EC Recommendation on Relevant Markets: key competition safeguards maintained; national regulators must remain vigilant to avoid detriment to end-users
Yesterday the European Commission adopted its revised Recommendation on Relevant Markets Susceptible to Ex-Ante Regulation. This Recommendation lists the telecoms markets to be examined by National Regulatory Authorities (NRAs), with a view to deciding whether a market is effectively competitive or needs regulation in order to enable competition.
ECTA takes note that the Commission decided to withdraw markets 1 and 2, concerning the retail market for access to the public telephone network at a fixed location and the wholesale market for fixed call origination.
While ECTA shares the Commission’s opinion that the transition to Voice over IP is happening, ECTA is still of the view, which has also been expressed by BEREC in its formal Opinion, that removing those markets from the list is premature, taking into account that only 3 Member States have found their markets to be sufficiently competitive to deregulate them. We are however reassured by the improvements made to the original draft, and we trust that NRAs will use the flexibility provided by the adopted text to maintain wholesale obligations on dominant operators (wholesale line rental and carrier (pre)selection and IP-based equivalents) until the fixed voice markets become genuinely competitive.
ECTA is pleased to see that physical access – the enabler of the best form of competition, driving innovation and investments as well as consumer benefits – remains the rule and is complemented by virtual access in circumstances where physical access is not feasible and only under specific conditions. Indeed, in the Explanatory note, the European Commission states that it is expected that NRAs will continue mandating physical unbundling in market 3a, because it is usually considered to be the most adequate access remedy, as it ensures alternative operators’ ability to differentiate their retail offers and innovate. The Commission adds that in situations where physical unbundling is not technically or economically feasible, NRAs may mandate virtual access products (as some NRAs have already done), without prejudice to future technological developments which may allow physical unbundling under appropriate conditions.
ECTA also welcomes the recognition of business end-users’ distinct needs and the addition of a high quality market that could boost the productivity and efficiency of European companies.
Encouraged by the declaration of Vice-President Kroes calling for a higher level of competition on telecom markets, ECTA members now look forward to work with the incoming Commission in order to strengthen this vision, for the benefit of end-users.
