Overview (October 2001)

Broadcasting

Swedish broadcasting legislation has its roots in the Freedom of Expression Act, which is part of Swedish constitutional law. The Freedom of Expression Act declares that broadcasting through wire may be performed by anyone without the need for a permit and that broadcasting through other means may be regulated by law. Such regulations may include licensing procedures and provisions (eg, objectivity requirements and obligations to include news) for broadcasting.

The regulations regarding broadcasting can be found in the Radio and Television Act (SFS 1996/844). This act sets the standards for the application procedures regarding terrestrial broadcasting for both analogue and digital channels. The act appoints the Radio and Television Authority as the governmental agency that administrates application procedures and approves licences, except for licences for terrestrial television broadcasting and other broadcasting aimed at the entire country. These are granted by the Swedish government, although the authority does the preparatory work and provides reasoned opinions.

To date the Swedish government has permitted two television companies to broadcast a total of three channels on the terrestrial analogue network. They are the Swedish Television Company's two channels SVT1 and SVT2, which are financed through a compulsory licence fee, and TV4, which is privately owned and financed through advertisements. It is unlikely that further licences will be granted for analogue television broadcasting in the terrestrial network, since this will be replaced by digital transmissions.

The Radio and Television Act does not provide for an application procedure and no permits are required to make television channels available to Swedish viewers via satellite. The only requirement is that of registering with the authority.

Terrestrial digital broadcasting
In 1997 the Swedish government decided to introduce digital television and in June 1998 the first licences for digital terrestrial broadcasting were granted in Sweden. Eleven companies, out of more than 50 applicants, were licensed to broadcast on the eight frequencies initially available. The threat that some companies would have to share the frequencies on a time-share basis due to the high demand was solved by the government's decision to extend the number of available frequencies to 24. The government awarded licences based on the financial standing of the applicant and the prospective programme content. There is also a requirement regarding technical coordination that applies to applicants who have received licences. Licences have been awarded to companies including Swedish Television (four channels), TV4, K-World, Canal+ and TV1000.

Supervision
Television channels (digital channels are now commonly known as 'programs') that are broadcast with government permission are supervised by the Swedish Broadcasting Commission (SBC). The SBC examines the content of the programming, with regard to the provisions set in the government licence and to ensure that the rules on advertising are observed. Advance censorship of broadcasting is prohibited by the Freedom of Expression Act. This means that the SBC's examination is limited to monitoring programmes that are broadcast and that neither the SBC nor any court can prevent or prohibit a programme from being broadcast.

Satellite broadcasters and the digital terrestrial network
Among those who have been granted licences for digital terrestrial broadcasting are the commercial channels TV3 (owned by the Modern Times Group, MTG) and Kanal 5 (owned by SBS-Broadcasting), both originally broadcast via satellite from the United Kingdom. Their programming in the digital terrestrial network is supposedly the same as their satellite programming. However, the rules regarding advertising are not the same in Sweden as in the United Kingdom. In Sweden programmes cannot be interrupted for commercial breaks. This has led to the odd situation that digital terrestrial viewers of TV3 and Kanal 5 have their programmes interrupted, not with advertisements, but with information messages describing the legal discrepancy. Although the legislation regarding television advertising and the intent of the Swedish government on which rules should apply to the digital terrestrial network is clear, the actual jurisdiction of the terrestrial broadcasting by these companies is not. In a decision the SBC found that it does not have jurisdiction over TV3's and Kanal 5's digital terrestrial broadcasting. The reason for SBC's conclusion was that although the licences were granted to the respective Swedish entities of the international companies (TV3 AB and Kanal 5 AB), the editorial control and the actual operation of the programming was carried out in the United Kingdom (by TV3 Ltd and Kanal 5 Ltd), under licences from the British Independent Television Commission. Since editorial responsibility can be held by only one of the respective companies, there were no grounds for the SBC's jurisdiction. This case questions the licensing system established by the Swedish government in instances of terrestrial retransmission of satellite broadcasts. The government has established a committee to investigate the possibilities of changing the Swedish rules on television advertising.

One recent development of the digital terrestrial network is that MTG has announced its departure from the network in August 2001. Consequently, TV3, TV 1000 and a couple of other digital channels will no longer be available through terrestrial transmissions, but only via satellite and cable.

In an effort to increase the value and demand for the digital terrestrial network the government has made additional frequencies available and has invited interested applicants to bid for permits to broadcast on these and thus replace MTG's channels. However, there is a debate over whether MTG's frequencies can actually be offered to the government or if they are blocked by MTG during the full licence period (ie, until the end of 2002).

Compulsory redistribution in cable networks
Distribution via cable may be performed without a permit. However, this principle does not affect regulation of the compulsory redistribution of certain television channels - the so-called 'must carry'. The compulsory redistribution means that cable operators must provide transmission capacity in their networks for certain channels. Accordingly, operators of cable networks comprising more than 10 households must include in their programming offers four channels that are broadcast with government licences available with no payment other than the compulsory licence fee and adhering to certain provisions of impartiality and objectivity. Channels that qualify for must-carry status in analogue cable networks are SVT1, SVT2 and TV4, and in digital networks SVT1, SVT24 ( a 24-hour news service operated by the Swedish Television Company), TV4 and one additional channel out of five regionally based channels that are broadcast by the Swedish Television Company. In addition, cable networks that reach more than 100 households must include channels broadcast by local cable broadcasters appointed by the authority.

Telecommunications

The Telecommunications Act (597), which came into force on July 1 1993 and was formulated to comply with the relevant EC legislation and directives (particularly the Open Network Provision Directive, 90/387/EU), introduced some significant changes to the hitherto virtually unregulated Swedish telecommunications market. One of the most important changes it introduced was a licence requirement for commercial telecommunications activities. Before this reform Sweden was one of the few countries where the telecommunications market was regulated by assorted government statutes, ordinances and recommendations, but no licences were required.

The introduction of the Telecommunications Act has contributed to increased and more efficient competition in the Swedish telecommunications market, as a number of operators providing telecommunications services have expanded in recent years. According to the Swedish National Post and Telecom Agency (PTS), the total telecommunications market for 2000 amounted to approximately Skr39,900 (excluding the market for network capacity and interconnection revenues). Telia AB is the former Swedish public telephone operator and the largest telecommunications company in Scandinavia. It used to hold a dominant position within certain sectors of the telecommunications market, but lost a considerable amount of its clientele after the major telecommunications reform (the so-called pre-selection reform) was implemented in 2000. At the end of the first half of 2000, 996,000 telephony customers had chosen operators other than Telia as their pre-selection operator. This trend has had a major impact on the entire Swedish telecommunications market.

Sweden's telecommunications legislation is primarily made up of three acts, the first being the most significant:

• the Telecommunications Act (597/1993);
  
  
• the Radio Communications Act (599/1993); and
  
  
• the Radio and Telecommunications Terminal Equipment Act (121/2000).

The Radio and Telecommunications Terminal Equipment Act replaced the Telecommunications Terminal Equipment Act (1527/1992), which was rescinded on April 8 2000. The three acts are designed to promote a competitive market and ensure that private individuals, legal entities and public authorities have access to efficient, reliable, secure, good-quality and reasonably priced telecommunications services.

Regulatory authority
PTS is the main authority within the telecommunications sector. PTS was founded on July 1 1992 as a government agency to deal with all issues relating to telecommunications, information technology, radio and postal services. PTS exercises its powers under the Telecommunications Act, the Radio Communications Act and other related legislation. PTS decisions can be appealed to the general administrative courts.

The overall task of PTS is to enhance the development of the Swedish telecommunications sector and to supervise its functioning. To meet these objectives PTS performs a diverse range of functions, broadly divided into two categories: (i) management of the telecommunications and radio market and (ii) supervision and enforcement.

The primary functions of PTS relating to management of the telecommunications and radio market include the following:

• administering the notification procedure;
  
  
• granting and revoking licences and monitoring compliance with the licence conditions;
  
  
• imposing licence conditions for licence holders;
  
  
• determining numbering plans;
  
  
• allocating the radio frequency-spectrum within Sweden in accordance with the Radio Communications Act;
  
  
• investigating cases of radio interference; and
  
  
• emergency planning.

PTS's functions relating to supervision and enforcement include the following:

• issuing regulations and decrees relating to the telecommunications sector;
  
  
• monitoring compliance with the existing telecommunications and radio communications legislation;
  
  
• mediation between the parties in certain disputes; and
  
  
• issuing injunctions and prohibitions required to ensure compliance with the Telecommunications Act and Radio Communications Act and setting forth licence conditions or regulations under these acts.

The Telecommunications Act
The Telecommunications Act contains provisions governing the transmission of telecommunications messages via telecommunications networks and the provision of network capacity for such transmission. The act does not apply to the public broadcast of radio programmes.

Licence and notification
The provision of telephone services to a fixed termination point within the public telecommunications network, as well as the provision of mobile telecommunications services or network capacity, is subject to a licence requirement if the activities in question are regarded as considerable in relation to the area covered and the number of users. The awarded licence may concern the whole of Sweden or a specific area within the country.

Where the extent of services provided is not considerable and the services therefore do not require a licence, the services may still be subject to a mandatory notification. Such notification shall be made to PTS by all operators providing they have the following:

• a network capacity;
  
  
• telecommunications services to a fixed connection;
  
  
• mobile telecommunications services; or
  
  
• other activities requiring allotment from the number plan.

Operators that are required to notify PTS of their activities shall also fulfil several supplementary obligations. These include compliance with the international agreements to which Sweden has acceded, disclosure of a non-confidential information regarding the subscriptions of individuals and legal entities, connection of emergency calls to the emergency services and submission of annual reports to PTS with respect to activities that are subject to notification.

Licences are granted by PTS. A licence shall always be granted unless the applicant cannot meet the requirements of adequate capacity and quality while carrying out telecommunications activities, or is incapable of providing the services on a permanent basis. In cases where the frequency spectrum for a specific activity is insufficient to licence all the applicants wishing to pursue the activity concerned, PTS may decide to open a tender procedure to allocate the licences.

PTS is empowered to grant an exemption from the mandatory licence obligation if special reasons exist. Licences regarding mobile telecommunications services may be time-limited whereas other types of licences are valid until further notice. A licence is usually linked to a number of specific conditions valid for a certain period of time as set forth by PTS. The licence conditions for providers of the telecommunications services may include the following obligations:

• to provide telephony services to a fixed termination point to anyone requesting such service;
  
  
• to provide a network capacity to anyone so requesting;
  
  
• to provide information about the licence holder;
  
  
• to conduct the activity continuously and with good capacity and quality;
  
  
• to maintain, without special compensation, automatic telephones for public use, taking account of public needs, the relevant volume and geographical coverage; and
  
  
• to provide operator assistance services on reasonable terms.

The licence conditions are imposed by PTS in order to achieve the objectives of the telecommunications policy and to promote efficient competition in the market. PTS may revoke a licence if a licence holder conducts its activities in direct and major violation of the telecommunications legislation or the conditions laid down by PTS. Before such revocation the licence holder is usually afforded an opportunity to take remedial action.

Interconnection
'Interconnection services' are defined in the Telecommunications Act as the physical and logical connection of telecommunications services provided in a telecommunications network to operate between the termination points of all users, both fixed and mobile, where users are afforded the possibility of access to services in the network. The duty to provide interconnection services applies to both the licence holders and other operators that are subject to a notification duty. Fees for interconnection services shall be fair and reasonable with regard to performance costs. The same shall apply to interconnection services for mobile telecommunications, if the provider of the services has a significant influence over a considerable portion of the interconnection market.

In order to prevent discrimination in the interconnection market and to monitor the activities carried out by operators with significant market power, the act lists a number of obligations for such operators, including the following:

• offering equal terms to everyone who requests interconnection services;
  
  
• providing, upon request, any information necessary for interconnection agreements; and
  
  
• supplying PTS with interconnection agreements.

According to the Telecommunications Act PTS shall, in carrying out its supervisory duties, devote special attention to interconnection agreements and, in particular, the right of access to the network in order to ensure that interconnection services are pursued in accordance with the pertinent legislation and licence conditions. PTS shall, at the request of the parties to an interconnection agreement, set forth a time limit for the completion of negotiations. If no agreement is reached between the parties within the time limit set by PTS, PTS may mediate between the parties. In cases where the parties cannot agree on the contractual terms, PTS may also set forth the terms of the interconnection agreement to the extent necessary to ensure compliance with the telecommunications legislation or licence conditions if so requested by the parties.

Broadband
In March 2001 PTS announced a 'beauty contest' for licences for fixed surface radio-access services. The radio access is a form of wireless broadband. Transmissions are made from a transmitter to fixed terminals (as opposed to universal mobile telecommunications system (UTMS) services, where transmissions are made to mobile terminals). Areas of use are expected to be fast internet access and video conferences. The applicants shall be subject to a two-phase examination by PTS. The first phase will consist of scrutinizing the financial capacity and technical feasibility of the applicants. The second will consist of an overall assessment of the effectiveness of the applicants as regards the spectrum. Four national licences shall be granted. Five applications have been submitted to PTS and a decision is due on January 28 2002. The applicants are:

• Europolitan;
  
  
• Telenordia Access (the subsidiary of Telenordia);
  
  
• Telia AB;
  
  
• Quadracom Wireless (Teracom and Arrowhead, the subsidiaries of Vattenfall); and
  
  
• Utfors AB.

Universal mobile telecommunications system
The UTMS terminals (the so-called third generation mobile telephone system and a successor to the global messaging service) will provide users with access to data communication and multimedia. On December 16 2000 PTS granted UTMS licences to the following applicants:

• Europolitan;
  
  
• HI3G
  
  
• Orange; and
  
  
• Tele2.

The licences are valid until December 31 2015. The four licensees have pledged to provide coverage for at least 99.98% of the population in Sweden by the end of 2003.

Telia AB, one of the unsuccessful applicants, appealed the decision. On June 27 2001 the Swedish county administrative court decided that PTS's decision not to grant Telia a UMTS licence was correct, as Telia did not meet the required standard of geographical coverage.

EC Regulation 2887/2000
EC Regulation 2887 of the European Parliament and Council of December 18 2000 deals with unbundled access to the local loop. This regulation was designed to promote unbundled access to the local loop and strengthen competition in local access networks before the end of 2000 in order to reduce the costs of using the Internet. The regulation came into force on January 2 2001 and required no implementation measures under Swedish law. The regulation controls access to metallic local loops, without prejudice to national obligations regarding other types of access to local infrastructures. It mandates unbundled access to the metallic local loops only for the notified operators that have been designated by their national regulatory authorities as having a significant market power in the fixed public telephone network supply market under the relevant EU provisions. In Sweden Telia AB is regarded as such a 'notified operator', and therefore is obliged to provide unbundled access to other operators active on the market pursuant to the conditions stated in the regulation.

PTS investigates Telia
In Spring 1999 PTS initiated an investigation of Telia's mobile interconnection fees. By May 2001 PTS had decided to reduce Telia's interconnection fees on three occasions. According to PTS the fees were not based on the actual costs, and Telia was therefore in violation of the requirements imposed on companies with a significant market power under both the Telecommunications Act and the EU rules. In August 2001 PTS initiated yet another investigation of Telia as Telia increased its charges for fixed telephony services by 28%. The outcome of this latest review is still pending.

Possible introduction of ENUM
The acronym ENUM has several definitions, of which 'telephone number mapping' is one. ENUM is a protocol and a database that maps telephone numbers to their internet-based addresses. Produced by the Internet Engineering Task Force, ENUM can facilitate various communication solutions where telephone numbers are used as the only call identifier.

In a report delivered to the Swedish government in April 2001 PTS recommends that tests of ENUM be performed in Sweden as soon as possible. According to PTS, ENUM would open new ways of communication and increase competition between telephone and internet operators. If awarded this assignment PTS can start work as early as Autumn 2001.

For further information on this topic please contact Rolf Olofsson, Mats Lindgren or Anna Smieszek at White & Case Advokat AB by telephone (+46 8 506 32300) or by fax (+46 8 611 21 22) or by email ([email protected]. [email protected] or [email protected]).