Friday, 30 April 2010

EETT angry on OTE's upgrade of speeds and launch of retail ADSL product

EETT has released an announcement (in greek) concerning the upgrade of speed of OTE's network (see an older post of the author) warning the latter that it is against the national telecommunications legal regime the setting of retail prices prior to a decision of EETT on the subject. OTE did upgrade its network speeds and further launched its retail adsl products without the consent of the NRA. The issue is that the current situation is disturbing since consumers do want better quality and price on their product. On the other hand, the NRA should guarantee effective competition in the market.

To my view, the current incident stems from EETT's inappropriate in the current economic climate regulatory policy. The european framework (to be exact the European Commission) suggests the imposition of regulation in the wholesale level and only if that is not sufficient to move to regulation in the retail level. The market did dictate some years ago regulation on both levels since the competitive restraints that the alternative operators exercised were minimal. However, the past two years the adsl market has seen some competitive forces been established against OTE's dominance. The reasonable thing to do would be to gradually deregulate the retail level and maintain only wholesale regulation. That did not happen and here we come nowadays to the paradox of freezing innovation and benefits to consumers.

If the EETT believes and fears that OTE engages or will engage into margin squeeze then it should attempt to set its wholesale prices to a lower level and leave the retail level clear from any price regulation. The market has as aforesaid some competitive forces to sustain such an approach. The NRA in fact, did impose a fine to OTE for margin squeeze two years ago but it did this following its competence as a Competition Authority and thus ex post. This is again another paradox. How is it possible to regulate both levels and then scrutinise the market under competition law? It is obvious that if you regulat ex post there is something wrong with the ex ante regulation...You would rather invoke competition law when you deregulate gradually the ex ante regime and still some dominance and market distortion exists...

It is hereby suggested, that EETT should change direction in its regulatory policy. It should regulate strictly the wholesale level and only if that does not work proceed to the retail level. The greek market has reached a point where no alternative operator has an incentive to invest in infracture and compete agressively in the retail level (giving merits to the school of thought that condemns services-based competition and claims that only infrastructure-based competition brings benefits to consumers). Unfortunately, alternative operators simply rely on the regime and have stopped trying being even more efficient and competitive. If we want better networks and better prices in the long term, EETT should try to stimulate competition at least in the retail level. The only thing it does today is forcing the dominant player to be less efficient and competitive against the other players...

Thursday, 22 April 2010

Second football decoding case referred to the CJEU. A way to circumvent the CJEU's order?

After Football Association Premier League et al (FAPL) was referred to the CJEU, a second case pending before the English courts was referred. It is interesting to note that the CJEU gave out an order whereby it denied UEFA and other four entities the right to submit their observations owing to their not beeing parties to the domestic case. In the second case, the defendant stressed the fact that a similar case was referred to the CJEU but the High Court persisted in referring the present one, permitting in that way the participation of UEFA as a party to the proccedings of the second referral (source: out-law.com, pinsent masons).

Greek competition "watchdog" investigates Cosmote's practices

The Greek NCA might be close to launch a case against Cosmote on grounds of RPM and price squeeze. Franchisees of Germanos (electric products wholesaler) claim that the latter sets minimum selling prices while Cosmote (which owns Germanos and a mobile operator) operates a second wholesale line with cheaper prices (source: kathimerini, in greek).

Licensing of digital operators in Greece

The Greek Government speeds up the procedure to reform the licensing regime regarding digital tv operators while abandoning the idea to license properly analogic tv operators (source: imerisia, in greek).

Thursday, 15 April 2010

Unblocking VoIP

Orange in France had decided to unblock VoIP operators [source: PC Inpact (in french)]. This is a move of huge significance for these kind of operators and consumers as well. Traditional telecom operators' policy to block such kind of services could be considered conroversial although it seems for the time being it does not violate any provisions of the European framework (competition rules though?). It shall be mentioned lastly that Commissioner Kroes is likely to opt for regulating net neutrality and a public consultation will be launched in due time.

I will come back to this issue in more detail...

Digital agenda

PC inpact leaked a draft of the digital agenda to be presented by Commissioner Kroes. Interoperability at the hart of it (source: euractiv).

Awaiting upgrade of speed by OTE and the FTTH plan to change

OTE is awating EETT's decision after the public consultation (in greek) held concerning the upgrade in terms of speed of the OTEs newtrok. At the same time, an Hellascom, has delivered an FTTH rural project jointly with Link SA (in greek). It may be OTE's statement of rediness to proceed to a NGN development. On the other hand, the relevant ministry has just published the tender (in greek) for the selection of a techno-economic advisor for the national FTTH project altering to a certain extent the parameters given and binging it more in line with the Greek incumbent's vision, some suggesting (source: kathimerini) owing to the significant costs foreseen to be incurred. It need to be reminded that the project should be cleared by the Commission (state aid rules). It is nevertheless worth mentioning that Commission Kroes has reinstated PPPs importance in a recent speech of hers.

EETT communicates market definiton, SMP assessment and regulatory obligations proposed regarding markets 2, 3 and the old 10 to the Commission

EETT, the Greek NRA, communicated to the European Commission, the market definiton, the SMP assessment and the respective regulatory obligations proposed on markets 2, 3 and the old 10 (in greek). Two interesting points deriving from the text is that 1) EETT decides to define, assess and regulate the old 10 market and it will be interesting to see how the Commission will react in view of the revised framework directive and 2) EETT ackownledges that the "homezone" products offered from mobile operators exercise competitive constraints, although not yet significant ones. The latter shows the Greek NRA's tendency to adopt a more modern approach when it comes to market definition in line with competition law principles as the framework dictates and sets probably a precedent for the market definitons yet to come. This modern approach may contradict the decision to opt for the regulation of the old market 10 (transit services) but at the same time may indicate that the NRA feels confident enough to derrogate from the Commissions' line.

Wednesday, 14 April 2010

Digital dividend and harmful interference

As the discussion on the digital dividend proceeds, it is difficult to see how a pan-European approach will be reached. Pressure groups attempt to influence on one or the other direction and there are plenty of arguments for both sides [telecom operators*1 and broadcasting operators (source: euractiv)]. The issue constitutes a hot topic for Greece as well, as was shown from the comments made from stake holders during the discussion before a parliamentary committee regarding the digital transition. It remains to be seen how this public good will be distributed...

*1: it is not hereby insinuated that the European Commission guards telecoms operators' interests but that it is convinced from their arguments to a larger extent than from those broadcasting operators have presented (and probably rightly so, i would add).