However, the path towards a new stage in the process of creating an ever closer union among the peoples of Europe, as stated in the Maastricht Treaty (Article A) is as problematic as always. Since the signing of the Treaty, the Union has been hit by a series of crisis. Denmark's voters rejected Maastricht in a referendum (although later approved it on a second ballot); Britain and Italy were forced to leave the Union's mechanism for linking exchange rates, and the French electorate accepted Maastricht by the slimmest of majorities. All this came against the background of a deep economic recession in Europe.

In general terms, these tensions reflect the old disputes that were never resolved; an internal struggle that maintains its actuality, almost 40 years after the signing of the Treaty of Rome - the clash between those (like General De Gaulle) who want a Europe des Patries and those who press for total economic and political union - the federalists 7. As Smith (1992) points out, it is structurally different to talk about an 'European culture' or to mention the 'European family of cultures'. And this is the point where the debate still stands; is it better to promote national revival, although increasing the relations with other member states, or to uphold regional/global aspirations? As consensus is not likely to be achieved in either the short or medium term, buzzwords such as subsidiarity 8 - 'as little Brussels as possible, as much Brussels as necessary' - are used to try to harmonise what are fundamentally different views on the future of Europe.
 
 

3.2. Institutional Policy-making Framework

Existing literature on policy analysis tends to focus on the domestic level of decision-making and generally infers that the Community's policy process is comparable to national policy processes. Wallace, for instance says that 'Community policy-making more closely resembles the diversity of the American or [...] Germany policy processes than the more tightly knit processes found in unitary states such as the British or French' (1983:45-46)'; and sums up that 'Policy-making in the Community is as diffuse and multidimensional as in its domestic counterparts' (1983:77). Still, although the Community follows the tradition of Western nation-states9, in the sense that power is divided between legislature, judiciary and executive, in reality 'the balance of power between the European Community's institutions of government is different from that customarily found in Western democracies' (Collins, 1994:16). Furthermore, the EU's decision-making process is far more complex than in any other single country. Contrary to most Western states, the European Union is a relatively new organisation whose shape and objectives are still being developed. The 'construction' of the Union goes along with the increasing number of actors and networks. The more politically and economically relevant the Union becomes, the more interest - and consequently actors - it is likely to attract. In fact, in addition to the EU's formal institutions, there is an impressive array of informal groups trying to influence decision-making, on a scale only compared to the so-called lobbying capital, Washington D.C. In the Union, negotiations tend to be far more difficult and time consuming than in most countries. Decisions can easily take several years to be reached - wide consultation is needed to accommodate sub-national, national and regional interests - and the implementation of policies is difficult and often limited in scope.

As our objective is to give a glimpse of the complexity of the decision-making process, we will start by grasping the main characteristics of the EU central institutions. This will be followed by the analysis of the informal actors and lobbies which are committed to influence policy output. Although some generalisation appears inevitable, it should be realised that, as Nugent puts it, 'which processes and channels operate in particular cases, and what type of interactions occur therein, varies considerably from sector to sector, and can even do so from decision to decision' (1991:55).

The basic institutional framework of the EU's decision-making process was expressed in the 1957 Treaty of Rome. In general terms, the process would be as follows: the Commission of the EU (CEU) would propose, the European Parliament would advise, the Council of ministers would decide and the European Court of Justice would interpret whenever conflict occurred. Although changes to the functioning of these bodies have been introduced particularly with the Single European Act and the Maastricht Treaty, the main pattern of the institutional framework has not been structurally modified.

The Commission is the central institution of the EU and is often referred to as the Union's 'executive' and/or the Union's 'civil service' (see e.g. Lintner & Mazey, 1991; Nugent, 1991; Andersen & Eliassen, 1993). Truly, it does more than 'executing' given tasks and, for a civil service, it has remarkable political autonomy and initiative. As guardian of the Treaties, the Commission is expected to defend and promote the vision of an integrated Europe, against the background of national interests. The Commission performs an enormous variety of tasks and it cannot be properly compared with domestic political institutions.

The Commission has among its tasks the duty to initiate legislation which flows from the provisions of the treaty. Recently, the Commission has been asked with frequency by the Council, the Parliament and even by national governments to develop legislation in areas which probably it would not otherwise do. When the legislation is drafted, it is passed on to the Council and to the Parliament and, if approved, the Commission is also supposed to carry it through. It is its duty to ensure that members states comply with legislation and, if they do not, the Commission is responsible for taking members states to the European Court of Justice. In addition, the Commission can legislate in its own right within the powers given by the Article 90 of the Treaty in relation to competition policy and when authorised by the Council of Ministers. Finally, the Commission represents the Union and establishes most of the contacts with Third Countries and other international organisations.

In order to undertake its tasks, the Commission is led by the President (Jacques Santer, since 1994) who after intense consultation and lobbying chooses 17 commissioners (two from each of the five largest countries and one from each smaller country). The commissioners are appointed by national governments for a four year renewable period10, but once appointed they are legally obliged to put the Union's interests before those of their state. In practice, however, such an objective is neither achieved nor attempted. 'It would [...] be quite unrealistic to expect them, on assuming office, suddenly to detach themselves from previous loyalties and develop a concern solely for 'the wider European interest' - not least since a factor in their appointment is likely to have been an expectation that they would keep an eye on the national interest' (Nugent, 1991:62). The Commissioners are assisted by their own cabinets (often staffed on national/political grounds) that are not only involved in the sectors for which their commissioner is responsible but, like the Commissioner, in all areas of EC policy-making (Andersen & Eliassen, 1993:21). In addition, Commissioners are assisted by a permanent staff of 15000 people who are grouped into 23 Directorates General (DG), each being responsible for a policy-area11

The Council of Ministers is the key EU decision-making body. Its main function is to accept or reject proposals put to it by the Commission, taking into account the views of the European Parliament (EP) and the Economic and Social Committee (ECOSOC). Thus, it is up to the Council to take decisions which become EU law12. The importance of this nationally based body has not declined with the EU's development. Indeed, in Nugent's words (1991:100), to the Commission and the Parliament's frustration, the Council - which is made up of representatives of the member states governments - has greatly enhanced its position in the Community. Until 1987, the bulk of decisions required unanimity. But, in a major shift, with the Single Act simple majority voting was introduced even in important areas such as internal market legislation. The Maastricht Treaty would further strengthen the role of the Council in the areas of security, home affairs and defence.

Although the Council is often referred to as a single body, in practice it meets in different compositions. The Foreign Affairs Council, the Agriculture Council, and the Economic and Finance Council meet monthly. The Fisheries and Budget Councils meet three or four times a year, Councils such as Industry, Research, Steel, Transport, Energy, Education, Development, Environment, Culture, and Social Affairs meet two or three times a year, and those such as Consumer Affairs, Health, Telecommunications once or twice a year (Nicoll & Salmon, 1990:55-56). The national representatives in these councils are generally the ministers of each policy area. As ministers have their agendas fully booked with national issues, the bulk of the work within the Council is undertaken not by them, but by the Committee of Permanent Representatives (COREPER). COREPER comprises civil servants of ambassadorial rank who act as gatekeepers, examining Commission proposals and liaising between national officials, other COREPER officials and the Commission bureaucracy (Lintner & Mazey, 1991:14). Considering the importance of the Council in the EU decision-making process, it is poorly staffed with no more than 2000 people at the European level.

In addition to sectional meetings, in 1974 it was agreed to hold regular summit meetings of the heads of state and government to plan the long-term future of the Community and to discuss international developments affecting member states. What became known as the European Council or simply Summit was only given formal recognition by the Single European Act. The expansion of this body which articulates national interests was perceived by some as 'a device invoked by national governments to divert the Community along an intergovernmental as opposed to a supranational road' (Lintner & Mazey, 1991:15). Yet, as Lodge emphasises, the Council performs a contradictory role because it can either act as a 'brake' on EU integration or as an instigator of institutional reform and closer European union (1989: 26-57). The Council Presidency rotates every six month among the member states according to the alphabetical order of the names of the states as written in their own language.

Andersen & Eliassen argue that, up until 1987, the EC's decision-making could mainly be described as a Commission-Council relationship with the EP increasingly trying to become involved, and with the ECOSOC standing on the sidelines (1993:22). And, indeed, even if the Single European Act and the Maastricht reform have introduced important alterations giving more relevant powers to the Parliament, its weakness is still very real. The EP has pretensions to the Council's legislative role, but it has only recently acquired a more generalised - but still fairly limited - right of co-decision with the Council (Lodge, 1989:47).

The 567 members of the European Parliament (MEPs) are directly elected for a five-year period 13. The work of the Parliament is prepared in different expert committees each responsible for certain areas. Thus, when Parliament receives a proposition from the Commission, it channels this directly to the respective committee, without any preliminary parliament process (Andersen & Eliassen, 1993:27). On what concerns the Parliament, the most relevant change introduced by the Maastricht Treaty is the co-decision-making procedure. The main problem is however, as stressed by Andersen & Eliassen, that this 'compromise-procedure' is very complex and may result in very lengthy processes which are difficult to use (1993:25). Even if this relative empowerment of the Parliament fails to bring significant change, these measures act as a deterrent to those who argue that the EU's democratic deficit is growing.

Whilst the EP still has some important powers such as the possibility (although somehow theoretical) of dismissing the Commission, the same cannot be said in relation to the Economic and Social Committee (ECOSOC). ECOSOC is a consultative body made up of representatives of trade unions and professional bodies (189 members appointed by the Council). Its main task is to give its opinion on Commission proposals before they go to the Council of Ministers. However, its influence on the decision-making process is very limited. So, although it was designed to represent corporatist interests, it is not the most suitable forum for interest groups to exert pressure.

Other EU bodies such as the European Court of Justice (ECJ) and the European Investment Bank (EIB) are not directly involved in the policy making process, but they play a relevant role in the development and implementation of EU legislation. The ECJ is the arbitrator and interpreter of EU legislation, and its rulings are binding. In fact, it has been perceived as holding a very central position in the total EU system and it is quite clear that the Union's competence has been strengthened by ECJ judgements. The EIB is the financing institution of the EU for long-term projects. It was set up in 1958 under the Treaty of Rome in order to 'contribute, by having resources to the capital market and utilising its own resources, to the balance and steady development of the Common Market in the interests of the Community' (Article 30). The EIB has contributed to the development of EU's telecommunications policies in LFR's, once important loans have been given to develop the network infrastructure and to introduce advanced services.

To sum up the legislative process, it could be said that the Commission drafts a proposal generally of its own initiatives, although it is becoming increasingly frequent for the Council and/or the Parliament to ask the Commission to do it. The proposal is submitted to the Council which has to be advised by the EP and the ECOSOC. If changes are to be introduced, it is up to the Commission to amend the proposal that has to go, once again, to the Council. Even if the Council approves a given decision, the Parliament might ask for a second reading. In this case, the Commission has to go through the document again and the Council has then to decide on the amended text. If a decision is finally reached, it can either be directly binding (regulations) or indirectly (directives). In any case, if member states fail to implement them, the ECJ has the responsibility (theoretically at least) of ensuring that member states comply with EU legislation.
 
 

3.3. Lobbying and Interest Groups

The most significant change in the decision-making process in the last decade has taken place outside the realm of the institutional framework. Mainly since the signing of the Single Act, an impressive number of lobbies and organised interest groups have settled down in Brussels and have developed their know-how on the most efficient ways of defending the interests they represent. Even if lobbying 14 has been a well established practice since the very beginning of the EC (see e.g. Philip, 1983; Kirchner and Schwaiger, 1981; Buksti and Martens), the volume and professionalism of lobbies now based around the EU institutions establish a clear difference from the Community's early days. Direct lobbying of EU institutions has risen so dramatically that Andersen and Eliassen talk about the 'Europeification' and 'lobbyfication' of the decision-making process (1993:35).

In spite of the importance of this phenomenon, little systematic attention has been paid by academics, and so far no specific framework has been developed to analyse lobbying at EU level. The most common theoretical instruments are those used to analyse the relationship between interests and the state (corporatism and pluralism) whilst the EU has very distinct characteristics and different decision-making processes. In these basic models, pluralism is associated with competing groups and heavy bargaining, and corporatism is associated with collaboration and consensus between the state and interests. If none of these models fully explain the reality in modern States, they appear even less sophisticated to deal with the complexity of the EU's interest representation. As Sargent puts it, 'the Community exhibits a combination of weak corporatist structures and functions which tend to favour representatives of capital and weak pluralist and parliamentary arrangements' (1985:252). Jordan & Schubert also reject the utility of analysing distinctively both models. 'Empirically these practices [pluralism and corporatism] are not clear alternatives. Groups involved in relations with political authorities inevitably utilise both strategies' (1992:10). Truly, in the EU it is not possible to identify a general pattern of influence-exertion over the decision-making process. The locus of decision-making varies from sector to sector and often from decision to decision. Lobbying the EU is a highly diversified business requiring generally abounding reliable information and close/trustworthy relations with EU officials and with national politicians directly involved with the Union.

Although it has never been possible to fully determine the number of professional lobbyists, by 1970 more than 300 Euro-groups were identified (Philip, 1987:75). A decade later, the Economic and Social Committee (1980) estimated that over 700 Euro-groups were actually committed to exert influence on the decision-making process. From the mid-1980's on, and particularly due to the changes introduced by the Single Act, the lobbying activity expanded dramatically 15. Currently, attempts to count the total number of interest groups or lobbyists results, in general, in a figure of 3,000 to 10,000 16, depending on how lobbyists are defined (Andersen & Eliassen, 1993:39). According to the CEU own directory of European Community Trade and Professional Associations, within the total of Euro-groups, around 50% represent industrial and commercial employers' interests. About 25% are related to agriculture and food, and around 20% are connected with the service industries. However, only 5% of the Euro-groups represent trade union, consumer and environmental interests (quoted in Mazey & Richardson, 1993:7).

To name but a few, the most important Euro-groups include the Committee of Professional Agricultural Organisation (COPA), the Union of Industries of the EC (UNICE) and the European Trade Union Confederation (ETUC). There are also relatively well-organised and influential Euro-groups dealing with savings banks (GCECEE), textiles (COMITEXTIL), insurance (CEA) and a range of other interests which are consolidated in 'bureaux' (for example the European Environmental Bureau) (EEB), the European Bureaux of Consumers' Unions (BEUC), 'permanent conferences' (for example of Chambers of Commerce and Industry), small and medium-sized industrial enterprises; and the European Centre of Public Enterprises (CEEP) (Kirchner and Schwaiger, 1981 as quoted in Lodge, 1989:53). Within this highly complex network of interests, it is important to note that the Union is lobbied by EU and non-EU groups. Indeed some of the most powerful lobbies such as UNICE and the American Chamber of Commerce (AMCHAM) represent predominantly the interests of companies from non-EU member states.

Even if these lobbies' strategies alter considerably according to their own importance, the policy area they intend to pressurise and indeed their perception of the relevance of the decision in question, the Commission has traditionally been their main target. The fact that the Commission not only initiates but also follows proposals through their legislative cycle and is responsible for policy implementation makes it particularly attractive for interest groups. In addition, considering its responsibilities, the Commission is a relatively small body, so the low rank officials who usually draft the legislation need information and ideas to develop the work under often tight deadlines. This combined with the finding that the final proposal adopted by the Council usually contains as much as 80% of the drafter's original proposal (Hull, 1991:26) makes the Commission and in particular legislation drafters irresistible targets. Partly in contrast to the findings of national investigations, it is not top level contacts but medium and low level ones which are of the most importance in the EC (Andersen & Eliassen, 1993:30). Within the Commission, not only DG's but also the Cabinets of the Commissioners are perceived as being weighty points at which efforts should be targeted. As we have stated before, Commissioners and their cabinets are involved in all areas of decision-making. However, it has been argued that the Cabinets are particularly sensitive to lobbying which is related to national interests or more politically oriented on matters close to the political heart of the individual Commissioner (Andersen & Eliassen, 1993:30).

Lobbying directly the Council of Ministers or the European Council has proved if not impossible, very difficult. At this level, negotiations are often held behind closed doors and decisions reached through various trade-offs, the so-called 'package-deals'. Still, Councils can be efficiently lobbied indirectly before negotiations actually take place. When governments are considering their positions on a Commission proposal to be decided by the Council, both national and Euro-groups can actively lobby national officials and the appropriate minister representing the country in the negotiations.

The Parliament and the ECOSOC are predictably second-ranking targets for interests. The ECOSOC itself is the Union's main forum for interest representation, so one should not expect lobbies to make substantial investments in the body which was designed to represent them. The Parliament however has increasingly attracted the attention of interests. Lodge states that EP plenaries attract over 200 lobbyists covering all manner of issues and economic interests (1989:51). Yet, more recently the EP has been trying to diminish the so-called 'democratic deficit' of the EU and has been - to some extent - proving that it represents the European citizens interests by paying particular attention to groups representing social and environmental concerns.
 
 

4. The EU Communications Policy

In general terms, the EU's attempts to intervene in communications are twofold. First, the Commission - mainly DGIII (Industry) and DGXIII (Telecommunications)- has been using information and communications technology to foster political integration. Second, technology has been used as a panacea to bring Europe out of recession and to increase competitiveness with two regional blocs: the US and Japan. Particularly in the 1980's - when telecommunications and broadcasting policies were high in the political agenda - Europe faced a recession of record depth and duration.

Underlying the proposals for a Single European Market by 1992 (and consequently a common market for telecommunications and broadcasting products and services) there was a belief that domestic markets could not fully benefit from economies of scale in order to compete with the US and Japan. A wider market was urgently needed. In addition to economies of scale in the telecommunications industries, there has been a real concern with technological development. Broadband communications, in particular, are expected to provide European businesses an electronic infrastructure to increase their competitiveness. Since telecommunications is estimated to account for 2% of GDP within the EU with an estimated increase to 7% per annum by the year 2000 (Ungerer and Costello, 1988), a less fragmented market was perceived as being of paramount importance.

In the broadcasting scene there is a clear conflict within the Commission between a more cultural approach, led by DGX (Audio-visual Media) which tends to talk about Audio-visual policy, and an industrial approach, resulting from the combination of DGXIII, DGIII and DGIV (Competition). Due to national resistance to hand over broadcasting policy to the EU and due to DGX's relative weakness, so far the most relevant measures concerning broadcasting are also related to the creation and development of a single market for hardware and software television products. The American dominance has provided the rationale to enter this domain and the growth of television distribution systems in Europe justified a programming policy to counteract the US. According to the Commission (1984a), the annual demand for programming is expected to rise to 300,000 - 500,000 hours.

The case for an internal telecommunications and broadcasting market within the EU, although economically defensible, was and still is a sensitive political issue. Resistance against EU intervention in these areas has been traditionally strong, not just among national actors but from international organisations already involved in communications such as the CoE and the EBU, which traditionally represent the cultural interests of broadcasting against an essentially economic approach from the Union. Yet, the Union managed to progressively enter these policy areas basically justifying its intervention on economic grounds. But, if in the telecommunications sector, this argument went down well, the same did not happen with broadcasting and indeed the Commission needed the ruling of the European Court of Justice to spill over its action to this domain. As Hills and Papathanassopoulos pointed out, the ECJ has interpreted transfrontier broadcasting as a 'service' within the meaning of the EC Treaty, thereby bringing it within the scope of the Common Market. In light of this ruling, the argument that broadcasting is culture and not part of the economy has been defeated (1991:126).
 
 

4.1. Telecommunications Policy

The Commission's attempts to intervene in telecommunications go back to the immediate aftermath of the Treaty of Rome. According to Schneider and Werle, as early as 1957 the Commission took initiatives concerning the co-ordination and harmonisation of the postal sector eager to elicit power and consensus to intervene in the telecommunications field (1990:85-88) 17. At that time, a permanent secretariat was formed to co-ordinate the postal and telegraph policies of the six member states. But, even so, the first meeting of the EC's PTT ministers only took place in 1964, to discuss the harmonisation of postal tariffs. After the meeting, the Commission started considering the possibility of harmonising the telecommunications sector, but no interest was shown by PTTs and national governments (Ibid.). In fact, there was, by then, no political interest in the move and no economic rationale to develop a common telecommunications policy.
 

Only in the 1970's did the Commission start voicing with increasing frequency ideas concerning the development of an European telecommunications policy. However, this was a highly sensitive area: the Treaty of Rome did not specifically provide the EC with competencies in this particular field. In addition, the telecommunications networks were considered natural monopolies 18 , and manufacturers, PTTs, and national governments were satisfied with the status quo. All national actors felt they could lose out with legally binding supra-national legislation. National manufacturers were content with the protection of their home markets and the possibility of the opening up of the telecommunications procurement market was not appealing; the PTTs were very powerful organisations, so attempts to limit their competence were not well regarded; finally, governments were well aware of the close links between telecommunications and national sovereignty, defence and security.

Despite the political hostility, the Commission argued for common R&D, harmonisation of standards and closer co-operation between the PTTs, and even tried to pass directives concerning the awarding of public supply contracts on telecommunications. Throughout the 1970's, the Directorate of Industry (DGIII), and in particular Vicomte Davignon and Christopher Layton, attempted to enter competition with the PTTs through the establishment of its own computer-based information network, Euronet, and then linking policy in telecommunications networks to the more politically salient market of information-technology products (Hills and Papathanassopoulos, 1991:132). There was a broader political consensus on the need to intervene in the computer and microelectronics sectors because the technological gap between Europe and both the US and Japan was more evident. As the Community has traditionally been strong in the telecommunications sector, it came as no surprise that in the 1970's attempts to put telecommunications in the political agenda linked it up to information technology products. So, economic arguments could be used to justify intervention in another policy area.

Still, the Council failed to adopt any relevant proposals on telecommunications and no comprehensive policy was developed. In fact, the hostility of PTT's and governments was so strong that significant policy activities did not evolve in that area until the early 1980's. Up until this decade, telecommunications in Europe were fragmented into autonomous national systems whose association through CEPT did little more than arrange for interfaces at national borders and rules for revenue sharing on cross-national traffic (Sandholtz, 1993:245). But a combination of inter-related circumstances and actors made it possible for the Commission to successfully enter into telecommunications.

With the liberalisation and deregulation processes in the US and Japan, companies started turning to the international markets. AT&T entered European markets through joint ventures with Philips and Olivetti, IBM diversified into telecommunications by purchasing stock in MCI. 'In the eyes of EC industrial policy makers, this was an alarming development' (Dang-Nguyen et. al., 1993:103). Faced with the difficulty of explaining the US and Japanese success in the information and communications technologies, the Commission attributed their growth to the enormity of their domestic markets and to the implementation of an industrial policy. Once, 'no national Community market represents more than 6% of the world telecommunications market (the total Community market share is 22.4%); whereas the US represents 35% and Japan accounts for 11%' (Ungerer, 1990: 33), the Commission felt there was a rationale to intervene. Economies of scale could hardly be achieved in the national European markets.

In addition to the 'overseas' threat, the deindustrialisation of Europe brought about new challenges. Old key industries such as shipbuilding, automobiles, and textiles were in decline and general desindustrialisation led to high levels of unemployment. The decline of the traditional industries was so complex that countries like France, UK and Germany felt they had to find new solutions that lay outside the realms of normal economic management. 'They are looking to new technology as the panacea. The developments in electronics are recognised as providing new markets of enormous potential. Cable TV, satellites, telecommunications equipment and computers are the major growth areas' (Locksley, 1983:129). Several EU studies 19 stressed the emergence of a so-called 'information society' in which information and communications technologies were supposed to have an enormous economic potential.

The Commission itself was determined to become an influential actor in this area. Failed experiences in the 1970's taught Commission officials how to deal more efficiently with the high number of actors involved in European telecommunications. In addition, the responsible directorate, Mr Davignon, pressed extremely hard for the development of a comprehensive strategy regarding the new technology growth sectors. In this regard, one of the most important actions was the setting up in 1979 of the Information Technology Task Force which reported directly to the Commissioners. The studies undertaken by this Task Force provided the Commission with the necessary knowledge to become a credible actor in the IT field (Sandholtz, 1993:255-256). The Commission foresaw that intervention in this area would foster not just economic but also political integration.

The Commission was far from being the only actor actively pushing for a common telecommunications policy. The European Court of Justice (ECJ), for instance, proved to be a crucial actor in the development of the EU's telecommunications policy. In 1982, the ECJ recognized with a fundamental Judgement 20 the application of competition rules to telecommunications organisations (the so-called BT case). The ECJ argued, based on article 86 of the Rome Treaty, that the telecommunications services market should be open to competition. The application of the competition clauses of the Treaty to PTTs gave a new momentum to the Commission's intervention in this policy area. And, indeed, the Commission clarified that it was prepared to use its powers to avoid anti-competitive behaviour and the abuse of dominant position by monopolies.

Within Europe, another set of actors was pushing for EU intervention in this area. If governments and PTTs were reluctant in handing over power to the Union, manufacturers and big users (big business, transnational companies, among others) were actively lobbying the Commission to enter telecommunications policy. Manufacturers argued that a community-scale market was needed in order to compete with the US and Japan. National markets for some telecoms products (e.g. public exchanges) were said to be too small to support competition. Big business was also pushing for liberalisation because there was a belief that, without better communications, European companies would be at a disadvantage. By the mid-1980s, American firms could benefit from more advanced telecoms facilities at lower prices than were available to their European counterparts (Sandholtz, 1993: 247).

To sum up, in the early and mid-1980's, the Union had the economic rationale to intervene: the US and Japan had already introduced changes in their markets and both had what appeared to be (at that time at least) a successful industrial policy. The most industrialised countries in Europe could no longer expect their old key industries to create jobs and to maintain economic growth. Telecommunications were considered critical for the Community's economic growth. 'In the Community by the year 2000, more than 60% of the employment will be strongly information-related - and will therefore depend on telecommunications' (Ungerer, 1990:89). The conditions were then in place for the development of a more comprehensive telecommunications policy but wider support was needed for the approval and implementation of EU law.

In general terms, it can be argued that since the early 1980's the EU telecommunications policy has been developed around two main fronts: firstly, it is part of an industrial policy in the information technology 21 domain to help European companies to regain some of the lost ground, and secondly, it follows the liberalisation and pro-competition bandwagon which started in the US. These two dimensions, although inter-related, reflect different and often contradictory views within the community, between interventionists pushing for a strong industrial policy, and free market believers, such as the Competition Directorate (DGIV), who saw the dirigiste approach as anti-competitive under the Treaty of Rome provisions.

R&D programmes such as ESPRIT 22 and RACE are the most visible face of the interventionist approach defended by the Task Force on Information Technology that was created in 1983 within DGIII (Internal Market) and merged three years later into DGXIII (Telecommunications, Information Industries and Innovation ). ESPRIT was launched in 1984 and its aim was to support pre-competitive research projects in the field of microelectronics, information processing systems and peripherals, computer integrated manufacturing, engineering, and basic research. In general terms, the Community provides matching funds to proposals submitted by transnational consortia of industrial enterprises, research laboratories and universities. According to the Commission, in 1990, some 6,000 researchers in more than 1,500 organisations worked full time in ESPRIT projects (Commission, 1991:136). The RACE programme is more focused on telecommunications itself. Its objective is to generate international R&D co-operation among manufacturers, PTOs, and research institutions within Europe and, by doing so, to stimulate innovation and competitiveness of the European industry. The latest completed phase of the RACE programme, running from June 1987 to June 1992, has backed cross-border R&D projects in advanced communications technologies with a financial contribution of 550 mECU (Schnöring, 1994:151; Council, 85/372/EEC).

Concerning the wider goal of liberalisation, Dang-Nguyen distinguishes two main phases. The first one (he calls it 'support seeking or awareness phase') extends from the creation of the Task Force (1983) up to the publication of the Telecommunications Green Paper (1987), during which the EC was still struggling for legitimacy. The second one starts after the Green Paper, when the EC began to implement the principles expressed in the Green Paper's policy guidelines (1993:104-105) .

Indeed, since the creation in 1983 of the Special Task Force, under the responsibility of Michael Carpentier, and the Senior Officials Group for Telecommunications (SOG-T), the EU worked hard to develop a coalition of supporters for its future action and to co-ordinate different initiatives within the Commission by DGXIII, DGIII, DGIV and DGXII. In this 'support seeking' phase, the Special Task Force argued, with the back-up of several studies, that co-ordinated action was urgently needed.

Hence, and despite the lack of movement in the opening of markets, in November 1984 the commission managed to gain agreement from the Council to its five-pronged policy proposal, designed to:

1. Create a Community market for telecommunications equipment and terminals via standardisation, mutual recognition of type approvals (where apparatus standards approved by one approved by all), and the opening of access to public contracts;

2. Improve the development of advanced telecommunications services and networks (ISDN);

3. Launch a development program for the technology required for future broadband networks, and implement infrastructure projects of common interest (RACE)

4. Promote the introduction and development of advanced services in the less favored regions of the Community (STAR); and

5. Co-ordinate negotiating positions with regard to international bodies dealing with telecommunications (Hills and Papathanassopoulos, 1991:134).

Although up to the Green Paper, the Community was short in binding legislation, the Council approved several relevant documents along these action lines 23. On 25 July 1985, the Council decided that within 18 months the Community should define its action in the field of telecommunications within the scope of the RACE programme (Council, 85/372/EEC). In the following year, the Council managed to pass a directive on the initial stage of the mutual recognition of type approval for telecommunications terminal equipment (86/361/EEC). In the same year, the Council adopted the Commission's recommendation on the co-ordinated introduction of ISDN in the Community (86/659/EEC). But because the development of this sophisticated digital network was not the prime concern of less favoured regions, the Commission used the STAR programme as a trade-off for their agreement on ISDN. And, indeed, on October 1986 the Council adopted a regulation on the STAR programme whose purpose was to strengthen the economic base in the less favoured regions, to foster job creation, and to help raise technological standards in those areas, by improving the supply of advanced telecommunications services and by integrating those regions into large telecommunications networks (3300/86/EEC). The Council has also passed some legislation on other technical issues such as the introduction of pan-European cellular mobile communications (87/371/EEC), the adoption of common standards for DBS (86/529/EEC), among others. Along the lines of standardisation, the Commission set up the European Telecommunications Standard Institute (ETSI) which would inevitably compete with other national and international standardisation bodies.

The EU intervention during this period focused on industrial policy initiatives and R&D programmes. Programmes such as ESPRIT and RACE were showing some results and the development of ISDN was perceived as a crucial element in the competitiveness of the European industry. In spite of obvious efforts, at that time, the Community policy remained largely compartmentalised with particular emphasis on technical and thus less controversial issues. Wider liberalisation was already on the agenda but, because consensus was difficult, not much progress was made until the 1987 Green Paper on the development of the Common Market for Telecommunications services and equipment (COM(87)290, 30.06.87).

Additional powers to liberalise the telecommunications sector emanated from the Single European Act, signed in February 1986. The SEA aimed at the completion of a truly common market by January 1993 and the telecommunications sector would be an indispensable constituent of this newly liberalised market. The new momentum gathered pace with the re-enforcement of arguments concerning the urgent need of economies of scale in the telecommunications sector. No national Community market share represented more than 6% of the world telecommunications market (the total Community market share was 22.4%); whereas the US represents 35% and Japan accounts for 11% (Ungerer and Costello, 1990:33). So, the argument goes, if European companies cannot be competitive with fragmented national markets, a wider regional market should be opened up. Moreover, countries with the most powerful telecommunications industries had already introduced regulatory changes at domestic level (e.g. US, UK and Japan) or were preparing reforms (e.g. Germany, France and The Netherlands). The Commission's success in putting forward the Green Paper also resulted from its persuasiveness during what Dang-Nguyen called the support seeking phase (1983-86). Contrary to previous times, the Green Paper gained consensus among a wide variety of actors.

Thus, the 1987 Green Paper should not be seen as a policy initiator, it rather builds on previous liberalising/restructuring arguments and proposes more competition in a Europe-wide market. With the development of a Common Market in perspective, the Commission sets out main objectives in the Green Paper: a common market in telecommunications terminal equipment, a common market in telecommunications services, a common market in network equipment, supposedly to ensure the Community's future position in large-scale information technology (Ungerer and Costello, 1990:191-192; COM (87) 290, 30.06.87). The provisions of the network infrastructure and basic services were to remain unchallenged, under the control of national PTTs. Once the liberalisation of infrastructure was not contemplated, service providers would necessarily use existing networks, so the Green Paper recommends that consensus must be achieved on standards, frequencies and tariff principles in order to agree on the general conditions imposed for services provision in the competitive environment. The consequent directive on Open Network Provision (ONP) would be adopted by the Council in June 1990 (90/387/EEC) in order to guarantee non-discriminatory access to the infrastructure.

The radical liberalisation of equipment and services would also require the separation of regulators and operators. Tasks of regulation and technical standardisation should no longer go together with commercial activities, once network operators could use their privileged position to protect their market. Another form of so-called unfair practice to be contemplated by the Green Paper was cross-subsidising between different branches of the business. Traditionally, PTTs have been transferring capital from most profitable areas such as international lines to support less profitable services but in the future this was perceived as having the potential to hamper new entrants from entering the market. Interestingly enough, the Green Paper did not put too much emphasis on industrial policy issues, focusing mostly on regulatory matters.

Being a consultation document, the Green Paper required subsequent legislation to implement its provisions. During the process of drafting legislation some compromises became unavoidable, weakening somewhat the original positions (Bauer and Steinfield, 1994:51). Still, steady progress has been made and a stream of directives, decisions and recommendations followed suit. Amongst the most relevant binding legislation are the 1988 directive on competition in terminal equipment markets (88/301/EEC) and the 1990 directive on competition in the telecommunications services markets (90/388/EEC). A par with the liberalising trend, the Council has also approved legislation concerning industrial issues already in the agenda such as ISDN (89/C196/04) and concerning the development of Europe wide networks and services like GSM (90/C329/09).

Clearly the Commission wished to move faster particularly in terms of infrastructure liberalisation but EU less favoured countries (Portugal, Spain, Ireland and Greece) curbed the Commission's ambition to introduce full liberalisation as soon as 1996. Whilst the other member states agreed to comply with infrastructure liberalisation by January 1998, the three Southern states and Ireland have been granted a further five-year delay to 2003 (Financial Times, 18 November 1994).

Although the future development of the EU telecommunications policy depends on how the union develops as a political entity, DG XIII officials believe that telecommunications development will be centred in three areas. 'The first comprises follow-up actions to the recent Green Paper on Mobile Communications. The second is the preparation of a Green Paper on regulation of the basic transmission infrastructure, taking up where policy initiatives in the satellite and mobile communications fields left off. The third is the evolution of Open Network Provision (ONP) in an increasingly competitive environment' (Berben, 1994:2). In fact, the Commission has first pushed for equipment and services liberalisation and it will continue to push for the liberalisation of basic transmission infrastructure, even if little is known about its impact in EU member states in general and in peripheral regions in particular. The so-called Bangemann Report (1994) on Europe and the global information society, endorsed by the Corfu Summit, clearly emphasises the need for infrastructure liberalisation and strongly argues for the development of new markets, based on the acceleration of liberalisation and openness.

The Community has little experience as a telecommunications policy maker and the infrastructure liberalisation is bound to be a highly complex testing ground. Furthermore, the EU as a regional actor is not adequately accountable to European citizens. 'Power is increasingly concentrated in the hands of small bureaucratic groups representing key ministries, often successfully insulated from parliamentary control and public scrutiny (Dang-Nguyen et. al., 1993:112). The European telecommunications policy has also been criticised because wider social aspects have been absent from its agenda. By way of cross-subsidising 24 and social tariffication 25 , traditionally telecommunications operators have been used as instruments of income redistribution. Arguing for a fairer system, the EU has defended cost-oriented pricing 26 which benefits larger consumers and neglects residential users. This reflects the lack of power among consumer groups representing the interests of residential users and it also suggests that a small group of actors representing the interests of big business and the industry do indeed determine, to a large extent, the outcome in this policy area.
 
 

4.2. Broadcasting Policy

Contrary to the telecommunications sector, the Commission's attempts to develop a wider policy for the broadcasting sector, has been up to now a quite unsuccessful venture. The most relevant regulation for the sector is still a national matter and the most important pan-European broadcasting developments (e.g. Astra Satellite) depend on private capital interests. Nevertheless, technological developments which made it possible for the Community to spill-over its political intervention from computing to telecommunications in the 1970's, have also allowed the Community to intervene in this more controversial policy area in the 1980's - broadcasting.

In fact, the Commission held the view that tele-carried services, among which is broadcasting, play a decisive role in the development of an integrated market. But some member states were not prepared to see the Commission extending its authority into what they saw as a 'cultural' issue while public service broadcasting companies reacted against market liberalisation. Moreover, other international bodies such as the CoE and the EBU were perceived as representing the cultural interests of broadcasting versus the economic bias of the EC (Hills and Papathassopoulos, 1991:126). Consequently, as Collins points out, the Community's actions in the broadcasting and audio-visual 27 sector have had to be undertaken either as strictly economic measures which are permitted under the EEC Treaty (the most notable instance here has been the Television Without Frontiers policy which established a single Community broadcasting market) or by using the Commission's limited discretionary spending powers (the most notable example here being the Community's MEDIA 92, latterly MEDIA 95 programme) (1994:24-25). Once the Commission was determined to further expand economic and hence political integration through yet another policy area, it had to fight not only internal divisions but also cultural and ideological resistance in the member states. Just like in the telecommunications sector, the main rationale to intervene was and still is related with competitiveness. In terms of hardware there is a view that economies of scale are needed to be competitive and in terms of broadcasting content there is a perception that if nothing is done European television would be dominated by US imports.

Although the EU intervention in the telecommunications sector has been far more successful than in broadcasting, both sectors have in common some EU actors and the traditional tensions between liberals and interventionists. Amongst the Commission's DGs sharing responsibilities in the broadcasting area , the most obvious tensions are between the most liberal DG III and DGIV and the most dirigistes DGX and DGXIII. DGIII (Internal Market) prepared the most relevant initiative in the broadcasting sector, the 1984 Green Paper Television without frontiers arguing for a common television market. The Competition directorate (DGIV) has no direct responsibilities in the sector but its competition policies have been highly influential. The telecommunications directorate (DGXIII) has been very relevant in the definition of satellite and High Definition Television (HDTV). Finally, the interventionist DGX is directly responsible for what it calls 'audio-visual' industries and is the co-ordinator of the MEDIA programme. Yet, despite having direct responsibility over the sector, DGX is known as being a comparatively weak DG. The European Parliament has a Committee on Youth, Culture, Education, the Media and Sport which is supposed to intervene in the broadcasting arena, but it is also believed to be ineffective.

The struggle between the two sets of DGs have always been favourable to the most liberal ones. As part of a broader industrial policy 28 , the Commission has been particularly concerned with the development and consumption of broadcasting technologies and equipment such as satellite, cable networks, television receivers, etc. However, as Alvarez et al. pointed out, expanded capacity to transmit broadcasting products needs a parallel increase in output of audio-visual products if this transmission capacity is not to be filled with imports (1990:5). Although there have been elements of policy for both soft and hardware, the EC/EU faced strong resistance from its member states and it has never managed to fully develop a broadcasting policy.

The first EU institution to acknowledge the importance of broadcasting sector was the EP which adopted in the early 1980's the Schall report (European Parliament, 1980) and the Hahn report (European Parliament, 1982). Both reports recognised the relevance of broadcasting and argued that it could be used to foster social and political integration. Collins states that integrationist sentiments were important factors in the early definition of broadcasting and audio-visual policy in the Community (1994:37). Following on from these initiatives, the Commission (DGX) prepared the report Realities and tendencies in European Television (COM(83) 222 final, 25.05.83) and proposed a policy around the following points:

1. The development of a general framework for satellite, cable and traditional networks, examining the economic aspects of the new situation;

2. The support of an industrial policy through the adoption of uniform technical standards;

3. Integration at European level of the programme market;

4. Action to maintain the pluralism of cultural identities that make up the cultural identity of Europe.

The Green Paper was a highly controversial document and the conflict between the Community's cultural goals (it has argued for cultural diversity) and the economic logic of a single broadcasting market was evident in this consultation document. So, during lengthy negotiations and hard bargaining process leading up to the 1989 Directive, much redrafting had to be done. The final directive (89/552/EEC), although compromising between rival interests, represents a victory for commercial forces and those who favoured anti-protectionist policies, among which were the US movie industry (Collins, 1994:69; Negrine and Papathanassopoulos, 1990:76).

Generally, it enshrines the objectives of:

1. Creating a common market in television broadcasts and programme supply;

2. Promoting independent production and distribution enterprises, and in particular by small and medium sized enterprises;

3. Stimulating the audio-visual sector in countries with a low production capacity and/or in a restricted language area;

4. Establishing minimum standards for television advertising and sponsorship, prohibiting the advertising of certain products, including tobacco, and regulating the advertising of alcohol on television;

5. Establishing a European content quota (and enabling Member States to establish specific language regulations and quotas) and protection for the cinema exhibition sector;

6. Establishing a right to reply;

7. Protecting minors from undesirable programming, especially violent or pornographic programming (as quoted in Collins, 1994:69).

To sum up, the most relevant result of the 1989 Television without frontiers directive is that EU governments cannot impede broadcasts to be received in their countries and so technical standards had to be harmonised. Market integration through the Television without frontiers directive and transmission standardisation (the Council directive on the MAC-packet family known as the Satellite television directive, 86/529/EEC) can be seen as the most relevant liberal initiatives, although there are elements of an industrial policy attached to it. The MAC directive was designed to encourage the development of pan-European television services and to support the electronics industry. For that, the Community direct broadcast satellites were required to adopt the MAC standard if they were transmitting signals at 65dBW or more. Liberals wanted the expansion of markets as they were perceived as a pre-condition for success both in electronic and production industries, but paradoxically a dirigiste approach was needed to encourage the opening of the market.

In any case the MAC directive was a total failure. Because it was badly drafted, the most important satellite initiatives in the Union escaped the requirements of the directive transmitting at less than 65dBW power and the directive had to be removed. The most important satellite broadcasting system in Europe (Astra) is the best well known example of the failure of this directive. Using older and cheaper technology (PAL standards), the Astra consortium managed to keep the costs of transmitting and receiving lower than those of their competitors. But the MAC case is far from being the only non-success story of the EU's intervention in broadcasting technology. HDTV was another troubled episode.

The Commission planned that D2-MAC transmissions in standard 4:3 picture size ratio would be generally established in Europe, and would be followed by 16:9 D2-MAC transmissions and then by 16:9 HD-MAC (Collins, 1994:110). The future European HDTV standard was supposed to give companies such as Thompson (French) and Philips (Dutch) the impetus they needed to face American and Japanese electronic companies. But both the European and Japanese HDTV standard, based on analogue encoding techniques, soon ran into trouble and it is now believed that the American digital HDTV standard is the one likely to survive. The dirigiste DG XIII, where the HDTV initiatives were centred, faced enormous opposition from the UK whose positions were vindicated by technological developments on the other side of the Atlantic.

Indeed, dirigistes' most obvious, however modest, victory was the MEDIA programme co-ordinated by DGX. Contrary to most Commission's broadcasting initiatives, the MEDIA programme concentrated on content and aimed at counterbalancing the impact of an open market for broadcasting products as envisaged by the Green Paper and directive Television without frontiers. After a phase of pilot experiments (1987-1990), the Council of Ministers adopted the programme MEDIA 95 (Council, 90/685/EEC) with a budget of 200mECUs.

In the Commission's wording, the MEDIA programme has five guidelines to orient its actions in the audio-visual industry: creating a European audio-visual area, setting up professional synergies, mobilising 'seed capital', maintaining a balance between market forces and, as a corollary, between the media (Commission of the European Community, 1993a:3). MEDIA's numerous sub-programmes (such as Scale, Babel, Script, Cartoon, etc.) are expected to foster cultural pluralism by supporting audio-visual cultures perceived as being threatened by a single broadcasting market. The MEDIA programme represents a serious effort developed by those representing the cultural interests within DGX, but as the programme stands it is unlikely to be sufficient to enable audio-visual industries to survive in small Community countries (Maggiore interviewed by Collins, 1994:103).

The 1994 audio-visual Green Paper on Strategy options to strengthen the European Programme Industry (COM (94) 96 final) tried to trigger a wide-ranging debate on the future of the European programme industry in the international context. However, this document does not present significant new proposals, does not tackle the root causes of the problems faced by the European programme industry and, as most of the EU broadcasting documents, it reflects contradictory goals. The development of MEDIA II 30 programme - designed to take over from the MEDIA programme - can be perceived as the only concrete outcome of the consultations conducted by the Commission on the basis of this Green paper.

The future of the EU broadcasting policy depends on how different forces develop in the broadcasting arena and on the future of the Union as a whole. At this stage, the clear contradictory interests amongst the main actors remain in place and the Union's policy reflects these tensions. Generally, on the one hand, there are stronger interest groups pushing for a free market in broadcasting products and, on the other hand, there are weaker actors who believe that if protective action is not taken, medium and small companies and small countries are bound to lose out. Moreover, further intervention in the broadcasting arena will also depend on how the Union develops from now on. Basic conflicts between those who defend a closer political union and those who argue that the state should continue to be the essential political unit are far from being resolved.
 
 

5. Conclusion: EU Communications Policy and Portugal as a LFR

From what has been said about EC/EU broadcasting and telecommunications policy, it can be inferred that they are not designed for the benefit of less favoured regions (LFRs). As we have shown, the rationale behind the Commission's intervention in communications has little to do with the specific needs of LFRs such as Portugal. Accepting that communications technologies have an enormous economic potential and that economies of scale are needed, only countries with strong electronics industries such as Germany, France and the The Netherlands are likely to benefit. Generally, EU communications policies are conceived to support the European industrial giants to fight foreign competition and to enable them to compete on a world-wide basis.

The EU telecommunications policy has been developed around two main fronts: as an industrial policy to help European companies to regain some of the lost ground, and as part of the liberalisation and pro-competition bandwagon, so markets can be opened up and economies of scale realised. The R&D programmes such as ESPRIT and RACE are the most visible face of the dirigiste industrial policy developed by the Community. As we will expand in Chapter VI, Portugal was one of the countries which benefited less from these programmes. In the RACE programme, for instance, Portugal had 23 participations whilst the UK had 148, Germany 146, and France 144 (Schnöring, 1994:152). The other major aspect of EC/EU intervention - market liberalisation - is also bound to have no significant impact from the economic point of view. Portugal does not have the economic potential to develop its own electronic industry and it does not have efficient basic or advanced services, so it is difficult to profit both from the most important telecommunications R&D programmes and from the opening up of the markets.

Recognising this obvious reality, the Commission did not have an alternative but to try to convince LFRs that their special needs would be addressed as well. Therefore, it put forward telecommunications programmes which would help countries like Portugal to upgrade their infrastructure and to introduce advanced services. From 1987 to 1991, some 200 million dollars were spent in launching digitalisation and advanced services, and the EC contribution amounted to 130 million dollars (APDC, 1993:16). These figures may be substantial for a small country, but insignificant if compared with the profits that liberalisation is expected to deliver to big European manufacturers. STAR and Telematique are clearly the best examples of the trade-off between the Commission and LFRs for opening-up their telecommunications market.

If some trade-off can be perceived in the telecommunications sector, the same does not happen in the broadcasting one. The opening up of the television market with the consequent abolition of restrictions to the free circulation of broadcasting products means that European productions will enter the country with even more ease. However, because Portugal does not export television products to Europe, this liberalisation will not bring any benefits to national companies. Having an important TV production industry, the UK is likely to be one of the European countries which will benefit most from the EU intervention in this area. Moreover, since the economics of television are not favourable to small countries further liberalisation is likely to reinforce existing tendencies like media integration, development of conglomerates and standardisation of contents.

In the broadcasting sector, not only liberals have their victories. Interventionists also managed to put forward proposals and some became law. The Council's MAC and HDTV directives, which were clearly industrial policy initiatives, had also no relevance for Portugal, given that the country has no role to play in the broadcasting technologies industry. Although attention was (and still is) very much concentrated on the electronics hardware industry (medium) rather than on the content (message), dirigistes managed to see the MEDIA programme approved by the Council. If this programme had been designed differently, it could have contributed to the development of audio-visual production in small countries. But because the same criteria to allocate resources are used for either small or big countries, those with competitive advantages like the UK are likely to benefit the most. Indeed, in almost all MEDIA sub-programmes Portugal is one of the countries with less projects submitted and/or approved (Media Desk, 1994; see Chapter VII). Plus, the chairpersons of Portuguese broadcasting companies stated that there is no close relationship between their companies and the Union and that so far they have not applied to and benefited from EU programmes.

Although neither telecommunications nor broadcasting policies have been developed to support LFRs, there is a clear difference between the impact of these policies in Portugal. With the support of specific programmes for LFRs, the Portuguese telecommunications companies have been modernising the basic infrastructure and launching advanced services. In terms of broadcasting, no such trade-off exists and the Union has not compensated in any clear way countries who were prepared to open up their markets but do not have conditions to compete on a regional and global scale.
 
 

Footnotes:

1. The EC/EU as an institutional entity has always been difficult to define. It has been conceptualised as a federation in the making (Hallstein), a supranational organisation (Haas), an intergovernmental bargaining system (Scharpf), an international regime (Hoffmann) and a concordance system (Puchala) (quoted in Dang-Nguyen, 1993:94).

2. The OECD (The Organisation for Economic Co-operation and Development) was founded in 1961 and took over from the OEEC (Organisation for European Economic Co-operation). At that time, its main objective was to administer the Marshall Plan for European economic recovery. These days, the OECD objectives however go far beyond those of the original organisation. The principal committee within OECD concerned with Communications is the Information, Computer, and Communications Policy Committee (ICCP).

3. The IMF (International Monetary Fund) and the World Bank are the result of the 1944 Bretton Woods Conference. The IMF was designed to alleviate problems of currency instability by helping countries to have access to short-term credit facilities. The World Bank was to provide long-term loans for major investment schemes. Both organisations have deviated from their original goals, but it is not in the scope of this study to assess their current positions and real objectives.

4. The General Agreement on Tariffs and Trade was established in 1947 and around one hundred countries are part of the agreement. Its main goal is to ensure that markets are open up and that competition is secured.

5. ETSI was proposed for the first time in the 1987 Green Paper on the Development of the Common Market for Telecommunications services and equipment (COM (87)290, 30.06.87).

6. Although assuming the non-nexistence of a generally accepted definition, integration could be considered as an evolutionary process, through which different entities decide to adopt collective action based on consensual values for the achievement of common goals (Groom and Heraclides, 1985:174). Thus, a distinct new entity comes into existence, grown out of the total/partial merger of individual political, social and economic structures.

7. It was not our objective to fully analyse integration theories. Yet the federalist theory of integration has been very relevant in the academic analysis of European integration. In very general terms, federalists see the ultimate goal of integration being the creation of a supra-national state which possesses sufficient political authority and coercive and material power to satisfy the member-states' needs for collective defence, internal security and economies of scale.

8. There is no exact legal definition for the word and it has been used in all possible senses, according to the beliefs of those who use it.

9. Here we are assuming that there is some sort of parallelism between nation and state which, naturally, is not the case in several EU members (e.g. Spain, United Kingdom).

10. The Portuguese commissioner, João de Deus Pinheiro, was re-appointed in 1994. Commissioners staying for a second four year period are expected to be responsible for a more relevant policy area.

11. The European Commission DG's are:

DG I - External Economic Relations

DG II - Economic and Financial Affairs

DG III - Industry

DG IV - Competition

DG V - Employment, Industrial Relations and Social Affairs

DG VI - Agriculture

DG VII - Transport

DG VIII - Development

DG IX - Personnel and Administration

DG X - Audio-visual Media, Information, Communication and Culture

DG XI - Environment, Nuclear Safety and Consumer Protection

DG XII - Science, Research and Development

DG XIII - Telecommunications, Information Market and Exploitation of Research

DG XIV - Fisheries

DG XV - Internal Market and Financial Services

DG XVI - Regional Policy

DG XVII - Energy

DG XVIII - Credits and Investment

DG XIX - Budgets

DG XX - Financial Control

DG XXI - Customs and Indirect Taxation

DG XXII - Coordination of Structural Instruments

DG XXIII - Enterprise Policy, Distributive Trades, Tourism and Co-operatives (CEC Directory, 1993)

12. EU legislation may take different forms: Regulations are directly enforceable laws, applicable and binding in the members states. Directives are also legally binding and addressed to the member states but it is up to the member states to decide how the intended results of legislation are to be achieved (implies national legislation). Decisions can be addressed to members states, individuals or legal entities (e.g. companies) and are directly binding on the addressee. Recommendations and opinions are not legally binding but they have political influence.

13. The first direct universal suffrage took place in 1979.

14. Lobbying originally meant the informal influencing of parliamentarians, but in this study it is perceived as 'action exerted on the public authorities by individuals, whether in isolation or more generally associated in pressure (interest) groups, with the goal of defending their particular interests' (Julien, 1993: 29-30).

15. Before the SEA, the decision-making process could be blocked if just one member vetoed, so often lobbying on a merely national basis was perceived as being enough.

16. This number includes those who are permanently positioned in Brussels and those (individuals or groups) who come to the European capital to pursue particular issues.

17. It is important to bear in mind that at that time the postal and telecommunications sectors were intimately linked, operating under the same organisation and accountable to the same minister.

18. A market is a natural monopoly when it is cheaper for a single firm to produce at various levels of output than any other firm or combination of firms to do so. Natural monopolies enjoy economies of scale over a large range of outputs (goods and services produced) (Westerway, 1990: xviii).

19. One of the most relevant watershed studies named 'European Society faced with the Challenge of New Information Technologies: a Community Response' (COM (79) 650 Final) was approved by the Council in December 1979.

20. Telespeed Services v. United Kingdom Post Office, Case 861/82, Judgement of 10 December 1983, 1 Common Market Law Reports 457.

21. Telecommunications was understood by the European Commission as part of the information technology industry, which encompassed microelectronics, computers, consumer electronics and telecommunications (Dang-Nguyen, 1993:99).

22. The 12 largest European electronics companies (GEC, ICL, Plessey, Thomson-Brandt, CIT-Alcatel, Bull, Siemens, AEG, Nixdorf, Olivetti, STET/IRI and Philips) played a major role in the establishment of the ESPRIT programme (Schneider, 1992: 57-58).

23. For a list of official documents concerning Community Telecommunications policy during this period see, inter alia, Commission of the European Communities (1992) Official Documents Community Telecommunications Policy, September 1992, XIII (92) 260-EN.

24. Cross-subsidies are usually perceived as the funding of losses made on one line of business from gains made on other lines. For example, PTTs argue that international services have been subsidising local calls.

25. Although social tariffication has been perceived quite differently by actors involved in telecommunications, it is usually associated with special pricing and accessibility rules for the most vulnerable members of society (e.g. the elderly, handicapped persons, etc.).

26. It is interesting to note that the EU has not yet defined cost-oriented pricing and there is no consensus on mechanisms to calculate the costs.

27. In the EC/EU context, there are significant differences in the usage of the terms 'broadcasting' and 'audio-visual'. Collins offers the useful presumption that the term 'broadcasting' implies a liberal, market oriented, policy whereas the term 'audio-visual' suggests a more pro-active and dirigiste emphasis (1994:17). Indeed, it is mainly the dirigiste DGX which refers to film and television as audio-visual. Because the EU intervention in this area has a clearly economic edge, we opted for the term 'broadcasting'.

28. Generally, an industrial policy creates the conditions in which industry can flourish. Hills (1984) sees industrial policy as domestic adjustment to international trade patterns.

29. This directive is commonly known as the Television without frontiers Directive.

30. MEDIA II has a proposed budget of ECU 400 million for the period 1996 to 2000.