Thursday, 30 September 2010

EETT's new market analsysis on markets 2 and 3

EETT has concluded its market analysis on markets 2 and 3 (in greek). The NRA retained the same obligations as imposed under the first market analysis and considered that the transit market even though not included in the new Recommendation on Relevant Markets should be regulated ex ante.

Monday, 27 September 2010

Non Communication of measures transposing the GSM Directive

DG INFSO provides a list of the Member States which failed to communicate their measures to traspose the amended GSM Directive and were therefore sent a Letter of Formal Notice.

DG Comp closes investigation against Apple

The Commission decided to close its investigation (see press release) against Apple's practices, firstly to oblige consumers who bought iphone to enjoy repairing services only in the Member State where they bought their iphone and secondly to set restrictions to independent developers of iphone apps. In view of Apple abandonning such practices DG Comp closed the investgation.

Friday, 24 September 2010

The net neutrality issue viewed under the scenario of strong competition in the market

According to Euractive, Commissioner Kroes is said to state on the net neutrality issue: Strong competition in broadband markets may allow a more relaxed regulatory approach to net neutrality issues.

There is a problem with this statement (if it is indeed used) first of all, when looking at the terminology used. What exactly comprises "broadband markets"? Is there a solid distinction between light (it could be use of soft law, self-regulation or common practice) and regular regulation?

Of course, Mrs Kroes bases herself on the declaration on net neutrality in the telecoms package. It is, however, quite early to express on the issue and explicitly suggest there is a specific solution.

This statement would be better attributed to a Commissioner of Competition, and it would rather play a "copy & paste" function in his speeches. For a Commissioner of the Digital Agenda, using such a phrase for such a complicated subject it is naive to say the least.

The core of the subject lies on the words used by incumbents, saying that they do not want their networks to play a secondary role in the new digital environment. If they can't charge something extra on companies using their networks for delivering serices requiring significant capacity, then what's the point in investing in NGNs? They may simply stick to the current infrastructure and wait for the internet services companies to solve the problem. The motive for these operators to abandon net neutrality is thus extravagant.

On the other hand, competition law is not adequate in its current standing to deal with the issue and a further development is needed to establish new concepts that will deal with this potential problem.

Lastly in the scenario, where there is indeed strong competition (if and when this will ever happen), it is not likely at all that operators will be deterred from using such a blocking practice (i presume here that when Mrs Kroes talks about broadband markets refers more likely to broadband infrastructure. Assuming that she implies another market does not make much sense). If there is a motive for all to do it, and the costs of adhering to net neutrality more than significant, a strong competitive market does not guarantee preservation of net neutrality.

In any case, a Commissioner competent to regulate a sector, will simply do it when it is necessary. He/She will deregulate when the problem wil be possible to be solved by the market forces alone. Expressing a view a priori on such subject by a person in that position, entails various dangers for obvious reasons. In other words i, personally, can deliver my view on the subject and can be quite absolute on that...Commissioner Kroes cannot (even if she watches her back by mentioning "light regulation").

Note: the abovementioned stand to the extent that Mrs Kroes is indeed to be making such a statement in ETNO's conference. In any other case, i apologise and retract anything said against her.

Wednesday, 22 September 2010

Conference on vertical separation in telecoms

A very interesting conference is to take place in Brussels on vertical separation in the telecoms sector. The interest on the issue esacalates in view of the forthcoming implementation of the amended Framework Directive.

Tuesday, 21 September 2010

NGA Recommendation and Commission's broadband strategy

The Commission has given out the NGA Recommendation as approved under the parliamentary scrutiny procedure. The NGA Recommendation comes after two years trying to reach a consesus between all parties involved and is the cornerstone of the Commission's Broadband Strategy (see press release). Kroes has instigated the process for a Decision to be adopted so that wireless broadband is ensured the major part of the digital dividend (see press release) and furthermore gave out a Communication so that member states come with a national broadband plan, promoting investement etc (see press release).

As far as the proposed digital dividend Decision is concerned it could be mentioned that a consesus will not be easy at all since the subject is in the boundaries of EU competence.

OTE's VDSL project

EETT, following the major trend in Europe, notes that VDSL will be regulated as well. This of course comes as no surprise and i am curious to see how OTE will deal with the matter (see imerisia's article in greek). OTE can maneuvre within the boundaries of the NGA Recommendation and if something more is sought, it could be delivered only in a European level.

Moving from ex ante to ex post regulation in Greece

The President of EETT in its presentation (in greek) of EETT's annual report seems to insinuate that EETT will start considering moving from ex ante to ex post regulation as regards competitive markets. This may seem as a given for many but it should be one of the few times that it is officially reported by an EETT representative and to my view certainly denotes to some degree a change in EETT's thinking.

Maybe it is time to engage in a proper geographic analysis of some of the markets as well...

Renewal of 2nd generation mobile licenses

In view of the expiry of the 2nd generation mobile licenses in Greece in 2012. EETT and the Ministry of Infrastructure are about to start designing the procedure for the renewal of these licenses. EETT in its annual report (in greek) suggests that will consider amending the licenses' terms to facilitate the use of other technologies beyond GSM.

Article 7 Communication to BNetzA

The Commission criticises the German regulator for opting for ex post price control in the wholesale broadband access market and suggests that only ex ante price control is appropriate for that market in order to put into the balance by means of a cost orientation anaylsis all the relevant factors (investment risk etc). The Commission proposes also that an appropriate time period (for example that of six months)should be set between the incumbent's Wholesale Bitstream Offer and the launch of any retail services on its next generation network in order for its competitors to be able to adjust.

Tuesday, 7 September 2010

Article 7 Communication to EETT

The Commission advises EETT to use the Reasonably Efficient Competitor test as more appropriate when assessing margin squeeze practices since alternative network operators might enjoy different economies of scale or scope and different unit network costs. Furthermore, the Commission urges EETT to review the market of access to the telphone network and the retail access market.

It is interesting to note that the abovementioned Communication comes after AG Mazak gave the opinion in the Teliasonera case and where he suggested that in ex post regulation the As Efficient Competitor Test is more suitable than the Reasonably Efficient one. See the Comments made on that case hereinunder.

Article 7 Comments to Slovakian NRA

The Commission stresses that the Slovakian NRA should proceed to lowering the rates of call termination at fixed location in the near future, as being one of the highest in the EU. The Commission to that end mentions that "NRAs should ensure that termination rates are effectively implemented at a cost efficient, symmetric level by 31 December 2012; hence the recommended FL-LRIC cost model should be fully implemented by that date".

Thursday, 2 September 2010

AG Mázak delivers opinion in Teliasonera

The AG delivered today the opinion in the Teliasonera case. The AG's arguments will be most probably discussed intensively amongst competition lawyers and academics as they are quite ambiguous, at least to my perception.

Some remarks and personal thoughts of mine are:

1) the AG adopts the as effcient competitor criterion which to my personal view could be inappropriate in the telecoms sector when having to deal with an incumbent and where the market has been recently been liberalised (see paras 34-37).

2) the AG equates the margin sqeeze practice with that of refusal to deal. Personally i perceive refusal to deal working as an "umbrella" to other anti-competitive practices like margin squeeze, the latter enjoying some specificities.

3) the AG reiterates several times the findings of the Orcar Bronner case which perhaps are not suitable when dealing with alleged margin squeeze cases. After stating that the indispensability of the product/service is a basic criterion for having a solid margin sqeeze case, does not even consider that margin sqeeze, has to my view, as its basis the element of discrimination.

4) I still cannot understand the tendency of the EU judges and AGs not to refer at all to the essential facilities doctine...

5) The AG is of the opinon that there should be the critierion of recuperation of losses in predatory pricing cases, but not in margin squeeze cases. Although my view is that there should be not at all this criterion (merely an indication) even in predatory pricing cases, the AG's approach is inconstent. It either neglects to consider that margin squeeze could be combined with a predatory pricing practice, or perceives predatory pricing when combined with margin squeeze as a separate type of practice from mere predatory pricing (perhaps conceives the idea that in the latter case the margin sqeeze abuse "absorbs" the predatory pricing strategy).

6) Lastly, the distinction between a market where the dominant undertaking is imposed with regulatory obligations and a market with no regulatory obligations is abstract to say the least for it to play such an important role in the analysis of a case. It could be, that there is actually one market even though for one "sub-market" there are regulatory obligations and for the other one there aren't. Also, it is broadly recognised that the relative market under ex-ante regulation could be different from that determined under the ex-post regulatory perspective.