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IP/06/1439

Brussels, 20 October 2006

Picture of competition in EU telecoms now virtually complete

With its letter dated 19 October 2006 to the Greek telecom regulator (EETT), the Commission has, as of today, assessed 500 notifications from Member States reviewing competition in their electronic communications markets. EETT's notification concerned low speed narrowband access to fixed telephone networks in Greece. With this 500th notification, the Commission now has a clearer picture of the state of competition in all Member States, in time for the review of the regulatory framework.

"The first round of market reviews has been an important step in boosting competition and consumer benefits in electronic communications markets,” said Viviane Reding, EU Commissioner for Information Society and Media. "We can see a common approach to regulation emerging in Europe’s internal market which is increasingly built on close cooperation between the Commission and national regulators.”

Today, nearly all Member States have reviewed and notified to the Commission all of their telecom markets. Despite being a resource intensive process for all parties concerned, there has been a development of a common understanding of the application of competition law principles with the Commission playing a pivotal role. This is producing effective results to the benefit of the consumer.

The notification by the Hellenic Telecommunications & Post Commission (EETT) of 19 September concerning the Greek market for public fixed telephone network access for residential and for non-residential customers, was the 500th notification received by the Commission.The Greek regulator found that the incumbent operator, OTE, has nearly 100% market share of the low speed narrowband access market. This dominance could lead OTE to charge excessive prices or prevent alternative operators from accessing the network under appropriate conditions. EETT therefore proposes to impose on OTE a full set of obligations, including wholesale line rental and price control. In its letter dated 19 October, the Commission did not raise any objections with regard to the findings of EETT.

In the retail access markets, so far 22 national regulators[1] found the incumbent to be dominant and imposed the appropriate obligations, following the Commission's assessment of their notification.

Some Member States have already started the second round of reviews. These will reveal whether first round regulatory remedies imposed - or withdrawn in competitive markets - have had the desired effect and which have been the best regulatory practices.

With the insight from the Community consultation mechanism under the EU telecom rules over the past three years, the Commission now sees the need to improve consistency in how to tackle market failures. National regulators have been consistent on the markets in which they have imposed remedies but not necessarily in the type of remedies. The Commission has therefore proposed to have more efficient tools at its disposal for ensuring consistency in the 2006 Review of the EU regulatory framework.

Background on the Greek case assessed on 19 October:

Retail access to fixed public telephone networks provides a connection to fixed public telephone networks for making and/or receiving telephone calls and related services (such as faxes and dial-up internet).

A wholesale line rental obligation on the incumbent operator enables alternative operators to offer retail access services together with calls services to customers in such a way that the customer only receives a single bill from the alternative operator. The alternative operator resells to the customer the access line that it rents wholesale from the incumbent. It provides a solid basis for alternative operators to continue to develop their own access to public telephone network services, and to compete with the dominant market player to the benefit of residential and business users. This has led to increased competition in calls.

The legal basis for the Commission's role in regulating the electronic communications markets in the EU is laid down in Article 7 of the EU Framework Directive for electronic communications (see MEMO/06/59). EU law requires national regulatory authorities to perform regular competition-law based analyses of their domestic telecom markets and to notify the results to the Commission. As it is extremely important that regulators complete their market analyses and impose appropriate remedies, the Commission launched infringement proceedings against those Member States that have not completed their analyses (see IP/06/1358).

Over the past three years, the Commission and the regulators have worked closely together to take account of national circumstances and specific market characteristics. In the vast majority of cases the Commission has agreed with draft measures, whilst proposing ways of improving them to create a consistent and transparent approach to EU regulation.

To keep pace with technological and market developments, the Commission is currently revising the markets which are susceptible to regulation[2]. The public consultation ends on 27 October 2006. The Commission intends to propose legislative measures to Parliament and Council early in 2007.

The text of the Commission's response is available at: http://ec.europa.eu/information_society/policy/ecomm/article_7/commission_decisions/index_en.htm
The annex to this press release illustrates the status of notifications under Article 7:

All notifications and Commission responses can be found at:

http://circa.europa.eu/Public/irc/infso/ecctf/library
Further information on the EU regulatory framework for electronic communications and the “Review 2006” can be found at:

http://ec.europa.eu/information_society/policy/ecomm/index_en.htm


Figures and graphics available in PDF and WORD PROCESSED


[1] The following Member States still having to notify their retail access markets: Estonia, Luxembourg Latvia

[2] Commission Recommendation 2003/311/EC of 11 February 2003, OJ L 114, 8.05.2003.


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