Brussels, 3 July 2013
Telecoms: Commission blocks Austrian proposals to regulate wholesale leased lines
The European Commission has asked the Austrian Regulator (TKK) to withdraw its proposal to regulate the wholesale market for terminating segments of leased lines which are commonly used by businesses to connect geographically distant offices. TKK has proposed to reintroduce regulation of these dedicated capacity lines in densely populated areas (e.g. Vienna, Linz, Graz, Salzburg, Innsbruck, Wels, Feldkirch, Steyr, Klagenfurt, Dornbirn, Bregenz and Hallein) and to regulate access to very high bandwidths in all parts of Austria. The Commission first expressed serious doubts about TKK's proposal in May 2013 (see).
The Commission concludes that the evidence available does not sufficiently justify a change of situation compared to the previous market definition. In Commission's view, TKK has not provided enough evidence in support of regulation in all bandwidths at national level and has not taken account of the different competitive conditions existing in this market in Austria. The Commission considers that over-regulating bandwidths and areas where competition exists distorts competition and is not compatible with EU law. The Body of European Telecom Regulators (BEREC) agrees and considers that the decision of the Commission is justified.
European Commission Vice President Neelie Kroes said: "Based on the evidence submitted, the Commission believes part of the Austrian market in question is competitive, and that competition is delivering benefits, so reintroduction of regulation for all bandwidths and areas is not justified in this case.”
After two months of investigation the Commission has concluded that competitive conditions are heterogeneous in this market. TKK's data shows that there is sustained competition, at least in major municipalities in the high bandwidth segment of this market where alternative operators are present and where the incumbent (A1 Austria Telekom) has a market share of less than 15%. Also, although recognising the growing demand for higher-bandwidth leased lines in Austria, the Commission considers that demand is not sufficient to justify regulating the market, especially when TKK has not adequately demonstrated a persistent lack of competition.
During the investigation, TKK has failed to provide additional evidence allowing the Commission to withdraw its serious doubts (see). BEREC has also recommended that TKK provides a reliable evidential basis demonstrating that this market is characterized by uniform competition conditions across bandwidths and therefore supporting regulation in the whole territory of Austria and reconsider its decision as appropriate.
"Article 7" of the Telecoms Framework Directive requires national telecoms regulators to notify the Commission, BEREC (the Body of European Regulators for Electronic Communications) and telecoms regulators in other EU countries, of measures that they plan to introduce to address the lack of effective competition in the markets in question.
The new rules enable the Commission to adopt further harmonisation measures in the form of recommendations or (binding) decisions if divergences in the regulatory approaches of national regulators, including remedies, persist across the EU in the longer term.
The Commission's letter sent to the Austrian regulator will be published at:
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