Communications: regulation and outsourcing in Spain: overview
A Q&A guide to communications regulation and outsourcing law in Spain.
The Q&A gives a high level overview of communications law, including authorisation and licensing, universal service obligations, spectrum use, access and interconnection, data protection and security, price regulation, subscriber management, and outsourcing and telecommunications.
To compare answers across multiple jurisdictions, visit the Communications: Regulation and Outsourcing Country Q&A tool.
This Q&A is part of the Communications: Regulation and Outsourcing Global Guide. For a full list of jurisdictional Q&As visit www.practicallaw.com/communications-guide.
The telecommunications market
The telecommunications market in Spain is dominated by three major operators: Telefonica, Vodafone and Orange. Between them, they control over 85% of total revenues.
There have been some significant acquisitions in the telecoms sector since 2014:
Vodafone acquired Ono (formerly the main optical fibre provider) for more than EUR7.2 billion. The deal was closed at the end of July 2014.
In September 2014, Orange announced the acquisition of Jazztel. The transaction was not approved by the European Commission until May 2015, and finally closed for EUR3,179 million, subject to conditions.
Telefonica paid EUR707 million to Prisa for the acquisition of Canal+, the main pay-TV platform in Spain. The acquisition was finally approved by the National Markets and Competition Commission (NMCC) in April 2015.
According to NMCC data, the market shares of the main mobile operators are distributed as follows:
Movistar has almost a third of the market share with 31.44%.
Orange has 22.89%.
Vodafone has 21.8%.
Yoigo (as the fourth network operator) has 6.73%.
Mobile virtual network operators have 17.14%.
These figures show that three major operators share more than 76% of the market.
In the fixed broadband market, the share is as follows:
Telefonica has 44.91%.
Orange has 15.74%.
Ono has 13.07%.
Jazztel has 12.34%.
Vodafone holds 8.91%.
The picture is similar here with Telefónica, Orange-Jazztel and Vodafone-Ono sharing almost 95% of the market.
The regional scenario has also changed, mostly in the north of the country. In July 2015 the Basque telecom operator Euskatel acquired the Galician R Cable for EUR1,190 million. Shortly after, the British fund Zegona Communications bought the Asturian operator Telecable, for EUR640 million. Telecable, a company that started in the 1990s as a public service, is now integrated into Zegona Communications and will trade under its name on the London market.
Restrictions on foreign ownership
Spanish and EU-registered companies can provide electronic communications services and use networks by notifying the National Markets and Competition Commission.
Companies registered in non-EU or European Economic Area countries can only enter the telecoms market and provide services in Spain through bi- or multi-lateral agreements, conventions or treaties to which both countries are party. The limitations are not on ownership but on providing the direct electronic communications services.
There are two particular conventions that encourage commercial relationships between countries and serve as the basis for providing communications services. One is the International Telecommunication Convention, signed by 193 members of the International Telecommunication Union. Another is the Agreement Establishing the World Trade Organization, signed by 161 members of the WTO. Particularly relevant is Annex 1B, General Agreement on Trade in Services.
The Spanish government is free to make any general or singular exceptions to these rules.
Broadcast TV makes use of the terrestrial radio spectrum and operates on the reciprocity principle, applied on share participation by entities placed outside the European Economic Area, with regard to licence granting.
In any event, if a company is registered outside the EEA, individual participation of either a natural or legal person in a company's social capital cannot directly or indirectly exceed 25%.
The total number of shares held by natural or legal persons who are not members of the EEA must not exceed 50% of a company's social capital.
Legislation and regulatory authorities
Telecommunications regulation. The main legislation relevant to telecoms is the recently approved Act 9/2014, of 9 May (General Telecommunications Act). It is the successor to the General Telecommunications Act 32/2003 which implements the following:
Directive 2009/136/EC on consumer protection and users' rights in relation to the processing of personal data and the protection of privacy in electronic communication (Citizens' Rights Directive).
Directive 2009/140/EC amending Directives 2002/21/EC on a common regulatory framework for electronic communications networks and services, 2002/19/EC on access to, and interconnection of, electronic communications networks and associated facilities, and 2002/20/EC on the authorisation of electronic communications networks and services.
It also introduces legal measures designed to create a suitable framework to attract investment for new network deployment.
The law serves as a solid basis for providing electronic communication services and exploiting network regulation. However, it is only a framework and will need to be developed by additional legislation. The current most notable laws include:
Royal Decree 424/2005, of 15 April, which describes extensively the conditions and eligibility for providing electronic communication services, sets up the universal service policy and grants protection to users.
Royal Decree 2296/2004, of 10 December, which establishes the process and conditions for scheduling and managing public numbering and address systems. It also regulates interconnection and access to public networks, and sets up methods of identification and analysis of operators with significant market power.
Order IET/787/2013, of 15 April, which approves the National Frequency Allocation Table (CNAF), and Royal Decree 863/2008, of May 23, which establishes use of the radio-electric public domain.
Act 3/2013, of 3 July which created the National Markets and Competition Commission (NMCC), the regulatory body of the telecommunications sector. The statute was subsequently established by Royal Decree 657/2013, of 30 August.
Royal Decree 346/2011, of 11 March, on Common Telecommunications Infrastructures and Order IET/1090/2014, of 16 June, which sets out the conditions relating to quality that apply when providing electronic communications services.
Act 25/2007, of 18 October, which relates to data retention.
Since ancillary regulations are mainly based on a Telecoms Act from 2003, it is likely that the legislator will make changes to Royal Decrees and develop further legislation as necessary in the future.
E-commerce. Act 34/2002, of 11 July, on Information Society Services and Electronic Commerce (which implements the cookies directive), and 59/2003, of 19 December, on electronic signatures both have a considerable impact on e-commerce.
Data protection. Act 15/1999, of 13 December, on Personal Data Protection, and its complementary Royal Decree 1720/2009, of 15 December, both apply to electronic communications.
Another important measure is Regulation (EU) 611/2013, of 24 June, 2013, on the measures applicable to the notification of personal data breaches under Directive 2002/58/EC on privacy and electronic communications.
Audiovisual regulation. The General Audiovisual Act 7/2010 of 31 March, implementing Directive 2010/13/EU on the co-ordination of certain provisions laid down by law, regulation or administrative action in member states concerning the provision of audiovisual media services (Audiovisual Media Services Directive), was approved to regulate new business models such as high definition and mobile television to protect competition and users' rights.
Other legislation. Spanish regulations have special emphasis on consumer and user protection. Of special note is Act 1/2007 of 16 November on consumer and user protection, which safeguards the interests of consumers in many sectors, including telecoms. Providing more detail is Royal Decree 899/2009 of 22 May, which approved the charter of users' rights relating to electronic communications.
The General Telecommunications Act establishes the following regulatory authorities:
Higher and executive bodies of the Ministry of Industry, Energy and Tourism.
Higher and executive bodies of the Ministry of Competitiveness and Economy.
National Markets and Competition Commission.
Although not explicitly mentioned in the Act, the Secretariat of State for Telecommunications and the Information Society (Secretaría de Estado de Telecomunicaciones y para la Sociedad de la Información) (SETSI), is considered a regulatory body under the authority of the Ministry of Industry, Energy and Tourism. Its main duties are to plan, manage and control the national numbering system, radio spectrum, domain names and address schemes.
The Spanish Data Protection Agency (Agencia Española de Protección de Datos –) (AEPD) is the supervisory body in charge of compliance with data protection regulations.
In practice, the two main bodies are the NMCC and SETSI. The NMCC supervises a number of sectors including telecommunications and audiovisual services, competition, transport and post, and energy. Most competition law issues that arise between operators are settled by the NMCC.
Authorisation and licences
To provide telecoms services, formal notice must be provided to the National Markets and Competition Commission (NMCC) by the relevant entity or person before starting. Once notified, the entity or person becomes an operator entitled to provide telecommunication services or use the network.
If the notice complies with all the information requirements, including administrative and technical ones, the NMCC will register the notifier in the general operators registry.
If the notice has any faults or deficiencies, the notifier will be granted time to remedy them. The NMCC may refuse, within 15 working days from the application or remedy date, as the case may be, the registration if the notification or the subsequent amendment does not fulfil the relevant requirements. If the notice is not rectified, it will be void.
The notice requirements do not apply when providing services unconnected to the exterior network or that do not use the public radio-electric domain, for example, on private property or in a small community.
Every three years, operators must notify the NMCC of their intention to continue providing services or using the network in order to maintain their operator status.
Numbers allocated from the national numbering plan must be authorised by the NMCC.
An additional permit is required to use radio spectrum. The Secretariat of State for Telecommunications and the Information Society (SETSI) grants this right through either general authorisation, individual authorisation, or administrative concession.
General and individual authorisations are granted for shared use of the frequency bands, with no limit on the number of operators or users, and strict compliance with technical conditions applicable to each use. An administrative concession is granted when the frequency bands are used exclusively or by a limited number of operators.
Depending on capacity, certain spectrum uses are subject to administrative concessions, generally where a tender is launched by the government for mobile telecommunications. A similar process is followed for granting digital terrestrial television broadcasting licences.
For general and individual authorisation, an operator must apply to the SETSI, following the procedure and requirements set out by the Ministry of Industry, Energy and Tourism and on payment of a fee.
Once an operator has been registered as a service provider, the following fees apply:
An annual general operator charge.
Telephone numbering charges (if numbering is requested).
Reservation charges for use of radio spectrum domain (if use is requested).
Telecommunications charges (if technical evaluation of infrastructure, equipment or devices is requested).
Licences and authorisations are no longer necessary to provide electronic communications services and/or use the network, just notice to the National Markets and Competition Commission (NMCC) (see Question 4). Terms can therefore last indefinitely, as long as the operator continues to comply with all the conditions.
Operator status will expire in the following cases:
When providing the service or using the network ceases.
On extinction of the legal personality of the operator.
When there is a firm administrative resolution.
In the absence of tri-annual notification to the NMCC of the intention to continue to provide services.
Operators must fulfil a number of conditions set out in Royal Decree 424/2005, including paying fees, providing information when required and conserving numbers. Operators must guarantee interoperability and interconnection.
General and individual authorisations are granted for shared use of frequency bands, with no limitation on the number of operators or users. Strict compliance with the technical conditions applicable to each particular use is required. Licences are granted for five years, renewable by 31 December of the fifth year of the term, depending on the availability and planning provisions of the spectrum.
For exclusive or use by a limited number of operators, administrative concessions are granted. The duration of the term is decided on a case-by-case basis and cannot be more than 20 years. The criteria for concessions include:
Any obligations listed in the authorisation.
Required investment and amortisation periods.
Observing the granted radio spectrum range.
The conditions that operators must fulfil include that they must:
Use the radio spectrum efficiently.
Pay any necessary fees.
Comply with the technical requirements.
Use the radio spectrum for a purpose different from the one that it was originally allocated.
Numbering licences are valid for three years under Royal Decree 2296/2004. The general conditions of use are that numbers:
Must be used for the particular purpose specified in the application.
Must remain under the holder's control, who must keep a record of their use.
Cannot be the object of commercial transactions.
Must be used efficiently within 12 months from assignment.
Audiovisual digital terrestrial television licences are granted for 15 years, automatically renewable for the same term. Some characteristics must be specified, such as territorial coverage, number of channels and assigned multiplex.
The Secretariat of State for Telecommunications and the Information Society and the NMCC both have the power to inspect operators to make sure that conditions are being met.
Penalties for non-compliance
Not complying with the telecommunication regulation results in an administrative sanction. According to the General Telecommunications Act, a sanction may be imposed if the telecoms service operator, among others:
Fails to comply with the conditions on network use or providing electronic communication services.
Fails to notify its intention to provide a service.
Provides a service with no licence.
Penalties will be imposed on any natural or legal person. In the case of a legal entity, this includes its legal representatives or individuals who, being a member of an administrative body, have intervened in the decisions concerned.
Offences are classified as minor, serious, and very serious, according to the scale of the damage, risk or danger caused, or other circumstances relating to the facts.
Penalties for minor breaches
Minor breaches lead to fines of up to EUR50,000.
Penalties for serious breaches
Serious breaches are fined up to EUR2 million. Where the National Markets and Competition Commission (NMCC) is competent to sanction the breach, it will normally demand an amount up to double the gross profits earned as a consequence of the acts or misdemeanours. If this is impossible to apply, the maximum limit of the fine will be EUR2 million.
Penalties for very serious breaches
Very serious breaches are fined up to EUR20 million. Where the NMCC is competent to sanction the breach, the fine will normally be at least the gross profits earned from the offence, and can be up to five times this amount. Where this is impossible to apply, the maximum limit of the fine is EUR20 million. Very serious breaches may also involve being disqualified from providing electronic communications services and/or using the network for up to five years.
Members of administrative bodies that have intervened in the decisions concerned may incur sanctions of EUR5,000, EUR30,000 or EUR60,000, depending on the gravity of the infringement.
In addition to economic fines, other consequences of non-compliance might include sealing equipment or decommissioning facilities.
Minor breaches include producing unauthorised radio-electric emissions and communicating without an authorised station.
Serious breaches include installing radio-electric stations without permission or transmitting false or deceptive signals.
Very serious breaches include carrying out activities without permission or using the radio-electric public domain without a private assignment.
The relevant statutes of limitations for the different breaches are:
For minor breaches, one year.
For serious breaches, two years.
For very serious breaches, three years.
The NMCC, the Secretariat of State for Telecommunications and the Information Society and the Data Protection Agency all have authority to initiate a disciplinary procedure.
Sanction decisions of the National Market and Competition Commission (NMCC) can be appealed before the national high court. As an example, licence denials can be appealed before higher instances and then up to the national high court. However, if a decision was enacted by the President or the Council of the NMCC, it must be appealed to the administrative first instance court. The procedure is the same for Spanish Data Protection Agency decisions.
Resolutions and decisions from the Secretariat of State for Telecommunications and the Information Society under EUR60,000 can be appealed before the administrative central court. Otherwise, they must be appealed before the national high court.
The main ground of appeal is disagreement with the decision/resolution of the relevant administration. This can include arguments that the decision was not justified or it causes damage to an interested party.
Universal service obligations
According to Royal Decree 2296/2004, operators with significant market power have additional obligations including:
The obligation not to discriminate.
Separation of accounts.
Providing access to and use of resources to other operators.
Price control and cost accounting.
Operators may be asked to comply with certain universal service obligations, as described in the General Telecommunications Act. These cover a range of services provided to all users regardless of their geographic location, at a reasonable price and of a certain quality. The services are as follows:
Access for all end-users to a public fixed network.
Provision of a publicly available telephone service.
Making available a directory service to subscribers (either in hard or soft copy) which must be updated at least once a year.
Sufficient provision of public payphones or other means of public access to vocal telephony to ensure accessibility, quality and geographic coverage, as well as to guarantee free use of emergency services.
Access to the services described above by end-users with disabilities and special social needs.
Certain of the above services are mostly provided by Telefonica, with the costs divided between the main operators. The National Markets and Competition Commission (NMCC) decides which costs are borne by the major operators according to their income level.
As one of the conditions for the provision of electronic telecommunications services and/or exploitation of networks, both public and private entities that carry out activities in other sectors must establish a structural separation of the activities related to the provision of electronic communication services and/or network supply. This also applies where a public body participates in, or has control over, an operator that provides public electronic communications services or uses a network.
Even with all of the obligations and liabilities imposed on operators, effective competition cannot be guaranteed. The NMCC can force an operator with significant market power to establish functional separation of its business units.
Functional separation may also be done voluntarily, as long as the Ministry of Industry, Energy and Tourism, NMCC and the Ministry of Economy and Competitiveness are notified.
The conditions applicable to telecoms services are established in the General Telecommunications Act and its implementing regulations. In accordance with the principles of objectivity and proportionality, the government can amend the conditions after hearing the interested parties, the Council for Consumers and Users, and if applicable, any representative associations. It must also receive a report from the National Market Competition Commission. Any amendment must then be approved by Royal Decree and have a transitional period.
The General Telecommunications Act establishes a series of general principles covering all services to encourage effective competition, development of the economy and digital employment and technology neutrality. It also lays out other principles, depending on the service provided.
Network access, associated facilities and interconnection principles include, among others:
Establishing mutual interconnection and guaranteeing the provision of services and their interoperability.
Objectivity, proportionality, transparency and non-discrimination of established obligations and conditions.
Numbering services principles include, among others:
Objectivity, proportionality, transparency and non-discrimination in the procedures.
Transparency and non-discrimination against other operators.
Spectrum use principles include, among others:
Guaranteeing efficient use of the resource.
Encouraging neutral technology and services.
Encouraging competence in the electronic communications market.
More specific conditions are established by Royal Decree 424/2005 including:
Observing and complying with resolutions of the competitive bodies on urban planning, environment, and land management.
Allowing co-location and shared facility use where relevant.
Observing and complying with radio-electric and electromagnetic emissions provisions.
Maintaining network integrity and avoiding interference.
Guaranteeing the confidentiality of transmissions and secrecy of communications.
Complying with coverage provisions.
Guaranteeing free emergency calls.
Guaranteeing number portability.
Guarantees and obligations are applied according to the service provided by the operator. There are also minor obligations, such as directory enquires, caller identification and tone dialling.
Operators must also comply with other regulations on data protection, unfair competition, consumer protection, data retention, e-commerce (if applicable), and other general legal texts, such as the Civil or Commerce Code.
Under the Constitution, telecommunications are an exclusive competence of the state, shared with autonomous regions. In this sense, the state provides basic legislation and the autonomous regions carry out normative development, where allowed. Local communities do not have competence.
The General Telecommunications Act considers the radio-electric spectrum to belong in the public domain. It is strictly controlled by public authorities in order to guarantee its availability and efficient use through active protection and operators' collaboration.
The Ministry of Industry, Energy and Tourism (through the Secretariat of State for Telecommunications and the Information Society (SETSI)) is in charge of allocating spectrum use. The time frame for permission to be granted is six weeks from the date of submission, without prejudice to the particular guidelines for administrative concessions.
The SETSI will grant the right to use the spectrum through either general authorisation, individual authorisation or administrative concession. General and individual authorisations are granted for shared use of the frequency bands, with no limitation on the number of operators or users. There is a requirement for strict compliance with the technical conditions applicable to each particular use. Administrative concessions are designed for when frequency bands are used exclusively or by a limited number of operators (generally, mobile services are granted through public tender).
To apply for general authorisation, an application is made to the SETSI, following the procedure and requirements set by the Ministry of Industry, Energy and Tourism and on payment of a fee. For a private use, there is a so-called "individual authorisation" which is designed for use by radio amateurs with no economic content, or for self-provision. The process is similar (see above).
Administrative concessions are mainly aimed at operators. Prior to using the frequency bands, the operator must submit a technical project and allow the SETSI to inspect its facilities. Sometimes, when the purpose is to achieve an efficient and effective use of the spectrum, the Ministry of Industry, Energy and Tourism can limit the number of licences after hearing the interested parties. The spectrum will then be allocated through a tender process.
In addition, once the licence has been granted, technical requirements established in the National Frequency Allocation Table (CNAF) must be observed. This table allocates frequency bands to the radio communication services and determines the methodology of the Spanish radio spectrum. Therefore, only equipment that complies with the CNAF requirements can be used in Spain.
The General Telecommunications Act refers to the possibility to sell or sub-license the radio-electric public domain under conditions established by Royal Decree 863/2008 of 23 May.
Titles or licences for exclusive use of the domain can be transferred totally or partially. The public domain can also be sub-licensed under the General Telecommunications Act.
Infrastructure and network management
Following EU principles, telecommunications service providers can install their equipment in different locations, including third party sites. On a national basis, the concept of co-location is mentioned in the General Telecommunications Act, pointing to the possibility of co-location and encouraging public authorities to adopt measures to facilitate deployment such as co-location and/or facility sharing.
Co-location is a possibility rather than a right. The law places an obligation on operators to negotiate with each other and provides for the intervention of the National Markets and Competition Commission in case of disagreement.
Access and interconnection
Both the General Telecommunications Act and Royal Decree 424/2005 establish the right and, when required by other operators, the obligation to negotiate access between telecoms operators to make services available to the public.
The National Markets and Competition Commission (NMCC) can intervene in the negotiations when it is impossible to reach an agreement, and its decision is legally binding. Under Royal Decree 2296/2004, the NMCC can impose obligations on operators with significant market power about both wholesale and retail markets where there is no effective competition.
Operators of public electronic communications have the right and, when requested by other operators, the obligation to negotiate mutual interconnection. This is to ensure provision of electronic communications services to the public and guarantee their interoperability.
Interconnection is regulated under the General Telecommunications Act and in depth by Royal Decree 2296/2004. Previously, we need to separate regulated and non-regulated markets for a better understanding of price regulation. Therefore, the retail markets are considered to have effective competition in terms of operators and pricing, therefore there is no need for market pricing regulation. Previously, non-regulated and regulated markets were separated, meaning the retail markets are considered to have effective competition in terms of operators and pricing.
However, wholesale markets do have price regulation, since generally there is no effective competition among the wholesale market players. For example, Telefonica is considered to be an operator with significant market power in the fixed lines wholesale market. Every year, it has to issue a document with conditions and prices of elements, functions or infrastructures used for interconnection. This document is called the reference interconnection offer. The prices offered must be cost-oriented, but operators can improve their offer through negotiation. The reference interconnection offer must be approved by the National Markets and Competition Commission (NMCC).
Other markets have their own price regulations. For example, the reference offer for rented lines regulates wholesale services offered by Telefonica to other operators so they can connect their backbone network to the subscriber's household with guaranteed and symmetrical bandwidth. The subscriber loop offer regulates the negotiations between Telefonica and other operators for access to the subscriber loop. The content of both documents is similar to the reference interconnection offer.
The NMCC can intervene in negotiations between operators and any other third party either on request when negotiation disputes arise, or ex officio to encourage and guarantee interconnection, adequate access and interoperability. Further, the NMCC is allowed to order acceptance of an interconnection offer for those operators with significant market power. Any decision of the NMCC is legally binding.
Data protection and security
The main data protection regulations applicable to the telecoms sector are:
Act 9/2014, of 9 May, the General Telecommunications Act.
Act 15/1999, of 13 December, on Personal Data Protection.
Royal Decree 1720/2009, of 21 December, which develops the Personal Data Protection Act.
Act 25/2007, of 18 October, on Data Retention concerning Electronic and Public Networks Communications.
Act 34/2002, of 11 July, on Information Society Services and Electronic Commerce, which implements the cookies directive.
Royal Decree 428/1993, of 26 March, which approves the Statute of the Spanish Data Protection Agency.
Royal Decree 424/2005, of 15 April, approving the Regulation Concerning the Conditions for the Provisions of Electronic Communications services, Universal Service and Users Protection.
Regulation (EU) 611/2013, of 24 June, 2013, on the measures applicable to the notification of personal data breaches under Directive 2002/58/EC on privacy and electronic communications.
According to the General Telecommunications Act, any data retention or transfer matters are governed by the Data Retention Act, which confirms that electronic communications operators are subject to data retention. All operators including electronic communications services providers and those using public telecommunications networks must meet the requirements.
The types of data to be retained as classified includes data:
Needed to trace and identify the origin of the communication.
Needed to trace and identify the destination.
Needed to determine day, time and duration of the communication.
On the type of communication.
On the type of device used.
On the geo-positioning of a device.
Unsuccessfully placed calls are excluded from the Data Retention Act.
Data must be retained for 12 months after the date the communication took place. This can be extended to a maximum of two years or reduced to a minimum of six months according to the cost of storage and data retention, and the interest in it for the purposes of investigation, detection and prosecution of serious crimes. This is without prejudice to the obligation to retain blocked data under the Data Protection Act.
Operators providing electronic communications services or using communications networks must guarantee the confidentiality of communications in accordance with the Constitution by adopting any necessary technical measures.
However, operators are required to carry out authorised interceptions under the General Telecommunications Law and under the procedural rules established in Royal Decree 424/2005 in connection with the following legislation:
Criminal Procedure Act.
Act 2/2002, of May 6, regarding the previous judicial control of the National Intelligence Centre.
Other implementing regulations.
The authorities can allow or arrange interception of communications when there is evidence suggesting that an individual is carrying out criminal activities, and the interception will help to determine guilt or verify circumstances of criminality.
Interception of telecommunications cannot be used for the public in general and any disclosure of content, without judicial authorisation, is considered to be an infringement of the General Telecommunications Act. The gravity and penalty for the offence will depend on the breach (see Question 6). In addition to any administrative fine, the penalty can also be a criminal punishment.
According to the General Telecommunications Act, operators must adopt technical and procedural measures to guarantee adequate security levels when they provide electronic communications services and/or use a network. For example, and particularly with regard to personal data protection, these measures can consist of access restricted to authorised personnel only, or application of a security policy on data handling.
Operators are also required to manage security risks that can affect their network or service provision to minimise or avoid any security breaches and guarantee the integrity and continuity of service. Any events with serious impact on service provision or network use must be notified to the Ministry of Industry, Energy and Tourism.
Any type of information transmitted through electronic communications networks can be encrypted. However there is an obligation to provide any algorithms or other encryption processes used to protect communications to the competent authorities (see Question 16).
There are several different types of charges relating to telecommunications:
The general operator charge, paid annually.
Telephone numbering charges (if numbering is requested).
Charges for reservation of the radio domain (if use of the radio domain is requested).
Telecommunications charges (if technical evaluation of infrastructure, equipment or devices is requested).
Telephone numbering charges are applied when allocating numbering blocks or numbers to one or more persons or entities. The amount of the charge is calculated by multiplying the amount of numbers, addresses or names allocated by the value given to each one (which will vary in most cases depending on the type of service to be provided).
With regard to price control measures, a distinction must be made between retail services (carried out between operators and users) and wholesale services (provided among operators). For retail services, there is no regulation of pricing, so operators are free to set them. However, the National Market and Competition Commission (NMCC) has power to set prices for a dominant or significant market player when the market requires, or review prices if there are signs of abuse, or if consumers are negatively affected.
The NMCC controls the pricing for wholesale services,. Under the General Telecommunication Act, the NMCC can impose on operators with significant market power obligations in terms of price control (such as price fixing and cost-oriented prices) to ensure competition between operators. The wholesale markets of origination and termination are examples of regulated markets in Spain.
The reference interconnection offer or the reference offer of rented lines (see Question 14) are the most notable examples of price regulation in telecommunication services.
Telephone number and subscriber management
Telecommunication numbering is a limited public resource used to identify users and telecommunication services. Spanish regulation tries to ensure transparent and non-discriminatory access to this resource. The General Telecommunications Act and its implementing regulations provide the legal framework.
The characteristics, organisation and structure of the public resources and the assignment of the range for each service are established by the National Numbering Plan. The Ministry of Industry, Energy and Tourism is in charge of developing the National Numbering Plan, which is then approved by the government. The competent body for managing and controlling the plan is the National Market and Competition Commission (NMCC). The Secretariat of State for Telecommunications and the Information Society (SETSI) is in charge of issuing resolutions on allocation and assignment of resources by the Ministry of Industry, Energy and Tourism.
The plan is characterised by being "closed" to nine digits, meaning that users must always dial nine digits, regardless of their location. For landlines, the plan uses provincial indicators at the beginning of the number, in the first two or three digits.
There are different kinds of numbering depending on the service provided, such as mobile services, "intelligent numbers", short numbers, short message numbers or nomadic vocal services. The numbering plan is flexible and the SETSI is empowered to open new ranges of numbering depending on existing needs. As an example, due to the shortage of traditional mobile numbers beginning with a 6, the SETSI opened a new range of mobile numbers starting with a 7.
According to Royal Decree 2296/2004, numbers:
Must be used for the particular purpose specified in the application.
Must remain under the holder's control who must keep a record of its use.
Cannot be the object of commercial transactions.
Must be used efficiently within 12 months of assignment.
Once the process is complete, a fee must be paid for the right to use the number.
The General Telecommunications Act regulates universal service obligations, which include, among others, directory enquiries and emergency services. Access to these must be provided in compliance with certain quality levels and at an affordable price. Given the importance of the emergency services, the operators must use all available means to guarantee non-interruption.
The government regulates and establishes by Royal Decree (in this case Royal Decree 424/2005) terms and conditions for providing and guaranteeing universal service, which includes emergency services and directory enquiries.
Certain operators must ensure and guarantee free calling of emergency services through telephone number 112, and any other numbers established by Royal Decree.
Only the following operators must provide the above service:
Those who use public electronic communication networks.
Those who provide telephonic access available to the public.
Mobile services operators, and some Voice over IP operators with assigned numbering.
Other universal services, such as directory enquires, which gives general information about subscribers' numbers and is updated at least once a year, are provided by Royal Decree.
In general terms, the interests and rights of customers are protected by Act 1/2007 of 16 November, on Consumer and User Protection, and Royal Decree 899/2009 of 22 May, which approved the charter of users' rights, as well as by the General Telecommunications Act.
It is worth noting the following legal texts:
Order ITC/1030/2007, which regulates the procedure for resolving claims disputes between final users and operators of electronic communications services and customer service for operators.
Order ITC/308/2008, which establishes instructions for the use of public numbering resources providing short messaging services and multimedia messaging services.
Telecommunications Market Commission newsletter 1/2009, which introduces verbal consent with third party verification when contracting wholesaler services regulated by fixed communications, as well as the details for numbering retention.
Telecommunications Market Commission newsletter 1/2008 and its modification, 3/2009, regarding number portability.
Resolution of July 8, 2009 of the Secretariat of State for Telecommunications and the Information Society, which modifies the code of conduct for the provision of premium rate services of 23 July 2004.
Act 3/1991, of January 10, on Unfair Competition.
Spanish regulation does not mention nuisance and silent calls but refers to automatic calls without human intervention, which are classified as prohibited by the General Telecommunications Act and Royal Decree 424/2005.
The General Telecommunications Act specifically regulates complaint handling and number portability, which also appears in Royal Decree 2296/2004.
The General Telecommunications Act establishes some contractual obligations for operators that use networks and/or provide telephone services available to the public. For instance, operators have to provide at least the following information contained in Act 1/2007, on Consumer Protection:
A description of the services and possible use limitations.
The applicable prices and tariffs.
The duration of the contract.
Any established restrictions on use of the terminal.
The number conservation conditions.
Royal Decree 899/2009 of 22 May, approving the charter of users' rights of the electronic communications user establishes certain rights favouring users in their contractual relationships. This includes, among others, information requirements (effective, sufficient, verified and transparent), operator change procedures, contractual modifications and contents.
There are no restrictions on the use of Voice over IP, although where specific numbering is requested certain requirements and limitations apply.
Voice over IP services are generally known in Spain as "nomadic vocal services". The reference to "nomadic" is based on the fact that the services are offered from access points to which subscribers may connect from any location (as long as the necessary means are available). This is the main element differentiating Voice over IP services from publicly available telephone services (PATS), where the access points coincide with network termination points.
The Secretariat of State for Telecommunications and the Information Society published a Resolution on 30 June 2005, defining Voice over IP services as "Publicly available electronic communication services which offer bi-directional vocal communications in real time from access points to which subscribers can connect by remote and allow both the call set-up and its reception, being able to include other capacities, such as multimedia communication".
Based on that resolution a new numbering range under the National Numbering Plan for this technology was introduced, in three different categories:
Geographical numbering with the number identifying the network termination point starting with a 9.
Geographical numbering with the number identifying some geographic association starting with an 8.
Non-geographical numbering, that is, a specific numbering range for nomadic services, starting with 51.
As soon as the Voice over IP services provider acquires Spanish numbering, where so needed, the obligations attached to it will be binding. In particular, emergency call duties, with some limitations, will apply. Portability is not permitted and the user has no right to appear in phone directories. In any event, it must be clear to the subscriber that nomadic vocal services are different from PATS and what the limitations are.
Where Voice over IP services do not have the above numbering, the relevant operator, among others, will not be able to offer its subscribers to receive incoming calls from PATS numbers.
The European Commission has cleared some rules on the net neutrality principle, which establishes equal treatment for all network traffic whatever its type or origin. While the EU has stated that access to any online content and/or services must suffer no discrimination or interference (like blocking or slowing down) from internet access providers, there is no specific regulation in Spain and opinions differ. Even so, the General Telecommunications Act declares that the neutrality principle must be respected when installing and using public networks and providing electronic communications services to third parties by operators controlled by public authorities. Discussions on the issue are ongoing.
Technological neutrality appears, with regard to spectrum, to be a guiding principle under the General Telecommunications Act.
Outsourcing and telecommunications
Currently there are many suppliers using system integration to improve operational efficiency. Although it depends on the particular case, major telecoms sector companies are reluctant to appoint a single provider to supply and manage all their communications needs.
It is usually up to the information technology and strategy departments to decide whether to outsource or not. In theory, the reason for outsourcing is to let the operator focus on its business activity and promote offers and services to its clients. The other reason is economic and the financial issue is decisive in most cases.
There has been a trend over the last few months to insource specific services. For example, Vodafone brought certain call centre services from Latin America back to Spain.
Telecoms operators in Spain have outsourced services not included in their business plans but which have high value and human capital. Outsourcing is influenced by different technologies, depending on the business strategy of the company.
The following types of outsourcing are common:
Cloud computing, which relies on sharing computer resources as opposed to local servers.
Network management refers to a company whose internal network is managed by another.
Big data refers to a system which uses a large amount of data.
"Bring your own device" which is a policy that permits employees to use their own devices instead of providing company equipment.
Unified communication means integrated communications to optimise business processes and increase user productivity.
Some of the relevant contractual issues in a typical telecommunication outsourcing transaction in Spain are as follows:
Human resources/labour law requirements.
Security conditions (for example, network integrity and security breaches).
Mandatory regulatory and legal duties such as service quality and consumer protection requirements.
Change management and change control procedures.
Operational management of third party contracts.
Equipment and software.
Human resources transfer.
Key performance indicators.
Due diligence or the possibility of post contract verification.
Term (no maximum or minimum term is generally established, although competition legislation sets out that when a party has a dominant position and the agreement is signed on an exclusive basis, the term must not exceed a certain term).
Step-in procedures (allowing the client to take control of the service in the case of general breach of the agreement by the supplier).
Auditing process (allowing the client to have access to the supplier's facilities or to interview the supplier's personnel related to the service).
Norman Heckh, Partner
Ramón y Cajal Abogados
Bachelor at Law, Universidad San Pablo CEU.
Master's in Business Law, from the Garrigues Formation Centre (Madrid).
Diploma in Telecommunications Law, Grupo Recoletos.
Certified Information Privacy Professional/Europe: IAPP.
Certified Data Privacy Professional: ISMS Forum.
Arbitrator in the IT and Teleccommunications section of the Arbitration Court of the Cámara de Comercio e Industria in Madrid.
Recognised as a leading IT & Communications lawyer by the international legal directories Chambers Europe, Legal500 and Best Lawyers.
Areas of practice. Information technology and communications; data protection
Acting for Net Entertainment (world-leading gaming supplier) in the obtaining of online gaming licences and related legal and regulatory work.
Advising Telefónica in the acquisition of 56% of Canal+, the biggest pay TV operator in Spain and the post-closing thereof.
Advising Ericsson in a large and complex privacy assessment review.
Acting for Iberia Express (subsidiary of Iberia-IAG) in IT, e-commerce, privacy and commercial advisory services.
Advising Mondelēz in commercial and consumer law, e-commerce, IT, data protection, IP, and so on.
Advising La Nevera Roja (Rocket Internet Group), the take away food internet leader, in privacy, commercial, unfair competition, trademark, IT, IP, and e-commerce law issues.
Languages. Spanish, English, German
Madrid Bar Association (Ilustre Colegio de Abogados de Madrid).
Member of IBA, IAPP, DENAE, and APEP.
Co-author of E-Commerce Practice Manual published by Practical Law and Telecommunications Law in Europe, as well as the audiovisual industry Regulatory Notebook published by AUTELSI.
Co-ordinator and author of Memento Experto en Protección de Datos, published by Francis Lefebvre.
Co-author of Corporate Internal Investigations published by C. H. Beck oHG.