Article 17 - Right to property
Key facts of the case:
Borderlight Ltd. delivers communications services (data connections) to various healthcare and medical service functions in Uppsala municipality and county council. The activities in question are located in premises owned by Uppsalahem Ltd, a public housing company that owns a large number of properties in Uppsala municipality. Previously, Borderlight has had delivery agreements with Uppsalahem on the right to use the fiber pipelines for broadband services in Uppsalahem's own properties.
The fiber pipelines in the buildings are currently owned by Uppsalahem and are so-called black fiber, i.e. a physical fiber cord without any electronic equipment. In order to provide broadband services to end customers, an operator, like Borderlight, needs to ensure connections between their own network and the access network leading to the end customer. If the operators do not have access to their own infrastructure, they may purchase an electronic communications service in the form of a wholesale product by another operator. Infrastructure-based wholesalers for electronic communications have different degree of processing.
After a procurement in 2012, Uppsalahem has exclusively contracted Telenor Sverige Ltd as communications operator[1] for its entire property portfolio. Telenor generally does not offer services directly to end users. Instead, operators (service providers) may enter into an agreement with Telenor to provide services - eg. internet access, telephony or ip tv - to end users through Telenor's active equipment. Telenor gives service providers access at the bitstream level to the active network established by Telenor. This communications operator model means that end users in Uppsala's property network can choose between different service providers ("open network").
After the contract entered into force in 2012, Uppsalahem terminated the previously entered agreement with Borderlight regarding the right to use the fiber pipelines. This agreement was formally terminated in June 2014. Uppsalahem has accepted that Borderlight Ltd. continues to have the right to the property network until the matter in the case is settled.
In October 2014 and in March 2015, Borderlight Ltd. applied that the Swedish Post and Telecom Authority (Post- och telestyrelsen, PTS) should order Uppsalahem and/or Telenor to provide joint utilisation of the fiber pipelines in certain properties of Uppsalahem, which housed healthcare centres and preschools.
In March 2016, the Post and Telecom Authority decided to reject Borderlights’ applications, mainly because the authority considered that Telenor had such rights to the current fiber pipelines that Telenor must be considered to have disposition over them.
Borderlight Ltd. appealed this decision to the Administrative Court in Stockholm (Förvaltningsdomstolen i Stockholm), which rejected the appeal stating that it was doubtful whether the purpose of the Act on electronic communications (Lag [2003:389] om elektronisk kommunikation)[2] was that the Post and Telecom Authority should intervene to safeguard the interests of such actors who themselves should be able to make the necessary decisions regarding the availability of the property network.
Subsequently, Borderlight Ltd. appealed to the Administrative Court of Appeal in Stockholm (Kammarrätten i Stockholm).
[1] This means that Telenor installs, operates and monitors the active equipment required for electronic communications services to be provided in Uppsala's physical network.
[2] Sweden, Act on electronic communications (Lag [2003:389] om elektronisk kommunikation), 12 June 2003, available at: https://www.riksdagen.se/sv/dokument-lagar/dokument/svensk-forfattningssamling/lag-2003389-om-elektronisk-kommunikation_sfs-2003-389
Key legal question raised by the Court:
The case concerns whether Uppsalahem (a property owner and landowner) and/or Telenor (the contracted communications operator for the properties in question) must provide Borderlight (another communications company) joint utilisation of certain wires in the fiber networks found in buildings owned by Uppsalahem where Telenor has been appointed as a communications operator.
Outcome of the case:
The provisions of the Act on electronic communications focuses on allowing competition in the market for the sake of the end users, not for an individual operator. The fact that Borderlight needs access to black fiber in order to comply with its civil-law agreements – to provide internet services to certain healthcare centres and preschools – which it entered into after a public procurement cannot by itself constitute grounds to order a joint utilisation of the fiber pipelines. In summary, the Administrative Court of Appeal considered that the Post and Telecom Authority has had ground for its decision not to order Uppsalahem and/or Telenor to provide Borderlight Ltd. with joint utilisation of the fiber pipelines in question. The appeal was therefore rejected.
Since all pipelines inside buildings usually constitute part of the property if they are owned by the property owner, the now proposed provision means that property owners' constitutionally-based right to protection of property under chapter 2, section 15 of the Instrument of Government and the right to protection of property following of Article 17 of the EU Charter of Fundamental Rights are affected in cases where the provision prevents the property owner from freely disposing of the fibre pipelines. In accordance with Article 8 (5) (c) of the Framework Directive and the fifth paragraph of Article 12 of the Framework Directive, national regulatory authorities shall apply objective, transparent, non-discriminatory and proportionate regulatory principles, inter alia by protecting competition in favour of the end-consumers and, where possible, promoting infrastructure-based competition. This means that the provision should only be applied after careful consideration. The fact that the proposed provision to a limited extent infringes the right to protection of property is then justified in view of the expected societal benefit in terms of better and more affordable services to end-users as the improved competition will lead to. Furthermore, the principle of proportionality in the Act on electronic communications may be considered to be imposed first if the possibility of voluntary agreements is exhausted. The starting point, as with the provisions on co-location and shared use mentioned in chapter 4, section 14 of the Act on electronic communications, is that the joint utilisation of property or other things, in the first place, shall be promoted on the basis of voluntary agreements.
Eftersom ledningar inuti byggnader normalt utgör fast egendom om de ägs av fastighetsägaren innebär den nu föreslagna bestämmelsen att fastighetsägares grundlagsfästa egendomsskydd enligt 2 kap. 15 § regeringsformen och egendomsskyddet enligt artikel 17 i EU:s stadga om de grundläggande rättigheterna påverkas i de fall bestämmelsen medför att fastighetsägarens möjlighet att fritt disponera ledningarna begränsas. I enlighet med artikel 8.5 c i ramdirektivet och femte punkten i artikel 12 i ramdirektivet ska de nationella regleringsmyndigheterna tillämpa objektiva, öppna, icke-diskriminerande och proportionella regleringsprinciper bl.a. genom att skydda konkurrensen till förmån för konsumenterna och, när så är möjligt, främja infrastrukturbaserad konkurrens. Det sagda innebär att bestämmelsen bör tillämpas först efter noggrant övervägande. Att den föreslagna bestämmelsen i begränsad omfattning inkräktar på egendomsskyddet är då motiverat med hänsyn till den förväntade samhällsnyttan i form av bättre och mer prisvärda tjänster till slutanvändare som förbättrad konkurrens medför. Av proportionalitetsprincipen i LEK får vidare anses följa att förpliktelser bör åläggas först om möjligheten till frivilliga överenskommelser är uttömd. Utgångspunkten bör, liksom beträffande bestämmelserna om samlokalisering och gemensamt utnyttjande i 4 kap. 14 § LEK, vara att gemensamt utnyttjande av egendom eller annat i första hand ska främjas på grundval av frivilliga överenskommelser.
