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Telecoms “relevant markets” expert advice received by Commission – suggests fewer markets should be regulated.

European Commission - MEMO/13/875   10/10/2013

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European Commission

MEMO

Brussels, 10 October 2013

Telecoms “relevant markets” expert advice received by Commission – suggests fewer markets should be regulated.

The European Commission has published advice received from external experts concerning which parts of telecoms markets could be regulated ex-ante by national telecoms regulators to address structural competition problems. The study advises that fewer markets should be included on the Commission's list than under current EU rules, and also finds that no new markets should be added.

This advice will feed into the Commission's review of the 2007 Recommendation (see IP/07/1678) which defines the wholesale and retail telecoms markets which are likely to require regulation of a dominant operator by National Regulatory Authorities (NRAs).

Vice President Neelie Kroes said: "The findings of the study will help us to update the list of the relevant markets, which will shape the scope of national regulatory interventions in the coming years."

The study, carried out by Ecorys Netherlands says:

  • The retail market for access to fixed telephony (market 1 in the 2007 Recommendation) and the wholesale market for call origination on the fixed public telephone network (market 2) do not meet the three criteria test and should be removed from the list in a revised Recommendation.

  • Fixed and mobile termination markets (markets 3 and 7) should be maintained on the on the list.

  • The boundaries of the local loop unbundling market (market 4) should be refined and clarified.

  • Two separate wholesale markets for bitstream access (currently market 5) should be defined to better respond to the different needs observed at the retail level of mass and business market.

  • The report suggests that it should be up to individual NRAs to consider whether the wholesale business bitstream market should form a single market with the terminating segments of leased lines (market 6 in the 2007 Recommendation).

Background

Decisions on relevant telecoms markets are subject to the Commission's Article 7 consultation procedure under EU telecoms rules. Having a list of relevant markets helps NRAs to determine in a coordinated manner whether or not to regulate their markets. The Commission will present an updated Recommendation on Relevant Markets in 2014.

The Recommendation identifies the markets which are in principle susceptible to ex ante regulation on the grounds of a "three criteria test".

Presence of high and non-transitory structural, legal or regulatory barriers to entry;

Market structure does not tend towards effective competition within the relevant time horizon, having regard to the state of competition behind the barriers to entry;

Competition law alone is insufficient to adequately address market failure(s) concerned.

National Regulatory Authorities have to regularly review national markets and notify them to the Commission under the "Article 7 procedure". This is a consultation and notification mechanism that requires national telecoms regulators to inform the Commission and telecoms regulators in other EU countries in advance about measures they plan to introduce to solve market problems. Since 2003, the Commission has reviewed almost 1500 such notifications.

The first Recommendation on relevant markets was adopted in 2003. The Commission identified eighteen telecoms markets susceptible for ex ante regulation. The current Recommendation was adopted in 2007. There are seven markets on the list that are recommended for the national regulatory authorities to analyse.

This is the second review of the Commission's Recommendation on relevant markets and it takes place in accordance with Article 15 of the Framework Directive, according to which the Commission shall adopt a Recommendation on relevant product and service markets and assure its regular revision.

A public consultation on the revision of the Recommendation took place between 16 October 2012 and 8 January 2013 (see IP/12/1105). The Commission will, as a next step, present revised the list of market recommended for ex ante regulation to Body of European Regulators for Electronic Communications (BEREC) to seek its opinion. The Recommendation will be accompanied by an Explanatory note.

Useful Links

The report prepared by Ecorys will be published at:

https://ec.europa.eu/digital-agenda/news-redirect/12285

About EU telecoms rules


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