Brussels, 8 th December 2009
Telecoms: Commission endorses amended version of Austrian broadband access market definition
The European Commission has given its green light to the amended definition of the wholesale broadband access market (WBA) notified by the Austrian regulator RTR (Rundfunk und Telekom Regulierungs GmbH). On 5 October 2009, the Commission had expressed serious doubts about the market definition as originally notified by RTR on 3 September 2009 (see ). RTR has now provided sufficient evidence that mobile broadband connections are substitutes to fixed line broadband connections for Austrian residential customers. RTR has also modified its wholesale market definition and now excludes all bitstream access for residential customers from regulation. Nevertheless, the Commission invites RTR to closely monitor market developments and to change the market definition if its forecasts on the continued substitutability of fixed and mobile broadband products and next generation access network (NGA) roll-out prove to be incorrect.
Competition Commissioner Neelie Kroes said: "I welcome the efforts made by RTR to address the Commission's initial serious doubts. RTR has now sufficiently demonstrated the particular situation in Austria, where residential users can easily switch between a DSL, cable and mobile connection to access the internet. "
" I welcome that RTR has adjusted its market definition at wholesale level to reflect the different market dynamics which can be observed in Austria in the residential retail market on the one hand, and the business retail market on the other. Indeed, this is a situation which is unique across Europe, where normally such advanced offerings of mobile broadband services to residential users cannot be observed", said Viviane Reding, the EU Telecoms Commissioner.
On 5 October, the Commission informed RTR about its serious doubts regarding the draft WBA market definition in Austria (see ). The Commission considered that RTR did not provide sufficient evidence that fixed (provided over DSL lines or TV cables) and mobile connections are substitutes on the retail residential market. The Commission also highlighted the lack of a sufficiently detailed forward-looking analysis of the market at the wholesale level, and that an incorrect definition of the wholesale market might have led to insufficient or excessive regulation.
On 27 November, RTR submitted additional evidence to justify its conclusion that, despite differences in terms of product characteristics, fixed connections and mobile connections are indeed considered substitutable products by Austrian residential customers. The amended wholesale market definition now includes bitstream access for the use of business customers, whereas wholesale bitstream access for residential customers is excluded in order to avoid excessive regulation, as the residential market is already competitive.
The Commission concluded that, although fixed and mobile retail broadband services are normally not belonging to the same market, the current situation on the Austrian market led to a temporary substitutability of the two.
The Commission highlights, however, that mobile operators may in the future face increased network congestion and mobile broadband offers may also not be able to compete with offers provided via high speed NGA networks as regards bandwidth capacity. Therefore, the Commission invited RTR to closely monitor future market developments, with regard to the impact that the potential roll out of an NGA network could have on the current market definition and to constraints of further mobile take up in comparison to the evolution of fixed broadband. The Commission also called on RTR to monitor fibre roll out in Austria in order to review the market as soon as the incumbent plans the launch of a commercial product based on this technology.
To avoid distortions of competition, WBA is currently regulated in almost all EU Member States by the national telecoms regulators (NRAs). Where an NRA determines that a relevant market is not effectively competitive, it shall identify operators with significant market power and impose appropriate regulatory obligations (see ).
NRAs are required to notify their regulatory proposals to the Commission and other national regulators under the so-called consultation procedure. The Commission may make comments on notified draft measures and, after an in-depth investigation, require a regulator to withdraw a proposed measure due to lack of compatibility with EU law.
More information on the Article 7 procedure can be found at: