Case C-475/12, UPC DTH – when Hungary wants a regulatory grip on foreign suppliers of TV and radio [judgment 2014, ECLI:EU:C:2014:285]

Who has regulatory competence over satellite radio and television received from companies located in other Member States? And can a regulatory authority in a receiving state acquire some regulatory control by classifying them as an electronic communications service?

Facts
UPC DTH supplies its customers with packages of television channels and radio stations. UPC DTH has its corporate seat in Luxembourg but its customers are in various EU Member States.

The defendant is the Hungarian national regulatory authority known as the NMHH (Nemzeti Média- és Hírközlési Hatóság Elnökhelyettese). In the course of one of its Hungarian market investigations, it sought specific contract details from UPC DTC in Luxembourg. It was a request declined by UPC DTH, which pointed out that it was registered and regulated by the state of Luxembourg. The Luxembourg regulatory authority also explained that under Luxembourg’s laws, UPC was not a supplier of an electronic communications service.

For this refusal, the NMHH duly decided to fine UPC DTH – which, in turn, appealed the decision. Eventually, the matter was brought before the Hungarian courts.

From the Questions of the referring court, the dispute appears to turn on whether UPC DTH is an electronic communications service, as defined in Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (Framework Directive).

Articles 2(c) and (f) of Directive 2002/21/EC provide:

(c) “electronic communications service” means a service normally provided for remuneration which consists wholly or mainly in the conveyance of signals on electronic communications networks, including telecommunications services and transmission services in networks used for broadcasting, but exclude services providing, or exercising editorial control over, content transmitted using electronic communications networks and services; it does not include information society services, as defined in Article 1 of Directive 98/34/EC, which do not consist wholly or mainly in the conveyance of signals on electronic communications networks;
(f) “conditional access system” means any technical measure and/or arrangement whereby access to a protected radio or television broadcasting service in intelligible form is made conditional upon subscription or other form of prior individual authorisation;

Perhaps in parallel to this action, the EU Commission has announced its decision to issue a letter of formal notice against Hungary (2011/4127) in respect of a requirement of legal residence for the general authorisation and registration of broadcasting services provided via satellite.

Questions Referred
According to the Curia website, the Fővárosi Törvényszék has asked:

1. May Article 2(c) of the Framework Directive, that is to say, Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002, as amended by Directive 2009/140/EC of the European Parliament and of the Council of 25 November 2009, be interpreted as meaning that a service by which a service provider supplies, for consideration, conditional access to a package of programmes which contains radio and television broadcast services and is retransmitted by satellite is to be classified as an electronic communications service?

2. May the Treaty on the Functioning of the European Union be interpreted as meaning that the principle of the free movement of services is applicable to the service described in the first question, in the case of a service supplied from Luxembourg to Hungary?

3. May the Treaty on the Functioning of the European Union be interpreted as meaning that, in the case of the service described in the first question, the country of destination, to which the service is sent, is entitled to limit the supply of that type of services by requiring that the [supplier of the] service has to be registered in that Member State and has to be established as a branch or independent legal entity, and allowing this type of services to be supplied only through the establishment of a branch or independent legal entity?

4. May the Treaty on the Functioning of the European Union be interpreted as meaning that administrative proceedings relating to the services described in the first question, regardless of the Member State in which the undertaking supplying that service operates or is registered, will be subject to the administrative authority of the Member State which has jurisdiction on the basis of the place in which the service is supplied?

5. May Article 2(c) of Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 (Framework Directive) be interpreted as meaning that the service described in the first question must be classified as an electronic communications service, or must such a service be classified as a conditional access service supplied using the conditional access system defined in Article 2(f) of the Framework Directive?

6. On the basis of all the foregoing, may the relevant provisions be interpreted as meaning that the service provider described in the first question must be classified as a provider of electronic communications services pursuant to European Community law?