Preliminary assessment of the third payment request of Romania (2024)

its Decision 1357/25.05.2023 modifying License no. 1085 for the commercial exploitation of capacities for the production of electricity and heat in cogeneration, granted to the operator CE Oltenia, the National Energy Regulator (ANRE) specifies 1 June 2023 until 31 December 2025 as the period during which Unit No. 7 from the Turceni Thermal Power Plant remains in conservation status. […] and can be activated and called to produce only in the specific circumstances laid down in Article 4 of the Decarbonisation Law and in full compliance with relevant EU law, including State aid rules. Ministerial Order No. 326/2024 issued by the Ministry of Energy on the activation of mothballed energy production capacity specifies the rules and procedures for the reactivation of mothballed electricity generation capacity at Unit No. 7 from the Turceni Thermal Power Plant. The rules regulate the conditions for reactivation in line with Article 4 of the Decarbonisation Law, i.e., the plant shall be kept in conservation and be reactivated only if the transmission system operator is likely to exhaust its balancing resources, and in compliance with relevant EU law, including State aid rules. The annex to the Ministerial Order specifies that the identification of electricity shortages that justify the reactivation in line with the specified procedures is based either on a European Resource Adequacy Assessment (ERAA) or a National Resource Adequacy Assessment in line with the ERAA. Commission Preliminary Assessment: Satisfactorily fulfilled  Related Measure: Transition to EU 2025 connectivity targets and stimulate Number: 148 private investment for the deployment of very high-capacity networks Name of the Milestone: Recommendations from the EU connectivity toolbox are implemented Qualitative Indicator: N/A Time: Q3 2022 Context: Milestone #148 is part of reform C7.R2, which aims to accelerate the national roll-out of 5G networks, in accordance with security regulations, and provide broadband coverage for white areas (small rural municipalities, isolated localities, disadvantaged inhabited areas), tackling the rural – urban digital divide, reducing the administrative burden and streamlining procedures and fees, creating the prerequisites for equal access to digital services and internet access. Milestone #148 requires the implementation of 12 out of 39 recommendations from the EU Connectivity Toolbox. Milestone #148 is the reform’s third milestone, and it follows the completion of milestone #146 for the entry into force of the 5G network security law, positively assessed in the context of Romania’s first payment request, and milestone #147 for the publication of the call for tender for the authorisation of telecommunications operators to grant 5G licenses, positively assessed in the context of Romania’s second payment request. Milestone #149 which is also included under this payment request calls for the assignment of the rights of use of radio spectrum and is the last step in the implementation of this reform. Evidence provided: The following evidence was provided: i. Summary document duly justifying how the milestone (including the relevant elements of the milestone, as listed in the description of milestone and of the corresponding measure in the Council Implementing Decision annex) was satisfactorily fulfilled; ii. Common Union Toolbox for Connectivity (hereinafter, ‘EU Connectivity Toolbox’): https://digital-strategy.ec.europa.eu/en/policies/connectivity-toolbox; iii. The draft roadmap on the implementation at national level of the Common Toolkit for Connectivity (‘the roadmap’) and the identical roadmap adopted by Government Memorandum on 10 November 2021 iv. Government Decision No. 1139/2022 on establishing the amount of the minimum license fee for the granting of rights to use the radio frequencies available in the radio frequency bands 703-733 MHz/758-788 MHz, 738-753 MHz, 1452-1492 MHz, 2550-2570 MHz/2670- 2690 MHz and 3400-3800 MHz published in the Official Journal No. 906 on 14 September 2022. v. Draft decision establishing the minimum amount of the license fee for granting rights of use of radio frequencies available in the 700 MHz, 1500 MHz, 2600 MHz and 3400-3800 MHz bands, as well as the conditions for payment of the license fee, submitted for public consultation from 13 to 27 July 2022: https://www.ancom.ro/uploads/forms_files/Proiect_HG_taxa_de_licenta1657713059.pdf; vi. Results of the competitive selection procedure for awarding usage rights for the spectrum resources available in the 800 MHz, 2600 MHz and 3400-3600 MHz bands was launched on 11 October 2021: https://www.ancom.ro/en/licita539ia-din-acest-an-pentru-alocarea-de- spectru-s-a-finalizat_6392;  vii. Link to the notice on the organisation of the competitive selection procedure for granting rights of use for radio frequencies in the 700 MHz, 1500 MHz, 2600 MHz and 3400-3800 MHz bands (the “5G” radio frequencies) published on the website of the National Authority for Administration and Regulation in Communications (hereinafter ‘ANCOM’), on 19 September 2022: https://www.ancom.ro/anunt-pentru-organizarea-procedurii-de-selectie- competitiva-n-vederea-acordarii-drepturilor-de-utilizare-a-frecventelor-radio-n-benzile-de- 800-mhz-1800-mhz-537i-2600-mh_6648; viii. Link to the results of the spectrum auction for granting rights of use for radio frequencies in the 700 MHz, 1500 MHz, 2600 MHz and 3400-3800 MHz bands (the “5G” radio frequencies) published on the website of ANCOM, on 15 November 2022: https://www.ancom.ro/licitatia-de-spectru-din-acest-an-s-a-finalizat_6706; ix. Conclusions from ANCOM public consultation to assess interest in the 26 GHz band: https://www.ancom.ro/uploads/forms_files/Chestionar_banda_26_GHz_sinteza_raspunsuri 1664537050.pdf; x. Decision No. 645 amending Decision No. 551/2012 of the ANCOM president on the setting of the rate for the use of the spectrum published in Official Journal No. 914 on 16 September 2022; xi. Explanatory note to ANCOM Decision No. 645/2022: https://www.ancom.ro/uploads/forms_files/Referat_de_aprobare_Decizia_ANCOM_645_20 221663661258.pdf; xii. Page on 5G technology on ANCOM’s website: https://infocentru.ancom.ro/tehnologia-5g-2/ xiii. Elements published on the National Institute of Public Health’s website: https://insp.gov.ro/cnmrmc/expunerea-la-campurile-electromagnetice/; xiv. Links to press releases promoting the website www.monitor-emf.ro: https://www.ancom.ro/en/aisemnal-monitor-emf-and-netograf-digital-tools-exhibited-by- ancom-at-gotech-world-2022_6703 and https://www.ancom.ro/en/ancoms-spectrum- monitoring-equipment-at-the-bsda-international-exhibition-and-conference_6544; xv. Links to ANCOM social media channel promoting the website www.monitor-emf.ro: https://www.facebook.com/ancom.ro/posts/pfbid02fDwCaKAz7iBFBk48ZWCrDoi1KqzGts2z nDHhPN4RTbq2wJuqXJokYbxfSoqvFG5Tl xvi. Joint Order No. 2371 signed by the MDLPA, ANCOM and the MCID for the approval of the technical regulation “channelling telecommunications (CTc). Optical fibre. Design, execution, use, Maintenance and Verification, RTC Indicator 5- 2022” published in Official Journal No. 935 on 23 September 2022; xvii. Evidence of a dedicated section on infrastructure law on ANCOM’s webpage: https://www.ancom.ro/legea-infrastructurii_4938; xviii. Link to a booklet providing information material on the authorisation of the construction of electronic communication networks: https://www.ancom.ro/uploads/links_files/Ghid_UAT_Autorizare_Sanctiuni.pdf; xix. Single Information point on planned civil works: https://edirect.e-guvernare.ro/; xx. Government Decision No. 376/2020 approving the national table for the allocation of radio spectrum bands published in Official Journal No. 427 on 21 May 2020; xxi. Decision No. 111 of 23 February 2024 issued by ANCOM and published in Official Journal No. 183 on 6 March 2024 approving the National Table for the Assignment of Radio Frequency Bands;Memorandum approving the financing contract for a fund for digitalisation, climate action and other areas of interest; xxii. Position Paper on awarding rights to use the radio frequencies available in the frequency bands 694-790 MHz, 790-862 MHz, 1427- 1517 MHz, 2500-2690 MHz, 3400-3800 MHz and 24.25-27.5 GHz: https: //www.ancom.ro/uploads/forms_files/Pozitie_acordare_spectru_700_800_1500_2600_MH z_3,4-3,8_GHz_26_GHz_31_01_20191549011953.pdf; xxiii. Terms of Reference for the organization of the competitive selection procedure for awarding frequency usage rights in the 700 MHz, 800 MHz, 1500 MHz, 2600 MHz and 3400-3800 MHz bands: https://www.ancom.ro/uploads/forms_files/CAIET_SARCINI_LICITATIE_20191564493717.pd f; xxiv. Email sent by ANCOM to the attention of the administrative territorial units informing them of the publication of the booklet providing information material on the authorisation of the construction of electronic communication networks (document xviii) on 17 October 2022. Analysis: The justification and substantiating evidence provided by the Romanian authorities cover all constitutive elements of the milestone. As per the draft roadmap currently under analysis between relevant ministries, Romania shall implement for 12 out of 39 recommendations [from the EU Connectivity Toolbox] (...) All shall be finalised in 2022: The draft roadmap sent to Romania by the Commission on 2021 is identical to the roadmap adopted by Government memorandum on 10 November 2021. i. 24 – Promote adequate reserve prices Recommendation 24 of the EU Connectivity Toolbox invites Member States to set spectrum reserve prices (the minimum amount paid for spectrum sold at auctions) by using a methodology, financial valuation models and/or other models. The roadmap does not define any additional actions for the fulfilment of this recommendation. The roadmap (page 37) specifies that the National Authority for Administration and Regulation in Communications (ANCOM) deemed that the draft Government Decision on setting the amount of the minimum licence fee for granting frequency usage rights, as well as the payment conditions for the licence fees, submitted to public consultation met all the best practice aspects identified in the toolbox. Government Decision No. 1139/2022 establishing the minimum amount of the license fee for the granting of rights to use the radio frequencies available in the radio frequency bands 703-733 MHz/758-788 MHz, 738-753 MHz, 1452-1492 MHz, 2550-2570 MHz/2670-2690 MHz and 3400-3800 MHz was published in Official Journal No. 906 on 14 September 2022 and entered into force on the same day, in accordance with the provisions in Article 12(3) of Law No. 24/2000 on Legislative technique. This Government Decision therefore sets spectrum reserve prices by setting the minimum amount that must be paid at auctions for spectrum (i.e., radio frequencies). The draft Government Decision was submitted for public consultation from 13 to 27 July 2022 (document 5). The following changes were made to the decision following the public consultation, none of which change the foreseen spectrum reserve prices: • Licence duration in 700 MHz, 1500 MHz and 3400 – 3800 MHz bands extended by 5 years, from 20 to 25 years long; • Introduction of a 6th instalment in 2026, for the licences in 700 MHz and 1500 MHz bands and introduction of a 4th instalment in 2027, for the licences in 3400 – 3500 MHz band; subsequent reduction of the amount for certain instalments; • Elimination of execution bonds to guarantee future payments. Given that Government Decision No. 1139/2022 entered into force on 14 September 2022, the requirement in the description of the milestone according to which the recommendation must be finalised in 2022 is fulfiled. 25 – Timely availability of 5G harmonised bands Recommendation 25 of the EU Connectivity Toolbox calls for Member States to make a substantial part of the 5G harmonised bands (700 MHz 3.6 GHz and 26 GHz) available for wireless broadband networks as soon as possible. The roadmap (document iii) required ANCOM to ensure that the harmonised frequency bands would be made available in two stages by organising two distinct selection procedures, one to award the available spectrum in bands where frequency resources were not fully used (indicating that the 800 MHz, 2600 MHz and 3400-3600 MHz frequency bands had available spectrum), for a shorter period, and another selection procedure, to award frequency usage rights in the bands newly harmonized for 5G at European level, for longer periods, in accordance with the provisions of the draft law for transposing into national legislation the European Electronic Communications Code. The first selection procedure to award usage rights for spectrum resources available in the 800 MHz, 2600 MHz and 3400-3600 MHz bands was launched on 11 October 2021 and the results from the auction were communicated on 22 November 2021 (document vi). The results of the selection procedure indicate that two bids were awarded and that usage rights were awarded till 2029 and 2025 respectively. The notice for the organisation of the second selection procedure to grant rights of use for radio frequencies in the 700 MHz, 1500 MHz, 2600 MHz and 3400-3800 MHz bands (the “5G” radio frequencies) was published on 19 September 2022 on ANCOM’s website (document vii). The results of the auction were published on 15 November 2022 (document viii). According to the auction results, the rights in the 700 MHz and 1500 MHz bands are granted for 25 years from 1 January 2023. The rights in the 3400-3800 MHz band are granted for 22 years from 1 January 2026. The rights in the 2600 MHz band are granted from 1 January 2023 to 5 April 2029. As required by the roadmap, the 5G harmonised bands are therefore awarded for a longer time period. Romania finalised this recommendation on 22 November 2021, with the publication of the results from the auction, in line with the requirement in the milestone description that all recommendations shall be finalised in 2022 and the text in the milestone description indicating that this recommendation is expected to be finalised by 2022. 28 – Individual authorisation regime for the 24,25-27,5GHz frequency band Recommendation 28 of the EU Connectivity Toolbox encourages Member States to promote the flexible authorisation of the 26 GHz band, with a focus on local licensing and infrastructure sharing. As indicated in the Toolbox, the 26 GHz band contains a spectrum of 3, 250 MHz ranging from 24.25 to 27.5GHz (see document 2, page 33). The roadmap (document iii) required ANCOM to organise a public consultation to assess the interest in the 26 GHz band and options for the optimal use of spectrum in this band by end 2021, with a view to assessing whether this band should be included in the selection procedure to be organised in 2022. From 30 August to 16 September 2022, ANCOM conducted a preliminary public consultation on the appropriateness of granting rights of use for frequencies in the 26 GHz band. In this context, ANCOM circulated a questionnaire to identify the degree of interest in the use of the 26 GHz band for the provision of public networks and broadband electronic communications services. The conclusions indicate that “it is not appropriate to organise a selection procedure in the 26 GHz band in the short term (2023-2025 period), as evidenced by most of the contributions, and a new consultation on this subject is needed in the coming years” (document ix). Given that ANCOM conducted a preliminary public consultation from 30 August to 16 September 2022 on the appropriateness of granting rights of use for frequencies in the 26 GHz band in 2022, the requirement in the milestone description according to which the recommendation must be finalised in 2022 can be deemed fulfilled. 31 – Structure of recurrent spectrum fees to incentivise roll-out Recommendation 31 of the EU Connectivity Toolbox encourages Member States to assess whether the recurrent spectrum fee structure could penalise the rollout and densification of the 5G networks and if so to adjust the spectrum fee structure. The roadmap (document iii) required ANCOM to modify its Decision No. 551/2012 setting the fee for spectrum usage in a way that does not affect the elements from the original decision that incentivise increased coverage, namely the fact that the spectrum fees are independent from the number of base stations on the network. ANCOM Decision No. 645/2022 amending Decision No. 551/2012 was published in Official Journal No. 914 on 16 September 2022 and entered into force on 1 January 2023, in accordance with its Article 2 (document x). Decision No. 645/2022 updates the value of the fees for spectrum usage. The new fees do not penalise roll-out and densification, in line with the connectivity toolbox recommendation, since they are set independ